Standard Business Terms: The Life Belt for the Drowning Consumer

Abstract

Standard business terms are playing an important part in everyone’s life. Almost every contract includes them. These contract are provided by the trader and the consumer most of the time has only the option to accept or abandon the product. The trader therefore has the opportunity to compile unfair terms. Several jurisdictions have enacted legislation which protects the consumer against unfair terms. New Zealand has no such legislation. This paper shows that New Zealand should introduce legislation against unfair standard business terms. It considers the current protection and shows that this protection is not sufficient. One of the primary aims of the European Union is to protect the consumer. Since every Member State had different or no legislation to protect the consumer in this regard it issued a Directive to establish a minimum level of protection. Germany and the United Kingdom had to implement it in their legislation and performed it in different ways. Influenced by the EU Australia enacted legislation to protect the consumer against unfair terms. The paper compares the different attempts and derives a recommendation for New Zealand.