By Andrew Comer – Principal at law firm Stace Hammond
Kiwi businesses are
subject to, and regulated by, an extensive matrix of commercial laws.
A base understanding of
the legal landscape is critical.
Here’s a high-level
overview of some of the key commercial laws currently in place in New Zealand.
CONSUMER GUARANTEES ACT 1986 (“CGA”)
The CGA protects
consumers by ensuring they receive what they’ve paid for and, if a faulty
product or substandard service has been provided, consumers are provided
with repairs, a refund or replacement.
The CGA does this by
automatically implying a number of quality guarantees when any person or
business provides good or services ‘in trade’ to consumers for personal or
guarantees include that: the goods are of acceptable quality; the
goods and services are fit for purpose; the goods match the description
and samples or demonstrations provided; the goods will be owned by the
customer once purchased; the price will be reasonable if not agreed
beforehand; spare parts and repair facilities will be available; delivery
will be on time and in acceptable condition; and the services will be
performed with reasonable care and skill and will be completed within a
FAIR TRADING ACT 1986 (“FTA”)
The FTA protects
consumers against being misled or being treated unfairly, and requires all
information provided to consumers to be accurate and that information is
not withheld from consumers.
The FTA does this by
making illegal the following types of trader behaviour: misleading
or deceptive conduct; making false representations; making unsubstantiated
claims; engaging in unfair practices (e.g. bait advertising, harassment,
pyramid selling etc); and incorporating unfair contract terms into
agreements (e.g. terms that cause a significant imbalance between parties,
that are not reasonably necessary to protect the business’s legitimate
interests and which would cause detriment if enforced).
PRIVACY ACT 1993 (“Privacy Act”)
The Privacy Act
applies to any person or business that collects, uses and stores ‘personal
information’ (i.e. information about identifiable, living people).
consumers by requiring parties who collect personal information to observe
12 privacy principles which relate, generally, to: collection;
storage; security; access and correction; accuracy; retention; use and
disclosure; and the use of unique identifiers.
CREDIT CONTRACTS AND CONSUMER FINANCE ACT 2003
The CCCFA covers
transactions where consumers borrow money or buy goods on credit.
Such transactions include ‘consumer credit contracts’ (i.e. where a
borrower is given credit for personal use, such as a mortgage, credit
card, overdraft, personal or cash loan), ‘consumer leases’ (i.e. leases of
goods for personal use whereby the lessee has the right to buy or the
lease is for more than one year) and ‘buy-back transactions’ (i.e. where a
homeowner transfers an interest in their home with a right of re-purchase).
In such circumstances, a lender is bound by strict disclosure requirements. Furthermore, the borrower has numerous rights, including the right to cancel in the first few days after receiving disclosure, the right to repay early and the right to request concessions if they are suffering unexpected hardship.
PERSONAL PROPERTY SECURITIES ACT 1999 (“PPSA”)
The PPSA regulates
the creation, registration and priority of ‘security interests’ – that is,
interests which in substance secure payment of a debt or other obligations
– in ‘personal property’ (which is essentially any form of property other
than land, buildings and ships larger than 24m).
security interests is effected by registering a ‘financing statement’ on
the Personal Property Securities Register (PPSR), which is a publicly
available online noticeboard. The financing statement records key
information, most notably the collateral in respect of which security is
being taken by the creditor. If a debtor business is put into
liquidation or receivership, a secured party who has not registered its
security interest on the PPSR may lose priority to other creditors who
have registered on the PPSR, on a distribution from asset realisations.
CONTRACT AND COMMERCIAL LAW ACT 2017 (“CCLA”)
The CCLA came into
force in September 2017.
It is a significant
piece of law which regulates numerous aspects of trade including, among
other things, contractual mistakes and remedies, the sale of goods,
frustrated and illegal contracts, contracts with minors, privity (i.e. the
right of non-contractual parties to enforce rights under a contract),
electronic transactions and the carriage of goods.
COMMERCE ACT 1986 (“Commerce Act”)
The purpose of the
Commerce Act is to “promote competition in the markets for the long-term
benefit of consumers in New
The Commerce Act
does this by prohibiting various types of anti-competitive behaviour,
including: agreements that substantially lessen competition in the
market; agreements that fix, control or maintain prices (i.e. cartel
conduct); agreements that restrict output or capacity, or allocate markets
or customers; a person or a business taking advantage of their dominant
position in a market for an anti-competitive purpose; and a person or
business specifying a minimum price at which its goods or services can be
sold by another (i.e. resale price maintenance).
COPYRIGHT ACT 1994 (“Copyright Act”)
The Copyright Act
gives owners protective rights in respect of ‘original works’.
automatically (without the need for registration) in the following types
of original work when they are created: literary works; dramatic
works; musical works; artistic works; sound recordings; films;
communication works; and typographical arrangements of published editions.
The Copyright Act
gives owners the exclusive right to prevent others from doing the
following (i.e. restricted acts) with their work: copying the work;
issuing copies of the work to the public; performing, playing or showing
the work in public; communicating the work to the public; making an
adaptation of the work; or authorising anyone else to do these
things. Copyright infringement occurs if anyone does these without
the owner’s permission.
TRADE MARKS ACT 2002 (“TMA”)
The TMA governs the
registration of trade marks in New Zealand.
A trade mark is a
unique sign (or badge of origin) – typically a word, logo, or slogan, but
may include things such as a shape, colour, sound, picture or smell – that
identifies and distinguishes one trader’s goods or services from another
Registration of a
trade mark on the New Zealand trade marks register provides the owner with
exclusive use (and the exclusive right to license use) of the trade mark,
for the goods or services covered, throughout New Zealand. Use of a
trade mark that is identical or similar to a registered trade mark,
without the owner’s permission, is a ground for trade mark infringement.
ARBITRATION ACT 1996 (“Arbitration Act”)
The Arbitration Act
governs the formal dispute resolution process known as ‘arbitration’.
Arbitration is a
non-court based approach to resolving disputes where two or more parties
agree to submit a dispute between them to an independent party (i.e. the
arbitrator) to make a final, binding decision (i.e. the award). The
award is enforceable as a judgment of a court.
The Arbitration Act
provides the procedural framework, and rules, for all arbitrations
governed by that statute.
UNSOLICITED ELECTRONIC MESSAGES ACT 2007 (“UEMA”)
The UEMA prohibits
the sending to a recipient, without the recipient’s prior consent, of
‘unsolicited commercial electronic messages’ with a New Zealand link (i.e. messages sent to,
from or within New
Zealand). Electronic messages
include messages sent by way of email, fax, instant messaging and mobile
phone text. It does not extend to Internet pop-ups or
telemarketing. For the message to be ‘commercial’, it must do the
following 3 things: market or promote goods, services, land,
interests in land or business or investment opportunities; assist a person
to obtain (dishonestly) a financial advantage or gain from another; and
provide a link (or directs a recipient) to a message that does either of
The UEMA also
requires all commercial electronic messages to include accurate
information about who authorised the message and to provide a functional
Finally, the UEMA
prohibits use of address-harvesting software or a harvested-address list
in connection with the sending of unsolicited commercial electronic
The above overview has kindly been provided
by Andrew Comer, a Principal at law firm Stace Hammond. It has been
provided for general information purposes only. It is not, nor is it
intended to be treated as, legal advice and is subject to change without
notice. It is not intended to be an exhaustive list of all commercial
laws in place in New Zealand.
Andrew specialises in corporate and
commercial law and regularly provides advice in relation to start-up companies,
mergers and acquisitions, joint ventures, capital raising, commercial
contracts, corporate governance and company secretarial matters.
Stace Hammond is a New Zealand law firm with offices in Auckland, Hamilton and Tauranga with legal expertise in the areas of business, finance, corporate and dispute resolution.