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More protection against unfair commercial practices?

December 17, 2018

Contacts

Partners Richard Watts
Special Counsel Sarah Chapman

Unfair contract terms Consumer law

The Ministry of Business, Innovation and Employment (MBIE) is calling for submissions to help decide whether additional protections for both consumers and businesses against unfair commercial practices are required.

While the Fair Trading Act 1986 and Commerce Act 1986 already provide protection against unfair commercial practices, MBIE is considering whether further protection is needed to fill gaps in legislation.

MBIE has released a discussion document that outlines options to:

  • introduce a prohibition against unconscionable, oppressive, or unfair conduct; and
  • extend existing protections against unfair contract terms in standard consumer contracts to also protect businesses.

The discussion paper has resulted from a MBIE survey where a number of small businesses reported that their supplier and business customer relationships were not fair and healthy and that they have experienced unfair conduct or contract terms.

Examples of alleged unfair practices include the following:

  • not being paid for several months, resulting in cashflow issues;
  • non-compliance with contract terms that places significant risk on smaller business; and
  • unilateral price increases for products and services under contract.

MBIE is already aware of practices that involve preying on vulnerable consumers in shopping malls and mental health units.
You can access the discussion document here.

The deadline for submissions is 9am on 25 February 2019.

Please contact us if you would like help in drafting submissions.

Contributors nicole.ashby@simpsongrierson.com, juliet.bing-harmon@simpsongrierson.com