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Commerce Commission Review of Unfair Contract Terms in Consumer Contracts – Energy Retail

Written by Darryl King, PARTNER on September 21st, 2016.    

September 2016 – Last month the Commerce Commission released a report on unfair contract terms in the energy retail sector.  The full report, available here, contains the second Commerce Commission industry review of unfair contract term (UCT) provisions and follows the telecommunications review released earlier this year.  The UCT provisions were introduced in March 2015 as an amendment to the Fair Trading Act and have a wide reach as they apply to every standard form contract between a business and a New Zealand consumer. 
The Commission's findings

The Commission identified a wide range of potentially unfair terms in energy retail contracts, the most common being terms that:

  • limit or exclude liability of the company, including exclusion of liability for consequential loss;
  • allow the company to unilaterally vary the contract; or
  • automatically renewed fixed term contracts unless the customer opted out.

The Commission worked with the companies involved to amend the relevant contracts. 
Other industries expected to be reviewed for unfair contract terms include the credit sector and gyms.

How does this affect my business?

The Commission has set a high bar and determined that a number of market standard clauses are unfair.  If your business uses standard form consumer contracts, then we recommend that you review the terms in light of the Commission’s comments following the telco and energy retail reviews.  We are happy to help you with this.

The information contained in this publication is of a general nature and is not intended as legal advice.  It is important that you seek legal advice that is specific to your circumstances.
All rights reserved © Jackson Russell 2016

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