Unfair Contract Terms in NZ — Fair Trading Act (2026)
About this article
Sourced from New Zealand Acts of Parliament (legislation.govt.nz), regulations, and official government guidance. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
Standard-form consumer and small-trade contracts in New Zealand can't contain unfair terms. Under sections 46H–46M of the Fair Trading Act 1986, a court can declare a term unfair if it would cause a significant imbalance, isn't reasonably necessary to protect the business, and would cause detriment if enforced. Once a term is declared unfair, it's illegal for the business to rely on it.
This protection covers the take-it-or-leave-it terms you can't negotiate — gym contracts, telco terms, subscriptions and the like. Only the Commerce Commission can apply to court for an unfair-term declaration, so reporting suspect terms to the Commission is the route to enforcement.
When does it apply?
- You're locked into a standard-form contract you couldn't negotiate.
- A term lets the business change price or cancel unilaterally, or penalises only you.
- You think a clause is one-sided and unreasonable.
What to do about an unfair contract term
- Keep a copy of the full contract and highlight the term.
- Report it to the Commerce Commission — only it can seek a court declaration.
- Raise the issue with the business; many will back down rather than face the Commission.
What should you NOT do?
- Don't assume signing means the term is enforceable — unfair terms can be struck down.
- Don't expect to void the term yourself in the Tribunal — declarations come via the Commerce Commission.
About Consumer Rights in New Zealand
New Zealand consumers are protected by two main laws. The Consumer Guarantees Act 1993 gives you automatic guarantees — that goods are of acceptable quality and fit for purpose — with the right to a repair, replacement or refund when they're not. The Fair Trading Act 1986 bans misleading and deceptive conduct, false claims, and unfair contract terms. Most everyday disputes (up to $60,000 from 24 January 2026) are resolved cheaply at the Disputes Tribunal, where lawyers are not allowed. The Commerce Commission enforces the Fair Trading Act and the Credit Contracts and Consumer Finance Act.
Consumer Protection helpline: 0508 426 678. Citizens Advice Bureau: 0800 367 222.
Common Questions
What is the unfair contract terms right in New Zealand?
Standard-form consumer and small-trade contracts in New Zealand can't contain unfair terms. Under sections 46H–46M of the Fair Trading Act 1986, a court can declare a term unfair if it would cause a significant imbalance, isn't reasonably necessary to protect the business, and would cause detriment if enforced. Once a term is declared unfair, it's illegal for the business to rely on it.This protection covers the take-it-or-leave-it terms you can't negotiate — gym contracts, telco terms, subscriptions and the like. Only the Commerce Commission can apply to court for an unfair-term declaration,...
When does it apply — unfair contract terms?
You're locked into a standard-form contract you couldn't negotiate.A term lets the business change price or cancel unilaterally, or penalises only you.You think a clause is one-sided and unreasonable.
Are unfair contract terms enforceable in New Zealand?
Keep a copy of the full contract and highlight the term.Report it to the Commerce Commission — only it can seek a court declaration.Raise the issue with the business; many will back down rather than face the Commission.
What should you NOT do — unfair contract terms?
Don't assume signing means the term is enforceable — unfair terms can be struck down.Don't expect to void the term yourself in the Tribunal — declarations come via the Commerce Commission.