Regulating Tech in 2020 Series | Unfair Contract Terms in B2B Contracts

Over the last few days, we’ve given you a run-down of some big items on the tech regulation agenda in Aotearoa this year, including:  

1. “Modernising” the Privacy Act

2. New Zealand’s ‘Consumer Data Right’?  

3. Preventing Violent Extremist Content Online  

4. Classifying Content on “Video On-Demand” Services  

5. Big Changes Ahead for Copyright Law  

6. Unfair Contract Terms in B2B Contracts  

In this final piece, we look at Unfair Contract Terms in B2B Contracts  

In December 2019, the Fair Trading Amendment Bill was introduced to Parliament with two main goals. The first was to introduce a ban on all unconscionable conduct in trade. The second is to extend the existing protections against unfair contract terms (UCTs) in standard form consumer contracts to apply to all standard form business agreements with a value of $250,000 or less.

The current UCT protections for consumers are relatively broad, although there have so far been few cases involving them. UCTs can include (for example) unilateral price changing by the supplier without the opportunity to negotiate, terms that enable the supplier to cease to provide services at any time without notice or compensation, and terms that shift considerable risk over to the customer.  

For tech businesses, many of which rely on standard form contracts and high-volume, low value transactions, there will likely be transition costs in reviewing and amending their agreements to ensure they are fit for purpose.  

For now, the Bill is still with the Economic Development, Science and Innovation Select Committee, and is likely to become law this year. Select Committee submissions are open until 27 March 2020.