Insights & Articles

The Fair Trading Amendment Act 2021 ("Amendment Act") has made recent amendments of the Fair Trading Act 1986 with some terms being extended to small business contracts that will come into force on 16 August 2022.

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.

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.

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.