The Commerce Commission has launched a series of videos and quick guides to help businesses avoid unfair contract terms in standard form consumer contracts.
The Fair Trading Act prohibits contract terms in standard form consumer contracts which create a significant imbalance in the rights and obligations between companies and consumers, cause detriment to consumers, and are not reasonably necessary to protect the legitimate interest of the business.
Commissioner Anna Rawlings says consumers enter into a number of contracts every day without necessarily realising it.
“Every time you hire a car, book a flight, join a gym, or get a mobile phone, that’s a legal contract. The unfair contract term provisions are designed to make sure that these one size fits all, take it or leave it agreements strike the right balance between the rights and obligations of companies and consumers.”
The guides provide tips to businesses on terms that may be unfair such as unilateral variation and cancellation clauses, subscriptions and automatic renewals, and clauses that specify where responsibility lies if things go wrong.
“These quick guides are targeted particularly at small businesses. They are designed to draw their attention to the unfair contract term provisions and their need to get legal advice to ensure their contracts are fair.”
The material has been adapted for New Zealand law by the Commerce Commission using material first developed by the United Kingdom’s Competition & Markets Authority (CMA) in relation to the UK’s unfair contract terms legislation. It is being made widely available to a range of government, legal, business, and consumer advocacy groups.
The videos and quick guides can be found here.