Re-Thinking Transparency Under Section 46(2) of the Fair Trading Act: An Empirically Informed Inquiry

44 Pages Posted: 17 Jun 2020

See all articles by William Britton

William Britton

Victoria University of Wellington, Faculty of Law, Student/Alumni

Date Written: September 2, 2019

Abstract

This paper analyses empirically whether common New Zealand businesses draft their standard form agreements in a readable manner. Consumers are generally bound by the terms of such agreements, regardless of whether they have read them. Yet, if consumers chose to read them, would they be able to do so? It is this issue this paper confronts. This paper begins by exploring the nature of standard form agreements, and demonstrates why it is desirable that firms do in fact draft their contracts in a readable manner. The results of an empirical inquiry are then presented, which indicate that the majority of standard form agreements in New Zealand are unreadable to the average consumer. This paper then evaluates these findings in light of our consumer law landscape, explaining how our law, in seeking to protect consumers from unfair contract terms, has rendered a contract’s lack of transparency immaterial, thus failing to impose an express obligation on firms to draft readable contracts. This paper then submits that the law ought to be amended to require that firms draft their contracts to meet a minimum standard of readability, and that consumers should be granted the right to challenge unfair terms directly.

Keywords: "Fair Trading Act", "Unfair Contract Terms", "Procedural Unfairness", "Meaning of transparency", readability

JEL Classification: K00, K12

Suggested Citation

Britton, William, Re-Thinking Transparency Under Section 46(2) of the Fair Trading Act: An Empirically Informed Inquiry (September 2, 2019). Victoria University of Wellington Legal Research Paper No. 36/2020, Available at SSRN: https://ssrn.com/abstract=3628962 or http://dx.doi.org/10.2139/ssrn.3628962

William Britton (Contact Author)

Victoria University of Wellington, Faculty of Law, Student/Alumni ( email )

PO Box 600
Wellington, Victoria 6140
New Zealand

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