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Commerce Act 1986

Restrictive trade practices - Cartel provisions

32: Exception for vertical supply contracts

You could also call this:

"Some supply contracts are exempt from a law that stops companies from fixing prices to reduce competition."

Illustration for Commerce Act 1986

If you have a contract with someone who supplies you with goods or services, section 30 of the Commerce Act does not apply to you. This is if the contract is between a supplier and a customer, and the contract is about the supply of those goods or services. The contract can even say what the maximum price is that you can sell those goods or services to someone else. You are exempt from section 30 if the main purpose of the contract is not to reduce competition between you and the supplier. The main purpose of the contract can be figured out by looking at what you or the supplier do, or by looking at other relevant circumstances.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM88273.

Topics:
Business > Fair tradingMoney and consumer rights > Consumer protection
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"Buying together with others is okay, and you can agree on a price without breaking the law."

Part 2Restrictive trade practices
Cartel provisions

32Exception for vertical supply contracts

  1. Nothing in section 30 applies to a person in relation to a cartel provision in a contract, if—

  2. the contract is entered into between a supplier or likely supplier of goods or services and a customer or likely customer of that supplier; and
    1. the cartel provision—
      1. relates to the supply or likely supply of the goods or services to the customer or likely customer, including to the maximum price at which the customer or likely customer may resupply the goods or services; and
        1. does not have the dominant purpose of lessening competition between any 2 or more of the parties to the contract.

        2. The purpose referred to in subsection (1)(b)(ii) may be inferred from the conduct of any relevant person or from any other relevant circumstance.

        Notes
        • Section 32: replaced, on , by section 8 of the Commerce (Cartels and Other Matters) Amendment Act 2017 (2017 No 40).