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Fair Trading Act 1986

Enforcement and remedies - Declaration of unfair contract terms

46J: Standard form contracts

You could also call this:

“Rules about contracts that are mostly written by one side”

A court can decide if a contract is a ‘standard form contract’. This means a contract where most of the terms weren’t really talked about or agreed on by both sides.

When the court is figuring this out, they’ll look at a few things:

  • Does one side have most of the power in the deal?
  • Was the contract written by one side before they even talked to the other side?
  • Did one side have to just say yes or no to the contract without being able to change it?
  • Did both sides really get a chance to talk about and change the contract terms?
  • Does the contract think about the special needs or situations of the people involved?

If someone in a court case says a contract is a standard form contract, it’s assumed to be true unless someone else can prove it’s not.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6410739.

Topics:
Business > Fair trading
Money and consumer rights > Consumer protection
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46I: Declaration of unfair contract terms, or

“Courts can decide if some contract terms are not fair for customers or small businesses”

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46K: Terms that may not be declared to be unfair contract terms, or

“Rules about which contract terms can't be called unfair”

Part 5 Enforcement and remedies
Declaration of unfair contract terms

46JStandard form contracts

  1. A court may determine that any contract in which the terms (other than terms referred to in section 46K) have not been subject to effective negotiation between the parties is a standard form contract.

  2. In determining whether a contract is a standard form contract, the court must (without limitation) take into account the following:

  3. whether one of the parties has all or most of the bargaining power relating to the transaction:
    1. whether the contract was prepared by one or more parties before any discussion relating to the transaction occurred with the other party or parties:
      1. whether 1 or more of the parties was, in effect, required either to accept or reject the terms of the contract (other than terms referred to in section 46K) in the form in which they were presented:
        1. the extent to which the parties had an effective opportunity to negotiate the terms (other than terms referred to in section 46K) of the contract:
          1. the extent to which the terms of the contract take into account the specific characteristics of any party to the contract.

            1. If a party to a proceeding alleges that a contract is a standard form contract, the contract is presumed to be a standard form contract unless any other party to the proceedings proves otherwise.

            Notes
            • Section 46J: inserted, on , by section 36 of the Fair Trading Amendment Act 2013 (2013 No 143).