Submissions called for on unfair commercial practices discussion paper

On 3 December 2018 Commerce and Consumer Affairs Minister Kris Faafoi and Minister for Small Business Stuart Nash released a discussion paper outlining options to protect consumers and businesses from unfair commercial practices.  The Ministry of Business, Innovation and Employment (MBIE) is now seeking submissions on whether there is a need for additional protections for consumers and businesses from these practices.  If you are interested in making a submission on the discussion paper, please do not hesitate to contact Anna Ryan at Submissions close on 25 February 2019.

We provide a brief summary of what you need to know regarding the discussion paper below.

The Government’s aim is to build a more productive, sustainable and inclusive economy, but has acknowledged that this is unlikely to occur with unfair commercial practices being rampant throughout the marketplace.  Therefore, MBIE is considering whether there is a need for additional protections for businesses and consumers against ‘unfair’ commercial practices, which are broadly categorised in the discussion paper as:

  • Unfair contracts, including those that:
    • contain terms which shift risk from one party to another;
    • make it difficult for a party to terminate a contract; or
    • are otherwise very one-sided; and
  • Unfair conduct outside of the terms of a contract itself, including the use of pressure tactics, deceptive conduct, or relating to the way a contract is enforced.

A range of legal protections already serve to safeguard consumers in particular from unfair commercial practices (including the protections against harassment, coercion and misleading and deceptive conduct in the Fair Trading Act 1986). The question currently under consideration is whether these existing safeguards are sufficient. A recent survey by MBIE indicated that a significant proportion of businesses reported experiencing unfair conduct or contract terms.  Despite some businesses reporting that they were successfully able to protect themselves against the unfair practices that they experienced, there is concern nevertheless that the protections available to small businesses, in particular those without significant bargaining power, may be lacking. Consumer protections from businesses are also not being effectively addressed under existing consumer law.

At the same time, it must be remembered that the role of Government is not to protect consumers or businesses from every transaction that they may regret. Therefore, care needs to be taken to ensure that any measures to protect individual businesses do not over-reach and unduly restrict market competition or economic growth.

MBIE’s discussion paper aims to identify any gaps in New Zealand’s current protections by those who are affected by them.

A summary of the context of the paper can be found here. The paper itself is located here.

Business Law team

If you need any assistance with the sale or purchase of your business, do not hesitate to get in touch with the Business Law team at Lane Neave.

Gerard DaleClaire EvansGraeme CrombieEvelyn JonesAnna RyanJoelle Grace,  Peter OrpinEllen SewellMatt TolanCarlo WanKristina SutherlandJacob NuttWhitney MooreAlex StoneBen Cooper, Lisa Catto

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