You agreed to the original deal. Then the company changed the rules. A term letting them do that isn't automatically valid — it faces exactly the same fairness test as any other clause.
A variation clause is still just a term
A clause allowing a business to unilaterally change price, scope, or other conditions during the contract is itself subject to the Australian Consumer Law's unfair contract terms test — it isn't automatically exempt just because both parties agreed to allow future changes when they signed. If it causes a significant imbalance, isn't reasonably necessary to protect a legitimate interest, and would cause you detriment, it can be found unfair like any other clause.
What tips a variation clause toward "unfair"
- No specific reason required — a clause letting the business change terms "at its absolute discretion" for no stated reason is far more exposed than one tied to specific, legitimate circumstances
- No exit right — a fair variation clause typically lets you leave without penalty if you don't accept a material change; one that locks you in regardless is harder to defend
- Poor notice — a change communicated quietly, rather than clearly flagged, weakens the business's position further
- One-sided scope — the business can vary the deal, but you have no equivalent flexibility in return
Since November 2023, this carries real regulatory risk for the business
An unfair variation clause isn't just something a court might strike down in your individual case — since the November 2023 reforms, a business using this kind of clause in a standard form contract risks penalties up to $50 million or 30% of adjusted turnover, per unfair term. This gives you real leverage when raising the issue: you're not just asking for a favour, you're pointing at a genuine compliance risk for the business.
How to respond to a change you think is unfair
- Find the exact variation clause in your contract and read precisely what it allows.
- Check whether the specific change made falls within what the clause actually permits, or goes further.
- Assess whether the clause itself looks exposed under the unfair terms test — no stated reason, no exit right, poor notice.
- Raise the issue directly with the business in writing, referencing the Australian Consumer Law's unfair contract terms provisions specifically.
- If unresolved, your state or territory's fair trading body can advise on next steps, including a formal complaint.
What this means practically
- A variation clause doesn't get a free pass from the unfair terms test just because you agreed to allow future changes at signing.
- The strongest, most defensible variation clauses specify a real reason and give you a penalty-free exit if you don't accept a material change.
- Since November 2023, an unfair variation clause carries genuine regulatory risk for the business, not just a risk of losing an individual dispute.
- Citing the ACL's unfair contract terms provisions specifically, rather than complaining generally, tends to get a faster response.
Sources
- ACCC — Unfair contract terms, examples and legitimate interests test: accc.gov.au
Related Kibbo Tools
- Contract Amendment Checklist — verify what's actually changing and whether the process was fair before accepting it.
- Contract Red Flags Checklist — spot exposed variation clause language before you sign.