Unfair contract terms – reviewed your standard forms yet?

The Commerce Commission has released draft guidelines setting out its proposed approach to new provisions on unfair contract terms under the Fair Trading Amendment Act 2013.

Terms common to standard form contracts across a range of industries may be deemed "unfair" under the new regime, which will come into effect on 17 March 2015, so it is important that you review your contracts to ensure any potentially unfair terms are justifiable.

Submissions on the guidelines close on 30 September.

What is an unfair contract term?

Only the Commission can seek a declaration that a term in a standard form consumer contract is unfair. The Court must be satisfied that the term:

• would cause a significant imbalance