PUBLICATIONS

Publications

Our lawyers keep up with the latest trends and issues in New Zealand law and business, and regularly publish articles and reports on current topics.

Email me when new articles are published

Fair Trading Amendment Bill - Enhanced protection for small businesses & consumers

Written by Darryl King, PARTNER; David Alizade, PARTNER; Claire Godber, SENIOR ASSOCIATE on February 18th, 2020.    

Share
Download
 
Legal UpdatePNG

    Fair Trading Amendment Bill 

February 2020
 
 
The Fair Trading Amendment Bill (Bill) was introduced in December 2019 and aims to amend the Fair Trading Act 1986 (Act) to provide more protection for small businesses and consumers against unfair commercial practices.

The three key changes under the Bill are:
 
1. introduces a new prohibition against unconscionable conduct in trade;
 
2.  extends the unfair contract terms provisions to small trade contracts (currently they only apply to consumer contracts); and
 
3.  stronger consumer rights to get rid of ‘door knockers’.
UNCONSCIONABLE CONDUCT IN TRADE
Unconscionable conduct is serious misconduct that goes far beyond being commercially necessary or appropriate. The Bill states that Courts can consider a number of factors, when assessing if conduct is unconscionable, including:
  • the relative bargaining power of the parties and whether the parties acted in good faith;
  • whether the affected person (or their representative) was reasonably able to protect their interests;
  • whether the affected person understood the documents provided by the trader;
  • whether the affected person was subjected to unfair pressure or tactics or unduly influenced by the trader;
  • any other circumstance it considers relevant.
If there is a contract between the trader and the affected person, the Court may also consider other factors, such as the terms and form of the contract, the conduct of the trader and the circumstances in which the contract was entered. 
 
UNFAIR CONTRACT TERMS IN TRADE CONTRACTS

The Act currently prohibits unfair contract terms in standard form consumer contracts. The Bill aims to extend this prohibition to apply to small trade contracts too.

Unfair contract terms are terms that would cause a significant imbalance in the parties’ rights and obligations, are not reasonably necessary to protect the legitimate interest of the dominant party, and would cause detriment to a party.

The Bill defines a contract as a small trade contract if:

1.   the parties are engaged in trade;
 
2.   it is not a consumer contract; and
 
3.  the trading relationship between the parties is less than $250,000 per year (for all contracts between them).

If a term in a standard form small trade contract is found to be unfair, then that term cannot be included, applied, enforced or relied on.

UNINVITED SALES PEOPLE

The Bill extends the rights of consumers to direct sales people to leave or not enter their homes. These directions can be given verbally, in writing, visually, or can be a general standing direction (e.g. “Do Not Knock” signs).

WHAT DO THE CHANGES MEAN FOR YOU?

Businesses need to review their conduct, especially with small businesses. If the Bill is passed, the current penalties in the Act will apply, which means businesses could face fines of up to $600,000 if they breach these provisions.

If you have any concerns on the Bill, you have until midnight on Friday, 27 March 2020 to make a submission.  For more information on the Bill or the Act in general, please contact one of the Jackson Russell Lawyers listed. 

Current progress of the bill - FTA

Disclaimer: 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 2020

 

Key Contacts

Darryl King Publications
Darryl King,
PARTNER


David Alizade 167

David Alizade,
PARTNER



Claire FINAL
Claire Godber,
SENIOR ASSOCIATE
 
 

CONTACT US

Level 13, The AIG Building, 41 Shortland Street,
Auckland 1010, New Zealand

PO Box 3451, Auckland 1140
New Zealand

Telephone
+64 9 303 3849

Fax
+64 9 309 0902

Email
enquiry@jacksonrussell.co.nz