What Happens If a Service Provider Changes the Price For Service Before the Contract Period Expires?
A Service Provider Is Unable to Increase the Price For Services Until the End of the Agreed Upon Period Unless a Customer Agreed to a 'Prices Subject to Change' Clause or Similar Provision.
A Helpful Guide For How to Determine and Understand When a Business May Lawfully Change the Pricing of Services
The right for a business to implement a pricing change must be agreed to within the original agreement or be changed after the original agreement expires. A business is without the right to change the price unilaterally and arbitrarily. These principles were stated within the case of Ramsey v. BCE Inc. operating as Bell Canada, SC-17-00008757 (unreported case of the Toronto Small Claims Court). In the Ramsey case, a price was agreed to during a telephone discussion with a customer service representative. The agreement lacked any terms suggesting that the pricing was subject to change at any time; and accordingly, subsequent attempts to change the pricing were deemed improper and unenforceable.
On November 30 2016, David Ramsey engaged in a telephone discussion with a representative of Bell Canada for the purpose of discussing a Internet and TV package known as Fibe 50. During the discussion, the representative advised that the package was available for one hundred twelve 90/00 ($112.90) dollars for a period of twenty-four (24) months. Subsequently, via changes of pricing issued upon invoices, Bell Canada attempted to alter the agreed upon arrangement.
Basing the case on trite law concepts, meaning principles that are so known and ingrained to legal practitioners that reference may be made without citing precedent cases, Deputy Judge De Lucia stated:
I find that Bell Canada cannot unilaterally insert or impose new terms. Any imposition of new terms without fresh consideration is unenforceable. I also find that that kind of contractual behaviour is high-handed, arbitrary and unacceptable. In particular, terms that speak to price increases, as I’ve stated, there is no fresh consideration for this price change mechanism and I find that to be unenforceable.
It is true that the court cannot interfere with Bell Canada’s rights to impose price changes. That is its commercial right to do so but not during a contractual term, and the term here was for 24 months at $112.90 per month for TV and internet services and therefore those terms are enforceable. To alter or to change the terms, as Bell has requested, would be grossly unfair, grossly prejudicial to the plaintiff and unconscionable.
Contracts are designed to bring stability to transactions, and in particular a consumer transaction as such as we have here. Bell’s attempt to unilaterally impose terms are unacceptable. I accept the plaintiff’s position that Bell Canada attempted to clarify or to introduce or to bring to the attention of the consumer new terms of the contract through subsequent emails. None of those terms were introduced or brought into the parameters of the transcript of November 30th, 2016. And accordingly, this is not how contract law works and the relevant, as I say, the relevant elements of the contract are found in the transcript of November 30th, 2016.
Accordingly, the case clearly was decided in favour of Mr. Ramsey. Strangely, and as will be unknown to all but Bell Canada and Mr. Ramsey, why this case was unresolved and needed is somewhat perplexing. With such a plain and obvious outcome on legal issues that would be well understood by legal counsel for a company such as Bell Canada, there was likely factors involved that occurred outside the courtroom and kept the matter from settling prior to Trial.
A business is unable to alter an agreed upon pricing arrangement until the end of the agreed term or unless it was agreed that pricing could be changed at a later date. A business, such as Bell Canada in the case of Ramsey v. BCE Inc., may offer service packages where the specific price changes from time-to-time; however, if a price was agreed to, and agreed to for a specific period of time, the price is locked in for that period regardless of whether the common price of that service changes.