You would be forgiven for assuming the Consumer Law Reform Bill
had been parked until 2014, after its much drawn-out progress
through Parliament. However, yesterday the Bill (in the form of
five separate amendment Acts and one replacement Act) passed its
third reading. The Acts should receive Royal assent before the sun
sets on 2013, but many of the provisions of the Acts will not come
into force for six months and, in some cases, 15 months (see
The Acts had bipartisan support. Together they are intended to
update New Zealand's consumer law to include modern
transactions and to align our law more closely with Australia.
A table summarising the key changes under each of the Acts is
set out at the end of this article.
How long do you have to comply?
The Acts include a number of transitional provisions which give
you time to update your contracts and practices. The key provisions
that will come into force over the next 15 months are as
6 Months (June
15 months (March 2015)*
In six months* new provisions come into effect relating to:
contracting out of the Fair Trading Act 1986
unsolicited goods and services
uninvited direct sales
internet traders and shill bidding
delivery relating to guarantee
guarantee relating to electricity and gas
indemnification of gas and electricity retailers
In 15 months* a new prohibition relating to
"unfair contract terms" in "standard form consumer
contracts" comes into effect.
* Exact date not yet known as transitional period
will be calculated from the date of Royal assent.
Were there any last minute changes?
A number of Supplementary Order Papers (SOPs)
have been introduced since the Bill was considered at the Select
Committee stage, primarily in relation to insurance contracts.
These have been reviewed in previous updates
Two further and final SOPs (
SOP 404 and
SOP 405) were also introduced in the week preceding the final
reading of the Bill. These SOPs introduced technical amendments or
amendments which provided clarification on previous amendments and
did not introduce any substantive changes.
What do you need to do?
Some of the key issues which you will need to consider before
the transitional periods come to an end are:
Do your "standard form consumer contracts" include
any "unfair contract terms"?
This may also cover your business contracts if they relate to
goods or services which are also consumer goods or services, as the
definition of "consumer contracts" under the FTA is very
Should you now be adopting a practice of contracting out of the
FTA in your business to business contracts?
Have you updated your extended warranty agreements and
materials to comply with the new mandatory requirements for these
agreements? (These requirements also apply to applicable insurance
Have you updated your lay-by sales agreements and direct sales
agreements (and related practices) to comply with the new mandatory
requirements for these agreements?
Are you dealing in second-hand goods on a routine or
promotional/trade-in basis? If so, do you have the applicable
licences in place?
Do you have processes and guidelines to ensure you retain
supporting evidence that all representations that you make in trade
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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