Fair Trading Act 1986 Research 2022
Added on 2022-10-13
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Running Head: FAIR TRADING ACT 1986 1
FAIR TRADING ACT 1986
Name
Institutional Affiliation
FAIR TRADING ACT 1986
Name
Institutional Affiliation
FAIR TRADING ACT 1986 2
According to Alexandra Sims who is a professor of commercial law at the Auckland
university School of business, the unfair contract terms defined in the Fair-Trading Act or 1986
are evidently ineffectively. These laws, as much as they were enacted to protect consumer
interests while establishing contracts, appear to have become counterproductive, being unable to
serve the purpose for they were initially intended (Gardner & Sheppard, 2012).
The amendments define unfair contract terms as those which cause an imbalance between
a consumer and business. The obligations and rights of these two parties should be well balanced
to ensure that business interests do not end up causing detriment on the objectives of a consumer.
The research group examined about 115 retail contracts before and after the amendments were
implemented. The outcome of the research concluded that, priori to the change of the law, nearly
all contract had somewhat unfair terms, and this totaled to 1225 terms. About four contracts were
evaluated to be delivery terms (Sims, 2012).
After the amendments took effect, only 34% of the contract had been altered so as to
eliminate the unfair terms. However, all contracts still maintained unfair terms, although to a
lesser degree, and this time it was 1086 terms. It was also found that the large corporations were
more likely to have changed the unfair terms (39%) and this was unlike the smaller corporation
(27%). 56% of the contracts allowed enterprises to freely alter prices, while still compelling
consumers to pay for the termination charges. About 9% of companies allowed clients to cancel
contracts without charges. Even now, companies do not claim liability for the loss accrued from
the breach of contracts. It is unarguable that he Unfair Contract Terms is evidently not functional
as it was expected (Burke, Genn-Bash, & Haines, 2018). The greater worrying factor is that
consumers cannot stand up to the unfair contract terms. This provision is only allowed to the
Commerce Commission, which is expected to present the complaints to the High court or
According to Alexandra Sims who is a professor of commercial law at the Auckland
university School of business, the unfair contract terms defined in the Fair-Trading Act or 1986
are evidently ineffectively. These laws, as much as they were enacted to protect consumer
interests while establishing contracts, appear to have become counterproductive, being unable to
serve the purpose for they were initially intended (Gardner & Sheppard, 2012).
The amendments define unfair contract terms as those which cause an imbalance between
a consumer and business. The obligations and rights of these two parties should be well balanced
to ensure that business interests do not end up causing detriment on the objectives of a consumer.
The research group examined about 115 retail contracts before and after the amendments were
implemented. The outcome of the research concluded that, priori to the change of the law, nearly
all contract had somewhat unfair terms, and this totaled to 1225 terms. About four contracts were
evaluated to be delivery terms (Sims, 2012).
After the amendments took effect, only 34% of the contract had been altered so as to
eliminate the unfair terms. However, all contracts still maintained unfair terms, although to a
lesser degree, and this time it was 1086 terms. It was also found that the large corporations were
more likely to have changed the unfair terms (39%) and this was unlike the smaller corporation
(27%). 56% of the contracts allowed enterprises to freely alter prices, while still compelling
consumers to pay for the termination charges. About 9% of companies allowed clients to cancel
contracts without charges. Even now, companies do not claim liability for the loss accrued from
the breach of contracts. It is unarguable that he Unfair Contract Terms is evidently not functional
as it was expected (Burke, Genn-Bash, & Haines, 2018). The greater worrying factor is that
consumers cannot stand up to the unfair contract terms. This provision is only allowed to the
Commerce Commission, which is expected to present the complaints to the High court or
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