Unfair contract terms in the technology sector: Risks and rewards

  • Podcast

    03 April 2024

Unfair contract terms in the technology sector: Risks and rewards Desktop Image Unfair contract terms in the technology sector: Risks and rewards Mobile Image


In this episode, Partner Richard Wells and Senior Associate Shona Foster delve into the intricacies of navigating standard terms and unfair contract terms in the technology sector, if you are presented with what you think could be an unfair contract term in a small trade contract. They explore the legal landscape surrounding these issues, discussing the implications of recent legislative changes and enforcement mechanisms by the Commerce Commission, and how this might impact on the way you approach these clauses. Should you just accept them in the hope that they won’t be enforceable, or should you try to negotiate them? Through insightful analysis and practical examples, they offer guidance on identifying, negotiating, and addressing potential unfair contract terms, empowering businesses to make informed decisions and effectively manage legal risks in their contracts.

[00:00 - 03:34] Richard and Shona start off by giving a recap of the previous episode's discussion on standard form small trade contracts and the unfair contract terms regime. They then give an overview of how the Fair Trading Amendment Act 2021 in New Zealand has impacted on standard form small trade contracts.

[03:35 - 7:02] They discuss the recent history and context of the legislation surrounding unfair contract terms for small trade contracts in New Zealand. The pair highlight the differentiation from consumer contracts and grocery supply contracts, which are not discussed in this podcast. They provide an overview of how the enforcement regime works, explaining the role of the Commerce Commission.

[07:03 - 10:59] Richard and Shona explain the need to think about whether the clauses could be exempt from being considered unfair contract terms. They move into the decision making process when encountering potential unfair terms. They then weigh up the benefits and risks of accepting standard form contracts without negotiation.

[11:00 - 14:49] They explore negotiation strategies and the implications for the contract's enforceability. They then outline considerations for businesses in deciding whether to negotiate, accept, or walk away from a standard form contract. Richard then gives insight into the challenges and uncertainties associated with pursuing legal remedies in New Zealand.

[14:50 - 20:48] The two examine the outcomes and implications of negotiation attempts with suppliers. Lastly, they discuss the potential evolution of New Zealand's approach to unfair contracts, drawing comparisons to the Australian model.

Information in this episode is accurate as at the date of recording, 12 March 2024.

Please contact Richard or Shona or any of our Technology team if you need legal advice and guidance on any of the topics discussed in the episode.

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