Document on unfair business conduct, contract terms welcomed

10 December 2018

The New Zealand Food & Grocery Council welcomes the launch today of a discussion document outlining proposals to prohibit unfair business conduct and to protect businesses from unfair contract terms.

Chief Executive Katherine Rich says the launch of the paper by Commerce and Consumer Affairs Minister Kris Faafoi and Small Business Minister Stuart Nash is a pro-business move.

“There is a need to strengthen New Zealand’s business law dealing with unfair practices, and these proposals would go a long way to achieving that.

“There is no one-size-fits-all solution to reducing the harm caused by such practices. The best solution is a suite of complementary measures. If enacted, these proposals would strengthen New Zealand’s regime in that regard.

“They would also complement the Commerce Commission’s new powers to accept enforceable undertakings and to undertake competition studies, and could lead to reduced costs for businesses, especially for small businesses.

“Crucially, the proposed prohibitions should capture only particularly egregious conduct – most typical business behaviour should not be affected.”

Mrs Rich says many of the proposals are common place in other jurisdictions, including Australia and Europe.

“Some unfair commercial practices that would be illegal overseas currently go unpunished in New Zealand. Australian consumer law, for example, has included some form of prohibition on ‘unconscionable conduct’ since 1986, and their ‘Unfair Contract Terms’ regime was expanded in 2016 to protect small businesses.

“It’s worthwhile considering the Single Economic Market benefits for New Zealand having law that is more consistent with Australia's.”

The European Union also has a general prohibition on unfair commercial practices.

“We congratulate the Ministers for their leadership on these issues and the release of the discussion document.”

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