Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Consulting on guidelines about unfair contract terms

Commission consulting on guidelines about unfair contract terms

The Commerce Commission has today released draft guidelines on the new provisions of the Fair Trading Act dealing with unfair contract terms. The unfair contract terms provisions were part of recent amendments to New Zealand’s consumer law and will come into force on 17 March 2015.

"The guidelines set out the Commission’s intended approach to enforcing the new provisions. We are holding this consultation well in advance of March 2015, as we want to make sure businesses have plenty of time to run a ruler over their current consumer contracts and get ahead of any issues," said Commerce Commission Chairman Dr Mark Berry.

Unfair contract terms relate to clauses in standard form consumer contracts. The main hallmarks of these contracts are that the terms have been offered to the consumer on a ‘take it or leave it’ basis, and the contracts relate to goods and services that are usually for personal use.

“A wide number of businesses use standard form consumer contracts, including finance companies, retirement villages, gyms, telecommunications companies and utilities like electricity and gas. We welcome feedback from businesses on our draft guidelines. But as the new laws will also have an impact on consumers, we encourage feedback from them too,” said Dr Berry.

The Commission invites submissions from interested parties on the draft guidelines. Submissions should be sent touctconsult@comcom.govt.nz by 5pm on 30 September 2014.

The Commission expects to release the final guidelines by the end of November 2014.

The draft Unfair Contract Terms Guidelines can be viewed on the Commission’s website athttp://www.comcom.govt.nz/fair-trading/guidelines/ .

Background

Unfair contract terms will be prohibited in all standard form consumer contracts entered into after 17 March 2015, and also in those contracts (except insurance contracts) that are renewed or varied after that date.

The unfair contract terms provisions allow the Commission to seek a declaration from a court that a term in a standard form consumer contract is unfair. While only the Commission can apply for a declaration, any person may file a complaint with the Commission on any contract.

The court may declare a term unfair if it is satisfied that the term:

• would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and

• is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term; and

• would cause some detriment (whether financial or otherwise) to the other party if applied, enforced or relied on.


Some terms cannot be declared unfair. These are terms that:

• define the main subject matter of the contract;

• set the upfront price payable under the contract, to the extent that the terms are transparent; and/or

• are required or expressly permitted by any enactment.


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Superu Report: Land Regulation Drives Auckland House Prices

Land use regulation is responsible for up to 56 per cent of the cost of an average house in Auckland according to a new research report quantifying the impact of land use regulations, Finance Minister Steven Joyce says. More>>

ALSO:

Fletcher Whittled: Fletcher Dumps Adamson In Face Of Dissatisfaction

Fletcher Building has taken the unusual step of dumping its chief executive, Mark Adamson, as the company slashed its full-year earnings guidance and flagged an impairment against Australian assets. More>>

ALSO:

No More Dog Docking: New Animal Welfare Regulations Progressed

“These 46 regulations include stock transport, farm husbandry, companion and working animals, pigs, layer hens and the way animals are accounted for in research, testing and teaching.” More>>

ALSO:

Employment: Most Kiwifruit Contractors Breaking Law

A Labour Inspectorate operation targeting the kiwifruit industry in Bay of Plenty has found the majority of labour hire contractors are breaching their obligations as employers. More>>

ALSO:

'Work Experience': Welfare Group Opposes The Warehouse Workfare

“This programme is about exploiting unemployed youth, not teaching them skills. The government are subsidising the Warehouse in the name of reducing benefit dependency,” says Vanessa Cole, spokesperson for Auckland Action Against Poverty. More>>

ALSO:

Internet Taxes: Labour To Target $600M In Unpaid Taxes From Multinationals

The Labour Party would target multinationals operating in New Zealand to ensure they don't avoid paying tax if it wins power and is targeting $600 million over three years through a "diverted profits tax," says leader Andrew Little. More>>

ALSO: