As part of our consumer law update in June we made reference to
changes to the Fair Trading Act 1986 ("FTA") which are to come into
effect in March 2015.
The further change to the FTA will regulate what can be
described as "standard form consumer contracts" (which may in fact
also include business-business contracts relating to consumer
goods) to address concerns about consumer contracts, or specific
terms in consumer contracts, being unfair.
Standard form consumer contracts commonly relate to gym
memberships, day care centres, telecommunications, finance,
utilities, hire purchase, online apps and software, to name a few.
Special exclusions will apply for insurance contracts.
The draft guidelines
On 31 July 2014, the Commerce Commission (the "Commission")
published draft guidelines setting out its approach to enforcing
the new provisions of the FTA once they come into effect.
The draft guidelines contain useful examples of contracts and
contractual terms which may be considered unfair and set out what
the Commission is likely to take into account as part of its
determination of fairness, in the context of the specific statutory
The Commission has called for submissions on its approach by the
end of September. We would expect their final guidelines to be
issued before the end of the year.
The draft guidelines can be found in full by clicking
As mentioned in our previous update, we would suggest that
businesses begin to consider updating their standard form consumer
contracts, especially in the context of these draft guidelines and
as necessary take professional advice.