Plain language law

New Zealand law explained for everyone

Fair Trading Act 1986

Unfair conduct - Unfair contract terms

26C: Definition of small trade contract

You could also call this:

“Explaining what counts as a small business agreement”

In this law, a small trade contract is a special kind of agreement. You need to know three things about it:

  1. All the people or businesses involved in the contract must be doing business.
  2. It can’t be a contract that’s made for personal or household use.
  3. The total value of all the business done between the parties in a year can’t be more than a certain amount when they first start working together.

If someone in a legal case says a contract is a small trade contract, everyone has to assume it is unless someone else can prove it isn’t.

There’s another part of the law, section 26E, that might change how this definition works in some cases.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS736912.

Topics:
Business > Fair trading
Money and consumer rights > Consumer protection
Previous

26B: Unfair contract terms in standard form small trade contracts, or

“Rules about unfair parts in small business contracts”

Next

26D: Small trade contracts: trading relationship, annual value threshold, and other definitions, or

“Rules for small business deals: who's involved, how much money, and what words mean”

Part 1 Unfair conduct
Unfair contract terms

26CDefinition of small trade contract

  1. In this Act, unless the context otherwise requires, a contract is a small trade contract if—

  2. each party to it is engaged in trade; and
    1. it is not a consumer contract; and
      1. it does not comprise or form part of a trading relationship that exceeds the annual value threshold when the relationship first arises.

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

        2. This section is subject to section 26E.

        Notes
        • Section 26C: inserted, on , by section 7 of the Fair Trading Amendment Act 2021 (2021 No 32).