New Zealand's Unfair Contract Terms Law Fails to Incentivise Businesses to Remove Potentially Unfair Terms from Standard Form Contracts

Abstract

This paper presents the results of a study undertaken by Victoria University of Wellington in association with the Ministry of Business, Innovation and Employment over the period December 2018 to August 2019, to assess whether businesses that are offering goods or services to consumers in New Zealand on standard form terms are including potentially unfair contract terms in those contracts. The study compared the 2015 and 2018 versions of the same standard form contracts in relation to 119 businesses to assess if those businesses had reduced the number and nature of potentially unfair terms appearing in their contracts since 2015. The study also considered the number and nature of potentially unfair terms appearing in contracts of a total of 134 businesses offering goods and services in 2018. The study found that all the contracts examined in 2018 contained potentially unfair terms and that the number of potentially unfair contract terms in standard form contracts had increased between 2015 and 2018.

Keywords: unfair contract terms, consumer law; contract law

JEL Classification: K12