The Federal Court has ruled in favour of the Australian Competition and Consumer Commission (ACCC) against Internet service provider, ByteCard (also known as NetSpeed Internet Communications) for unfair contract terms provisions.

ACCC brought the company to court, following a complaint from the Australian Communications Consumer Action Network (ACCAN), as it deemed that a number of the company's standard form consumer contract clauses are unfair and therefore void.

The Federal Court declared, by consent, that certain clauses of ByteCard's standard terms and conditions are unfair contract terms which enabled ByteCard to unilaterally vary the price under an existing contract without providing the customer with a right to terminate the contract.

In addition, it required the consumer to indemnify ByteCard in any circumstance, even where the contract has not been breached and the liability, loss or damage may have been caused by ByteCard's breach of the contract; and enabled ByteCard to unilaterally terminate the contract at any time with or without cause or reason.

ACCC chairman, Rod Sims, said the terms were considered unfair as they created a significant imbalance in the parties' rights and obligations; were not reasonably necessary to protect ByteCard's legitimate interests; and if applied or relied upon by ByteCard, would cause detriment to a customer.

"This is the first time the ACCC has commenced legal proceedings based exclusively on the new unfair contract terms provisions of the Australian Consumer Law. The declarations is a reminder for businesses to ensure potential unfair contract terms are removed or amended," he said.

ByteCard has also been ordered to pay a contribution to the ACCC's costs.

"This is a positive outcome for consumers and acts as a warning to businesses. The ACCC won't hesitate to take action against businesses who continue to include unfair terms in their standard form consumer contracts," Sims added.

ByteCard spokespeople could not immediately be reached for comment.