Fair Trading Amendment Bill - key changes likely to be in effect next year

Friday 4 June 2021

Authors: Laura Littlewood, Richard Massey, Tania Goatley and Joyeeta Bhakta

​​​The Fair Trading Amendment Bill has now passed its second reading in Parliament. 

The Bill will amend the Fair Trading Act 1986 by expanding existing protections against unfair contract terms to include small business contracts, and introducing new measures against unconscionable conduct in trade in New Zealand.

This article provides a brief update on the proposed changes and timing.

Summa​​ry

The two key changes proposed by the ​Bill are:

  • extending the existing prohibition against unfair contract terms in standard form consumer contracts to include business-to-business contracts valued under NZ$250,000 per year, and

  • introducing a prohibition against unconscionable conduct in trade.​

These reforms mirror recent changes in Australian consumer law.

In addition, the Bill strengthens the ability of consumers to require uninvited direct sellers to leave or not enter their property. (For more information about the changes, see our earlier update here).

Tim​​ing

The Bill will now be considered by the Committee of the Whole House and th​en proceed to a Third Reading before it receives Royal Assent. The Bill provides for a transitional period of one year before the key changes come into effect.

Next ​​​steps

In advance of the proposed changes coming into effect, businesses will need to carefully review their standard form business-to-business contracts that may be used for transactions valued under NZ$250,000 per year for any “unfair" contract terms. However, at this stage, it is unlikely these changes will come into effect until the second half of 2022.

We will continue to monitor and provide updates on the proposed changes and expected timings for commencement.

For more information, see our previous updates on the Fair Trading Amendment Bill covering:

If you have any questions or require any other guidanc​e, please contact our consumer law team or your usual Bell Gully advis​or.


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For more information
  • Laura Littlewood

    Partner Auckland
  • Tania Goatley

    Partner Auckland
  • Richard Massey

    Senior Associate Auckland
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