Insights & Articles

Commercial & Consumer Law

Unfair Contract Terms

Unfair Contract Terms

Written by:
Andrew Knight
A recent decision in the High Court of New Zealand has provided the first instance of the Courts using the Fair Trading Act 1986 ("FTA") to declare specific terms in a standard form consumer contract unfair, and therefore unenforceable. The decision in Commerce Commission v Home Direct Limited1 was made pursuant to sections in the FTA which were introduced in 2013 and give the Commerce Commission power to apply to the District Court or High Court for a declaration that a term in a standard form consumer contract is unfair.
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Ministry of Business, Innovation and Employment Discussion Document - Better Protections for Contractors

Ministry of Business, Innovation and Employment Discussion Document - Better Protections for Contractors

Written by:
Craig Andrews
The Ministry of Business, Innovation and Employment (MBIE) has released a discussion document late last year, inviting public consultation on an important subject affecting a large sector of New Zealand's working public: self-employed 'independent contractors', and companies and people who engage the services of such independent contractors, not just in the course of business, but even in some cases individual consumers utilising those services, for example ordinary member of the public using a 'ride sharing' platform. The deadline for members of the public to provide their feedback to MBIE expires at 5.00 pm on 14 February 2020.
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Mainzeal: Reckless Trading

Mainzeal: Reckless Trading

Written by:
Andrew Knight
In Mainzeal1 the former directors were held liable for a breach of section 135 of the Act. Richard Yan, (who was the founder and main shareholder of Mainzeal's parent company, Richina Pacific) was ordered to pay compensation of $36M. Each of the other directors (Shipley, Tilby and Gomm) were held liable to contribute $6M each towards that $36M.
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Heavy Fines Given to Retailers for Misleading Consumers

Heavy Fines Given to Retailers for Misleading Consumers

Written by:
Andrew Knight
Recent decisions of the District Court highlight the need for businesses to adhere to the Fair Trading Act 1986 ("FTA") and not mislead their customers, particularly if their customers are 'consumers' under the Consumer Guarantees Act 1993 ("CGA"). Both decisions involved prosecutions by the Commerce Commission against high profile retailers and resulted in substantial fines being awarded against these retailers.
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Section 131: Duty of Directors to Act in Good Faith and in Best Interests of Company

Section 131: Duty of Directors to Act in Good Faith and in Best Interests of Company

Written by:
Andrew Knight
In accordance with Section 131 of the Companies Act 1993 ("Act"), directors have a duty to act in good faith and in what they genuinely believe to be the best interests of the company. While it may be expected that directors should always behave in such a manner, and not place their personal interests ahead of the company's, various judgments have explored the extent of this duty and provided more information about the considerations director should take account of when exercising their powers.
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''Best Endeavours'' or ''All Reasonable Endeavours''

''Best Endeavours'' or ''All Reasonable Endeavours''

Written by:
Andrew Knight
Often in commercial contracts, parties agree that they will use their "best endeavours", their "reasonable endeavours" or their "all reasonable endeavours" to perform certain actions or to achieve a certain outcome. But what do these terms mean in reality? While there are no set definitions and much is dependent on the particular circumstances, we are able to make some practical comments about the requirements of each of these terms so you have a clear idea of what you are agreeing to.
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Directors' Duties - What Directors Need to Know

Directors' Duties - What Directors Need to Know

Written by:
Andrew Knight
In New Zealand, there are few prohibitions on who can become a director of a company, and no real qualification requirements. This means that some people become directors without actually understanding what their role requires. This can result in a company not being managed and governed as required by the Companies Act 1993 ("Act"), which in turn can lead to a breach of duty, which can have very serious consequences, up to and including personal liability for company debts or even criminal sanctions in the worst of cases.
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Section 135 of the Companies Act - Reckless Trading:

Section 135 of the Companies Act - Reckless Trading:

Written by:
Andrew Knight
Non-Executive or Passive Directors and Directors' Duties: The Courts Take no Excuses for a "Hands Off" Approach
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Terms of Trade - An Essential Part of Your Business

Terms of Trade - An Essential Part of Your Business

Written by:
Andrew Knight
Companies that provide goods or services on standard terms (including credit terms) should be regularly having a legal health check of their terms and their practices for ensuring the terms they are using accurately reflect their business practices, meet all of their requirements and cover off their key risks – as well as ensuring they are appropriately brought to the attention of customers or clients so that they are valid, enforceable or binding.
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Contract and Commercial Law Act 2017

Contract and Commercial Law Act 2017

Written by:
James Turner
Passed on 1 March 2017, the Contract and Commercial Law Act 2017 ("CCLA") represents a step taken by our Parliament to consolidate and modernise New Zealand's law relating to contracts and sales. The CCLA will come into force on 1 September 2017.
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