What does the Fair Trading Act actually require of me as a small business?

What to watch for

Six things to track if you're trying to stay on the right side of the FTA — most of which the conventional "comply with consumer protection law" framing flattens.

1. Section 9 is the catch-all, and it doesn't require intent. Section 9 prohibits any person, in trade, from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive.² Likely to is the operative phrase. You don't have to have intended to mislead — and a fine-print disclaimer at the bottom of an ad doesn't fix a misleading overall impression at the top. The test is what a reasonable person in the position of the affected customer would take from the conduct as a whole. The SMB traps that recur in enforcement: implied "made in NZ" claims when assembly is local but components aren't; "was/now" pricing where the "was" price wasn't a genuine prior selling price; comparison claims against named competitors without the comparison being apples-to-apples; scarcity claims ("only 2 left!") that aren't real. None of these need to be deliberate to breach s9.

2. Unsubstantiated representations (s12A) — you need reasonable grounds at the time you make the claim. Section 12A makes it an offence to make a representation in trade without reasonable grounds for it, irrespective of whether the representation turns out to be true.³ The grounds have to exist when you make the representation. Working out afterwards that you happened to be right isn't a defence. This bites on performance claims ("3x faster", "lasts 10 years"), health and product-effect claims, and comparative-quality claims. The operational discipline: before you publish a claim, write down what your evidence is. If you can't, the claim isn't ready.

3. The unfair contract terms regime now covers B2B small trade contracts. You're affected on both sides. Since 16 August 2022, Part 4A of the FTA extends the unfair-contract-terms regime to standard form small trade contracts — B2B contracts where both parties are in trade, the contract isn't a consumer contract, and the trading relationship is worth $250,000 (incl GST) or less per year when it first arises.⁴ A term in a standard form contract can be declared unfair on Commerce Commission application to the High Court or the District Court (FTA s46H(1)) if it causes a significant imbalance in rights and obligations, isn't reasonably necessary to protect the legitimate interests of the party who benefits from it, and would cause detriment if applied. Once declared unfair, the term can't be enforced and applying/relying on it is a breach. Both sides matter: if you issue standard form contracts to small suppliers or buyers, review them; if you receive standard form contracts from larger counterparties, you now have protection you didn't before August 2022. Most commercial commentary frames this as a compliance burden on the issuer side and misses the protection side.

4. Unconscionable conduct (s7) is new(ish), broadly framed, and the first cases are landing now. Section 7 was inserted on 16 August 2022 and prohibits conduct that is unconscionable in trade.⁵ The court considers factors including the relative bargaining strength of the parties, whether the affected person was subjected to unfair pressure or tactics, whether the trader unreasonably failed to disclose risks, and the circumstances of any contract. The Commerce Commission filed the first two cases in February 2026 — both involving high-pressure sales tactics against vulnerable consumers. That's the obvious-looking end of the spectrum; the provision's reach into less obviously-egregious commercial conduct will only become visible as more cases land over 2026-28. For typical SMBs the message is narrow: don't run pressure tactics, don't exploit asymmetric information about risks, don't structure deals that materially depart from accepted business standards. The threshold is high; the consequences if you cross it are real.

5. The contracting-out exception is narrow. You generally can't contract out of FTA obligations. There's a limited B2B exception under s5D for sections 9, 12A, 13, and 14(1) — but it requires the agreement to be in writing, both parties in trade, in the course of trade, and fair and reasonable for them to be bound by the exclusion. The unconscionable conduct (s7) and unfair contract terms (Part 4A) provisions cannot be contracted out of at all. The "no liability for any representations made during negotiations" boilerplate in many supplier T&Cs is narrower than it looks — it gets you only as far as the s5D exception runs, which is to say: not into the Part 4A or s7 territory, and only the four named sections in B2B-only circumstances.

6. Penalties are at $200,000 / $600,000 now — pending Bill raises them to $1m / $5m or higher. Current maximums are $200,000 per breach for individuals and $600,000 for body corporates.⁶ The Fair Trading Amendment Bill, introduced early 2026 and expected to pass late 2026, raises the maximums to the higher of $1m (individual) / $5m (body corporate), three times the commercial gain from the breach, or the total value of the transactions involved. The Bill also shifts most non-serious provisions from criminal to civil enforcement (serious provisions — pyramid schemes, serious product safety breaches, obstructing the Commission — stay criminal). Worth knowing because it changes the scale of exposure once it lands; doesn't change the substance of what's prohibited. If the older content you've read is citing $200K / $600K confidently, that's correct as of writing but may be out of date within the year.

