Full source list for What does the Fair Trading Act actually require of me as a small business?
Seven numbered references for /wayfinder/refs/fair-trading-act-essentials:
1. The Fair Trading Act 1986 applies to conduct in trade and binds every person engaged in trade in New Zealand, including overseas suppliers selling into the New Zealand market. Whether the recipient of the conduct is a consumer, a business, or any other person does not affect whether the Act applies — the threshold is the trader's conduct, not the recipient's status.
2. Section 9 of the FTA: "No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive." The test is objective — whether a reasonable person in the position of the affected party would be misled — and intent to mislead is not required. The leading Supreme Court authority is Red Eagle Corporation Ltd v Ellis [2010] NZSC 7, which confirmed that liability under s9 can arise even where the trader was innocently passing on third-party information, if reasonable reliance and loss followed.
3. Section 12A of the FTA prohibits unsubstantiated representations: a person must not, in trade, make a representation if they do not have reasonable grounds for it at the time the representation is made, regardless of whether the representation is in fact true. Section 12B lists the factors a court must consider in determining whether reasonable grounds existed (nature of the goods/services, nature of the representation, research undertaken, qualifications of those providing supporting information, and the costs and time involved). Inserted into the Act on 17 June 2014.
4. Part 4A of the FTA — unfair contract terms in standard form contracts. Since 17 March 2015, the regime applies to standard form consumer contracts. Since 16 August 2022 (Fair Trading Amendment Act 2021), the regime extends to standard form small trade contracts — B2B contracts where each party is in trade, the contract is not a consumer contract, and the trading relationship has a total annual value of $250,000 (including GST) or less when the trading relationship first arises. A court may declare a term unfair if all three of the following apply: the term would cause a significant imbalance in the parties' rights and obligations; the term is not reasonably necessary to protect the legitimate interests of the party advantaged by it; and the term would cause detriment (financial or otherwise) if applied, enforced, or relied on. Only the Commerce Commission can apply for a declaration.
5. Section 7 of the FTA — prohibition on unconscionable conduct, inserted on 16 August 2022. Subsection (1): "A person must not, in trade, engage in conduct that is unconscionable." Subsection (2) lists factors a court may have regard to in determining whether conduct is unconscionable, including the relative strength of bargaining positions, whether the affected person was subjected to unfair pressure or tactics, unreasonable failure to disclose risks, and the circumstances of any contract. The provision is "not limited by any rule of law or equity relating to unconscionable conduct" — it stands as a statutory standard rather than codifying the common-law doctrine. First enforcement cases filed by the Commerce Commission in February 2026: Commerce Commission v The TV Shop / Brand Developers Ltd; Commerce Commission v HouseSmile / Tech Vault Enterprises Ltd. No first-instance decisions have been issued as of last_verified date.
6. Penalty regime current at last_verified date: maximum fine $200,000 for an individual and $600,000 for a body corporate per breach of most FTA provisions. The Fair Trading Amendment Bill, introduced in early 2026 and expected to pass late 2026, will raise maximum penalties to the higher of (a) $1,000,000 individual / $5,000,000 body corporate, (b) three times the commercial gain from the breach, or (c) the total value of the transactions involved. The Bill also shifts most non-serious provisions from criminal to civil enforcement, retaining criminal liability for serious offences (pyramid schemes, serious product safety breaches, obstructing the Commerce Commission). The new penalties will not apply retrospectively.
7. Contracting out — section 5D permits parties in trade to include a contracting-out provision in a written agreement covering sections 9, 12A, 13, and 14(1), but only where the goods or services are supplied and acquired in trade and where it is fair and reasonable for the parties to be bound by the exclusion. Section 5D(4) lists the factors a court must consider in determining fair and reasonableness, including the subject matter and value of the agreement, respective bargaining power, and whether legal advice was received. The s7 unconscionable conduct prohibition, the Part 4A unfair contract terms regime, and most other FTA provisions cannot be contracted out of at all.