“Many things you do every day may have a legal impact on your business?”

Finding out or confirming what you already suspected - that many things you do in your everyday life have some legal impact on you and your business will help you run your business more efficiently. Prevent unnecessary costs when you comply with legislative rules by understanding the consequences of non compliance with consumer legislation.

Do you own or manage a business? Are you in retail sales or are you in the service industry or in the trades sector? Do you know that both the Fair Trading Act and the Consumer Guarantees Act have recently been amended?    

The Fair Trading Act 1986 Amendments.

The most recent and significant amendment to the Fair Trading Act 1986 which will have an impact on your business is when you make unsubstantiated representations. Essentially, you need to be aware not to make any statements without reasonable grounds for making the representations to customers/clients regardless of whether the representations were false or misleading. This is new to the Act. There has always been a provision on making false or misleading representations. However, the amendment now includes a specific provision on making unsubstantiated representations and associated provisions on matters that the Court should consider in relation to the unsubstantiated representations.

The provisions do not allow for you to claim that you did not intend to make statements that are false or misleading. A breach of the provisions is an offence and leads to serious consequences of a conviction and a fine. In the case of an individual, a fine not exceeding $200,000 and in the case of a body corporate, a fine not exceeding $600,000.  

Consumer Guarantees Act 1993 amendments.

The other piece of consumer legislation which has been amended is the Consumer Guarantees Act 1993. The most significant of the amendments is the inclusion of a guarantee as to delivery. If you are a retailer or a supplier of goods to a consumer who is acquiring that good for his or her own personal use, and you, the supplier have agreed to deliver the goods to the consumer, that guarantee requires that you deliver the goods within the time frame agreed between you and the consumer or within a reasonable time where there is no agreed time of delivery.  The consequences of breaching any of the guarantees in the Consumer Guarantees Act 1993 are not criminal but the consumer can seek redress from you, the supplier, in the form of damages where the breach of the guarantee leads to a failure of substantial character.

Whilst the consequences are not criminal, the expense of damages could be costly in terms of monetary value and reputational credibility.  

If you wish to find out more about the impact of the legislation on your business or have any questions or comments on the article above, please contact info@pst.nz.

Written by Amelia Longuet, Managing Director, School of Business and Public Sector Training (PST NZ), an All of Government Consultancy Services panel provider.  PST NZ offers and delivers Legal Executive qualification courses and legal compliance/regulatory workshops.