Construction Site

It takes less time to do things right
than to explain why you did it wrong.

Henry Wadsworth Longfellow

What you need to know about competition
and consumer law

Five things you need to know about
consumer law


Misleading your customers is illegal

The main purpose of the Fair Trading Act is to protect consumers. You must not mislead your customers or give them false information. But remember, businesses buy goods and services too, so businesses are also protected.


Customers must be able to rely on your quotes and estimates

Providing quotes or estimates to your potential customers is a key part of doing business. A quote is an offer to do a job for a certain price. It's likely to be misleading if you charge more than your quote, unless you have explicitly agreed a variation with your customer beforehand.

An estimate is the nearest price, or range of prices, that you can give your customer based on past experience. All limits and conditions must be clearly spelled out. If there is to be a significant variation from the estimated price, you should make this, and the nature of the possible variation, very clear to your customer. You must make estimates honestly and base them on reasonable grounds.


Misleading consumers about their rights is illegal

You must not mislead your customers about their contractual or legal rights. For example, if an insurance company advises a customer “you’re only entitled to a second-hand hot water cylinder” in a situation where the customer’s insurance policy entitles them to a new hot water cylinder, this would likely be misleading under the Act.


Unfair contract terms

If you offer standard form consumer contracts to your customers, terms in that contract must be fair. Standard form consumer contracts are typically contracts with standard terms and conditions that are offered on a “take it or leave it basis” where the consumer does not have an opportunity to effectively negotiate the terms and conditions in the contract.

The laws about unfair contract terms apply to any standard form consumer contracts entered into on or after 17 March 2015 and to terms in existing contracts that are renewed or changed on or after 17 March 2015.  

Read more about unfair contract terms on our website.


Keep up to date with important changes to the Fair Trading Act

There have been some important changes to the Act that you should know about including additional rights for consumers and obligations for businesses, as well as investigation and enforcement tools for the Commission.

Read more about these changes on our website.


Please note this is a guideline only and should not be used instead of legal advice. Only the courts can make a ruling on breaches of the Fair Trading Act.