Writing a fair late cancellation policy

6 min read · Updated 2026-10-18

General information, not legal advice. Laws and the regulators' rules change: check the sources below, and talk to your own adviser about your centre.

It is 3:40 pm and the text arrives: "Sorry, Mia is sick, can we skip today?" The tutor is booked, the room is set, and the receptionist now has to decide, again, whether to charge. Charge and the parent feels ambushed. Waive it and the tutor still has to be paid. A written late cancellation policy settles that argument before it starts, and a fair one keeps families on side while protecting your margin.

Why the law cares about your cancellation terms

Most centres enrol every family on the same terms, with no real room to negotiate. The ACCC calls that a standard form contract, and the law presumes a contract is one unless the business that wrote it proves otherwise. A term in a standard form contract with a consumer can be challenged as unfair.

The ACCC describes an unfair term as one that causes a significant imbalance in the parties' rights, is not reasonably necessary to protect the legitimate interests of the business, and would cause the other party harm if enforced. A court looks at the contract as a whole and at whether the term is transparent: plain language, clear and not hidden. Terms that penalise only one party for breaching or ending the contract are among the law's examples of terms that may be unfair.

Since 9 November 2023 it has been illegal to propose, use or rely on an unfair term in a standard form contract, and courts can impose penalties rather than only striking the term out. The ACCC says the maximum for a business is the greatest of $50 million, three times the benefit obtained, or 30 per cent of adjusted turnover during the breach period, and $2.5 million for an individual. The changes cover contracts made or renewed, and terms varied or added, on or after that date. A term a court finds unfair is void.

Set a fee that reflects real loss

The easiest fee to defend is one you can explain in a sentence. Work out what a late cancellation actually costs you: the tutor's pay for a session you cannot fill at short notice, and the slot you could otherwise have sold. A fee well above it, or a whole term's charges for one missed week, starts to look like a penalty.

• Keep the late fee below the lesson price, and charge the full lesson only very close to the start or for a no-show.
• Never charge more than the lesson would have cost.
• Write down how you arrived at the figure, so you can answer a parent, or a regulator, calmly.

Give a notice period families can meet

Most policies have three bands: free with enough notice, a late fee inside the notice period, and the full lesson inside a short final window or for a no-show. Children get sick overnight, so a long notice period with no exceptions catches honest families. State each band in hours, not "reasonable notice", so nobody argues about what counts.

Make it mutual

If a family pays when they cancel late, the centre should carry the cost when it cancels. When a tutor is sick or the centre closes, the family should pay nothing and be offered a makeup. That counter-balance is what the ACCC asks businesses to check for, and it is what parents expect. A policy that only ever runs one way is exactly the shape the law lists as possibly unfair.

Makeups, holds and free allowances

Most owners would rather the lesson was taught than collect the fee. Three tools make rebooking the easy choice:

• Makeups: offer a replacement lesson within a set window, and say how long the window is.
• Holding the fee: hold a late fee for a few days and waive it if the child attends a makeup.
• A free allowance: forgive a set number of late cancellations a year, so the occasional sick day costs nothing and the fee is kept for a pattern.

Show the figure before anyone agrees

Transparency is part of the legal test and most of the goodwill. Put the policy in your enrolment terms, on your website and in the enrolment confirmation, and point it out at sign-up. Then, at the moment a family cancels, show the dollar amount this particular cancellation will cost before they confirm. A fee nobody saw coming is the one that ends up in a complaint.

In XTutio a centre sets its own free notice, late fee, full-charge window, how long a fee is held and how many late cancellations a year are forgiven. When a parent cancels, they pick a reason and see the exact figure before they confirm, and that quote is recorded and can be used once. A held fee is waived automatically if the child attends a makeup in time. When the tutor or the centre cancels, the family pays nothing and is owed a makeup. Reception taking a phone call can record the cancellation under the family's rules and read out the same figure, and the public cancellation policy page is written from the same settings, so the page and the charge never disagree. The cancellations and late fees guide walks through it.

• ✓The fee is no more than a late cancellation really costs you, and never more than the lesson.
• ✓The free notice period and each band are stated in hours.
• ✓The centre's own cancellations cost the family nothing and come with a makeup.
• ✓The makeup window, any fee hold and any free allowance are written down.
• ✓The policy is in the enrolment terms, on the website and pointed out at sign-up.
• ✓Families see the exact figure before they confirm a cancellation.
• ✓Your lawyer or adviser has read the terms since 9 November 2023.

Changing an existing policy

Give families written notice before a new fee applies, and let a family who does not accept the change leave without penalty. The ACCC's own example of a term likely to be unfair is one that lets a business change the deal while the customer cannot walk away. Our article on cancellation policies families accept covers the conversation with parents, and reducing no-shows covers the reminders that mean you rarely need the fee at all. Everything else about how XTutio charges families is on family money and payroll.

Questions centres ask

Can a tutoring centre charge a late cancellation fee?

Yes, provided the term is fair and clear. A fee that reflects the real cost of a late cancellation, shown to families before they agree, is far easier to defend than one that charges more than the lesson or is buried in fine print.

What happens if my cancellation term is found to be unfair?

A court can declare it void, so you cannot rely on it. Since 9 November 2023 courts can also impose penalties for proposing, using or relying on an unfair term in a standard form consumer contract.

How much notice should families give to cancel for free?

There is no single legal number. Pick a period your families can realistically meet, state it in hours, and keep the full charge for very late cancellations and no-shows.

Should the centre pay when it cancels?

It should cost the family nothing and come with a makeup. A policy that penalises only the family is the kind of one-sided term the law lists as possibly unfair.

Sources

• Contracts, Australian Competition and Consumer Commission. Read 2026-10-18.
• Businesses urged to remove unfair contract terms ahead of law changes, Australian Competition and Consumer Commission. Read 2026-10-17.
• Competition and Consumer Act 2010, Federal Register of Legislation. Read 2026-10-17.