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Commerce Commission Review of Unfair Terms in Consumer Contracts - Telecommunications Sector

Written by Darryl King, PARTNER on March 14th, 2016.    

Last month the Commerce Commission released a report on unfair contract terms in the telecommunications sector. The full report, available here, contains the first Commerce Commission industry review of unfair contract term (UCT) provisions. 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 telecommunications 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; and
  • make the customer responsible for unauthorised charges on the customer’s account. 

The Commission worked with the companies involved to amend the relevant contracts.

The next industries it intends to target are the electricity retail, credit and gym sectors.
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 its telco review. We are happy to help you with this.

For further information on this subject please contact the business law team or your usual Jackson Russell adviser.

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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