After successfully establishing your business in Australia, you may consider expanding internationally. Generally, Australian businesses consider New Zealand the first step in international expansion. If you plan on expanding your business to New Zealand, you will need to familiarise yourself with local New Zealand laws and regulations and how they may apply to you. This article will consider the key differences between consumer law in Australia and New Zealand.
Australian Consumer Law
In Australia, businesses providing goods and services to consumers must comply with the Competition and Consumer Act 2010 (Cth). More specifically, they must consider Australian Consumer Law contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law). Generally, the Australian Consumer Law sets out the rights and remedies businesses must provide consumers.
This includes:
- consumer guarantees for goods and services; and
- right to a repair, replacement or refund where the goods and services fail to meet the aforementioned consumer guarantees.
The Australian Consumer Law applies to all businesses providing goods and services to a consumer, and cannot be contracted out – meaning the Australian Consumer Law will apply regardless of what your terms and conditions say.
New Zealand Consumer Law
In New Zealand, the rights and remedies available to consumers are governed by the Consumer Guarantees Act 1993 and the Fair Trading Act 1986 (New Zealand Consumer Law). Similar to the Australian Consumer Law, the New Zealand Consumer Law provides minimum consumer guarantees.
For example, suppose the supply of goods and services is in a B2B transaction. This means that you are supplying goods and services to other businesses, even if they are goods and services for household or domestic use. Thus, the parties can agree, in the terms and conditions, that the New Zealand Consumer Law will not apply. To contract out of the consumer law, it must be fair and reasonable for the parties in the given circumstances. Furthermore, both parties must:
- be operating in trade (i.e. be a business);
- agree to contract out of the New Zealand Consumer Law; and
- sign a written agreement.
Definition of Consumer
One of the key differences between the consumer laws in Australia and New Zealand is the definition of consumer.
Under the Australian Consumer Law, a “consumer” is someone who has acquired goods and services up to a value of $100,000, or the goods and services acquired are of a kind ordinarily acquired for personal, domestic or household use, or the goods consist of acquired is a car or trailer acquired for use principally in the transport of other goods on public roads. Despite the above, a person will not be considered a consumer if they hold themselves out as acquiring the goods for re-supply, or to use them up or transform them, in trade or commerce, in a production or manufacturing process or to repair or treat other goods or fixtures on land.
In contrast, under the New Zealand Consumer Law, a “consumer” is anyone that acquires goods and services of a kind ordinarily acquired for personal, domestic or household use or consumption. Under this definition, a person will not be a “consumer” when they are acquiring the goods or services:
- for the purposes of resupply;
- consuming them in the course of production or manufacture; or
- in the case of goods, repairing or treating in trade other goods or fixtures on land.
Unfair Contract Terms Regimes
In New Zealand, the unfair contract terms regime applies to all standard-form consumer or standard-form small trade contracts. Whilst there is no monetary threshold for the definition of a consumer, for a small trade contract to fall within the ambit of the regime, the value of a B2B contract must be less than $250,000 NZD per year. The New Zealand regime also does not require either party of a small trade contract to be a small business, therefore, as long as both parties are in trade or commerce, and the monetary threshold is met, the unfair contract terms regime will apply to a B2B transaction.
In Australia, regulators and consumers can challenge an unfair contract term in a court or tribunal. However, in New Zealand, only the Commerce Commission can do this. It is important to note that you cannot contract out of the unfair contract terms regime in either jurisdiction.
This guide will help you expand your successful franchise overseas, with a clear roadmap, key steps and traps to avoid.
Key Takeaways
Whilst the consumer laws in Australia and New Zealand are substantially similar, there are several key differences. Both will apply in different circumstances given the differing definitions of consumer, and the unfair contract terms regime. Furthermore, you may contract out of the New Zealand Consumer laws in B2B transactions. However, Australian Consumer Law applies to all transactions where at least one party meets the definition of “consumer”. If you are planning on expanding your business, you must understand the differences between the consumer laws applicable in Australia and New Zealand.
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The supply of goods and services in Australia is governed by the Australian Consumer Law contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth). The Australian Consumer Law sets out the obligations a business has in relation to the quality of the goods and services provided, the remedies available to a consumer if the goods and services fail to meet the minimum requirements, and generally sets out regulations relating to the supply of the goods and services (such as advertising and marketing requirements).
You must comply with New Zealand Consumer Laws as soon as you start supplying goods and services to consumers (as defined in the New Zealand Consumer Law) located within New Zealand.
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