Contracts and consumer protection

Its objective is to facilitate business arrangements on commercially agreed terms and generally without the courts having to intervene unless it is absolutely necessary.

The application of contract law in New Zealand is the same regardless of whether the contracting parties are foreign-owned or New Zealand-owned. It is possible, however, to select the jurisdiction that will govern the contract and where any disputes must be heard – this can be done on either an exclusive or non-exclusive basis.

The Contract and Commercial Law Act 2017 (CCLA) provides a ‘one-stop-shop’ for various rules that relate to issues that commonly arise in contractual arrangements.

For example:

• Contractual privity: The CCLA permits a person who is not a party to a deed or contract to enforce a promise made in it for the benefit of that person
• Mistakes, frustration and misrepresentation: The CCLA outlines the remedies available where a contract contains a mistake, is impossible to perform, or has been entered into on the basis of a misrepresentation (subject to the satisfaction of certain criteria)
• The sale of goods: The CCLA implies various rights and obligations into contracts relating to the sale of goods, unless, where permitted, the parties expressly agree otherwise. For example, the CCLA specifies when property and risk will pass from seller to buyer. It also imposes minimum conditions and warranties about the quality of goods to ensure that the goods are reasonably fit for purpose
• Electronic transactions: Technology and electronic means may be used to conclude transactions, subject to default rules implied by the CCLA. For example, electronic signatures may be used to sign contracts in place of wet-ink, provided that they meet certain identification and reliability criteria
• Remedies: Depending on the relevant contractual situation, the CCLA provides the courts with the power to provide relief in any form that it thinks is just, such as variation or cancellation of the contract and/or damages

New Zealand’s trade practices and consumer protection regimes are governed by the following legislation:

• Commerce Act 1986
• Fair Trading Act 1986
• Consumer Guarantees Act 1993
• Credit Contracts and Consumer Finance Act 2003

Commerce Act 1986

The Commerce Act 1986 (Commerce Act) protects consumers by regulating commercial conduct to promote competitive markets within Aotearoa New Zealand.

The Commerce Commission was established by the Commerce Act to enforce competition and fair trading laws. To do so, the Commerce Commission has the ability to clear and authorise business mergers and acquisitions, regulate certain goods and services, receive and investigate complaints under the Commerce Act, as well as prosecute alleged contraventions of the same (see Mergers and Acquisitions).

Fair Trading Act 1986

The Fair Trading Act 1986 (FTA) regulates conduct and practices in trade to protect consumers. Notably, the FTA:

• Prohibits misleading and deceptive conduct in trade, as well as unsubstantiated, false or misleading representations
• Prohibits “unconscionable conduct” in trade broadly being unfair and unreasonable conduct, and which can involve a one-off activity or a system or pattern of conduct
• Prohibits “unfair practices” in trade such as offering gifts and prizes without intending to supply them, bait advertising, and pyramid selling schemes
• Prohibits unfair terms in standard form consumer contracts (business-to-consumer) and small trade contracts (business-to-business contracts for less than NZ$250,000 per annum)
• Establishes standards for disclosure of information relating to the kind, quality, design and other characteristics of goods or services for the benefit of consumers
• Establishes product safety standards that must be complied with for any class of goods and services to prevent risk of injury to any person
• Regulates several other consumer contractual matters, such as layby sale agreements, direct sale agreements (via telephone or door-to-door), extended warranty agreements, gift card expiry dates, and auctions

Businesses cannot contract out of the FTA with consumers, but are able to do so with other businesses under certain conditions. 

Failure to comply with the FTA constitutes an offence, which may result in various civil remedies, including fines and court orders, as well as criminal sanctions in some instances. The FTA also empowers the courts to impose management banning orders on individuals who are repeat offenders under the FTA.  Many of the prohibitions set out in the FTA are also reflected in the Financial Markets Conduct Act 2013, though relating specifically to financial products.

The Fair Trading Amendment Bill, which proposes a number of reforms to the FTA, was reported back by the Finance and Expenditure Committee on 25 September 2026 and is now awaiting its second reading in Parliament. This bill proposes three key reforms to the FTA:

• Shift most breaches from a primarily criminal enforcement model to a civil liability regime and increase penalties for certain breaches of the FTA 
• Introduce a new safe harbour defence to protect online service providers from civil liability where they act in good faith to proactively disrupt suspected scam activity
• Streamline the process for updating product safety requirements

If this bill is passed into law in its current form, maximum penalties for breaches relating  to unconscionable conduct and making (in trade) false or misleading representations in connection with the supply of goods or services are likely to increase to the greater of:

• The consideration for the relevant transaction
• Three times the amount of the gain made, or loss avoided, as a result of the breach
• NZ$1 million for individuals or NZ$5 million in any other case

Consumer Guarantees Act 1993

The Consumer Guarantees Act 1993 (CGA) provides various implied guarantees to protect consumers of goods and services from suppliers in trade. These guarantees only apply to goods and services of a kind ordinarily acquired for personal, domestic or household use, where the goods are not acquired for the purposes of resupplying them in trade, using them in a manufacturing process or repairing the goods in trade.  

The implied guarantees under the CGA include:

• Goods being of acceptable quality
• Goods being reasonably fit for a particular purpose
• Goods or services being a reasonable price, if no price has been agreede
• Goods having parts reasonably available for repair purposes
• Goods or services complying with their description or corresponding to the sample if provided
• Services being carried out with reasonable skill and care
• Goods being delivered and services being completed in a timely manner

The consumer may seek redress from the supplier or manufacturer if any of the above guarantees are not met.

Credit Contracts and Consumer Finance Act 2003

The Credit Contracts and Consumer Finance Act 2003 (CCCFA) regulates credit contracts entered into with consumers where money is loaned for personal use, including hire purchase and personal lending arrangements. However, the CCCFA does not apply where the credit is for commercial or investment purposes. 

The CCCFA sets out limits on how much interest may be calculated and charged, and sets out disclosure requirements on lenders, including around interest and fees to help consumers compare the cost of borrowing and contract terms. Lenders cannot enforce credit contracts with consumers until all of the required disclosures have been made. 

The CCCFA requires lenders to assess the suitability and affordability of the credit contract for the consumer before lending money or increasing the available credit on an existing loan. Borrowers may challenge “oppressive” contracts and the CCCFA allows courts to vary credit contract terms which the courts determine to be unfair or unreasonable.

The CCCFA did not historically cover “Buy Now, Pay Later” (BNPL) credit contracts because they do not typically charge interest or credit fees, or take security. However, since 2 September 2024, BNPL lenders were also required to comply with all obligations of a lender under the CCCFA (with some modifications). 

Further reforms to consumer credit regulation came into effect on 1 July 2026 to streamline financial services regulation,¹ including the transfer of regulatory responsibility for the CCCFA to the Financial Markets Authority. As a result of these reforms, the FMA is now the single conduct regulator for financial markets, including consumer credit.