A separate point on what the FTA actually is operationally. The conventional framing is consumer protection — rules that protect consumers from bad traders, that you comply with by training your staff not to make misleading claims. That framing collapses the two-sided shape. The Act regulates conduct in trade, not conduct directed at consumers — every duty under it applies to you whether you're selling to consumers or to other businesses, and the 2022 changes deliberately extended that symmetry by giving small-trade-contract buyers the same UCT protection consumer-contract buyers have had since 2015. Most of this stuff has a cheap first-screen — if you'd be embarrassed to tell your mother the unvarnished version of how you're describing your product, pricing your offer, or pressuring a customer to sign, you're probably the wrong side of s9 or s7, and the Commerce Commission's enforcement profile bears that out. The watch-fors above are for the cases where the mother-test passes but the rules still apply — the unsubstantiated-representations discipline on performance claims, the UCT exposure on standard form contracts you haven't reviewed since 2022, the narrow contracting-out exception. The operational discipline isn't "watch what we say to customers" — it's the standards apply to the whole way we represent ourselves in trade, and they cut both ways. If you're issuing standard form contracts to small suppliers, you have new obligations. If you're receiving them from larger counterparties, you have new protections. Most SMBs are doing both at different points in the day; the Act is the floor under both halves.

Where this entry stops

This entry covers the FTA framework for SMBs trading in NZ — conduct rules, contract-term rules, the 2022 changes, the pending penalty Bill. It doesn't cover:

• The Consumer Guarantees Act side of consumer law. Different framework — guarantees about the goods and services themselves, not conduct rules about how they're sold or described. The s13(i) overlap (where "no refunds" signage is independently an FTA offence) is named in the Consumer Guarantees Act supplier-side entry.
• Defending an FTA enforcement action. If the Commerce Commission has written to you, opened an investigation, or filed proceedings — stop reading and call a specialist competition/consumer lawyer. The cost of getting the early steps wrong compounds; lawyer time is meaningfully cheaper than the wrong response to a section 47G information request.
• Product safety standards and consumer information standards. Parts 2 and 3 of the FTA cover compulsory product safety standards (children's toys, baby walkers, cigarette lighters, others) and consumer information standards (fibre content labelling, country of origin for clothing and footwear). If you import or manufacture covered goods, additional compliance applies — Commerce Commission product safety pages have the detail.
• Sector-specific conduct rules. Credit (CCCFA), financial services (FMCA), real estate (Real Estate Agents Act), telecommunications, motor vehicle dealers — each layers its own conduct rules on top of the FTA. If you're in any of those sectors, the FTA is the floor under the sector rules, not a substitute for knowing them.
• B2B buyer-side specifics on contracting-out and UCT. What protections you have when you're the small party receiving a larger counterparty's standard form contract — including what to look for in supplier T&Cs that are trying to contract out. See the B2B buyer protections entry.

If you're issuing standard form contracts and haven't reviewed them since August 2022, that's the highest-leverage move — there's a 3.75-year backlog of contracts that may carry unfair terms by post-2022 standards. If you're making performance or comparison claims in advertising and you haven't written down the evidence, write it down before the next claim goes out. If the Commission has been in touch in any form, stop reading wayfinder content and call a lawyer.

A claim you can substantiate is one you can defend — against the chargeback, the refund demand, the customer who says you oversold, not just the Commerce Commission. The "write the evidence down before you publish" habit is the same habit that keeps you out of disputes. Skip it and you're re-litigating your own marketing every time a customer pushes back.

Last verified 12 May 2026 against the Fair Trading Act 1986 (sections 7, 9, 12A, 13, 19, 21, 26A, 46H, 46I; Part 4A) at legislation.govt.nz, the Commerce Commission Unfair Contract Terms Guidelines (August 2022), Commerce Commission unconscionable conduct guidance, and current commentary on the pending Fair Trading Amendment Bill. Full source list: references. Note: the unconscionable conduct provision is operationally young — the Commerce Commission filed the first two cases in February 2026 and no first-instance decisions have landed. The pending Fair Trading Amendment Bill (expected late 2026) will raise penalty maximums; substance is otherwise stable.