Businesses are being urged to pay close attention to a broad set of consumer protections and contract law that come into effect tomorrow, along with hefty fines.
New legislation is meant to help protect consumers. Photo: 123rf.com
An amendment to the Fair Trading Act offers new protections against unfair conduct and unfair business-to-business contract terms, including unconscionable conduct.
Bell Gully senior associate Richard Massey said the act did not define the meaning of "unconscionable," leaving it up to judges to decide as cases were brought before the courts.
"I think the intent of the legislation is to exclude oppression and the worst types of conduct and that was obviously the intention when you read the background materials to the legislation," Massey said.
"The difficulty of course is understanding it and making sure that it is limited to that type of conduct and that it doesn't become a situation where many businesses are exposed to lots of different claims for reasonable commercial conduct."
In the meantime, he said traders needed to err on the side of caution.
"There's a lot of new laws that businesses are having to grapple with, particularly in the consumer protection space.
"And so I think it's important for businesses not to lose sight of this new prohibition in the landscape of other changes that they're having to deal with."
Traders that engage in unconscionable conduct can be fined up to $600,000 for a business and $200,000 for an individual.