By Laura Littlewood and Katie Green
Overhaul of New Zealand's consumer law
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 details below).
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 follows:
|6 Months (June 2014)*||15 months (March 2015)*|
In six months* new provisions come into effect relating to:
|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 here and here.
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 broad.
- 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 contracts.)
- 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 are substantiated?
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.