Recent amendments to the Fair Trading Act will impact all businesses that provide standard contracts to consumers.  From 17 March 2015 those in trade are prohibited from including unfair contract terms in standard consumer contracts.  Once a term is declared “unfair”, any trader who tries to enforce or rely on that term could be liable to a fine on conviction.

The fines run up to $200,000 for an individual or $600,000 for a body corporate.

Many businesses currently use standard form consumer contracts (essentially a “one size fits all” contract), including retirement villages, gyms, and telephone companies.

The Commerce Commission is the only body that can apply to the Court for a declaration that a contract term is unfair.  In a statement released from the Commerce Commission, the Chairman of the Commission confirmed that the Commission’s intention is to set out guidelines for how they will enforce breaches of the Act.

Changes become law in March 2015, so businesses and consumers are being encouraged to participate in the development of the guidelines now and to sort out their standard contracts to ensure compliance with the Act.  Draft guidelines are available in the Fair Trading guidelines section of the Commerce Commission website.

Submissions should be sent to the Commerce Commission by 5pm 30 September 2014.