The Fair Trading Act is one of the most important pieces of legislation that governs businesses in New Zealand. It was designed to protect consumers from unscrupulous business practices and to ensure fair competition in the marketplace. However, there are some businesses that try to contract out of the Fair Trading Act. But is this legal and ethical? Let`s take a closer look.
What is the Fair Trading Act?
The Fair Trading Act was enacted in 1986 and was amended in 2012. It covers a wide range of business practices, including advertising, marketing, sales, and customer service. The Act aims to promote fair competition, protect consumers from unfair or misleading business practices, and encourage ethical and responsible behavior by businesses.
The Act applies to all businesses operating in New Zealand, regardless of their size or industry. It sets out a number of rules and regulations that businesses must comply with, such as:
– Not making false or misleading representations about goods or services
– Not engaging in misleading or deceptive conduct
– Not using unfair contracts or terms that disadvantage consumers
– Providing consumers with clear and accurate information about goods and services
– Responding to customer complaints in a timely and effective manner
Why do businesses try to contract out of the Fair Trading Act?
Some businesses try to contract out of the Fair Trading Act because they believe it gives them a legal loophole to engage in practices that would otherwise be prohibited. For example, a business might include a clause in its contract stating that the customer agrees to waive their rights under the Act. This could include a waiver of the right to sue for damages or to make a complaint to the Commerce Commission.
However, it`s important to note that businesses cannot contract out of the entire Act. There are some provisions that are considered “non-negotiable” and cannot be waived by agreement. For example, businesses cannot contract out of the provisions that prohibit false or misleading advertising or unfair contract terms.
Is it legal to contract out of the Fair Trading Act?
The short answer is no, it`s not legal to contract out of the Fair Trading Act. The Act expressly prohibits businesses from including unfair contract terms that would limit the rights of consumers or contravene the Act. If a business includes a clause in its contract that attempts to contract out of the Fair Trading Act, that clause is likely to be deemed unenforceable by a court.
It`s also important to note that even if a business is able to contract out of some provisions of the Act, this does not absolve them of their ethical responsibilities. All businesses have a responsibility to act ethically and responsibly, even if they are not legally required to do so. Engaging in deceptive or unfair practices may lead to reputational damage and loss of consumer trust, even if it`s technically legal.
In conclusion, businesses cannot contract out of the Fair Trading Act. The Act is an important piece of legislation that protects consumers and promotes fair competition. Any attempt to contract out of the Act is likely to be deemed unenforceable by a court and could damage the reputation of the business. All businesses have a responsibility to act ethically and responsibly, even if they are not legally required to do so.