Unfair contract terms regime extended today
16 August 2022
Changes to the Fair Trading Act 1986 (the Act) come into force today, extending the unfair contract terms regime to standard form small trade contracts. The new provisions apply to standard form contracts between parties who are in trade, where the value of the trading relationship is less than the annual value threshold of $250,000 when the relationship first arises. We have prepared a quick guide to help you determine whether the provisions apply to your contracts, identify when a term is unfair, and understand what the consequences are.
Our previous legal update sets out our recommendations for the steps your business should be taking, and gives examples from Australia of the types of terms that could also raise issues in New Zealand under the new provisions.
Additional changes to the Act including the new prohibition on unconscionable conduct, as well as changes to uninvited direct sales, are now also in force. The Commerce Commission has today released some high level guidance on the changes.