Firms should carefully consider whether a right to vary for this reason would strike a fair
balance between the legitimate interests of the firm and those of the consumer. We make
clear at paragraph 54 that we will not question the fairness of a variation term, which would
include the reason the firm relied on to make the variation, if it operates only in the
consumer’s favour.
(e) Statement that the terms may be varied for any other reason / an indication that the list
of reasons is non-exhaustive
52. In contracts of determinate duration, a statement that the terms may be varied ‘for any
other reason’ is generally less likely to be valid than variation terms which are limited to
specified reasons. This is because it would allow the firm to amend the terms for reasons
that do not strike a fair balance between the legitimate interests of the firm and the
consumer. For example, it would enable the firm to increase the price simply because it
wanted to increase profits. Such terms are likely to lack the required transparency as the
consumer will be unable to foresee how a firm might change the contract over the lifetime of
the contract or what the consequences of the change might be.
However, we recognise that, depending on the circumstances, terms entitling the firm to
vary for any reason may be justified in longer term contracts if, when the contract is made,
the firm reasonably considers that it cannot foresee all the circumstances that could justify
varying the term. In assessing the fairness of such a wide variation term all the
circumstances bearing on the fairness of the term would have to be considered, including
terms regarding notice, freedom to exit, practical barriers to termination and the information
provided to the consumer about the variation term. Firms should carefully consider whether
such a wide variation term strikes a fair balance between the legitimate interests of the firm
and the consumer. Firms should also consider how they can satisfy themselves that the
consumer has been treated fairly when making changes to contracts of determinate duration.
Contracts of indeterminate duration
53. Different considerations may apply to contracts of indeterminate duration particularly if
the variation term enables the firm to achieve no more than it could lawfully achieve if it
instead gave the consumer notice in accordance with the contract to terminate the contract
and offered to enter into a new contract. We recognise that the category of potentially valid
reasons may be wider for contracts of indeterminate duration where the firm is entitled to
terminate the contract for any reason on giving notice and that, depending on the
circumstances, the power to vary for ‘any reason’ is less likely to be unfair than a term in a
similar contract of determinate duration.
However, in assessing the fairness of such a wide variation term, the firm would need to
consider all the circumstances affecting the fairness of the term. These would include terms
regarding notice, freedom to exit, practical barriers to terminating the contract and the
information given to the consumer about the variation term. Firms should carefully consider
whether such a wide variation term strikes a fair balance between the legitimate interests of
the firm and the consumer. Firms should also consider how they can satisfy themselves that
the consumer has been treated fairly when making changes to contracts of indeterminate
duration.
Factor 6: Whether or not the term can operate in the consumer’s favour
54. Many of the reasons that firms rely on to change the terms in their favour may, depending
on the circumstances also justify changes in the consumer’s favour. The sixth factor relates
to: