What are unfair contract terms?

General information from Lawmateanz

New Zealand's Fair Trading Act 1986 prohibits unfair terms in standard form consumer contracts and in standard form 'small trade' contracts, where the total value of the relationship is under $250,000.

A term may be unfair if it causes a significant imbalance in the parties' rights, isn't reasonably necessary to protect the business's legitimate interests, and would cause detriment if relied on. Examples can include one-sided rights to change prices or cancel.

Only a court can declare a term unfair, usually on application by the Commerce Commission. Once a term is declared unfair, it can't be enforced.

If you think a term is unfair, the Commerce Commission has guidance and accepts complaints, and Community Law Centres can help.

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