08 - 12 Fair Trading Act

Question 1

FTA 1986 ensures..

Answer 1

“No person shall, in trade, engage in conduct that is misleading or deceptive conduct or is likely to mislead or deceive” - s2(1).

Question 2

Pre-sale protection

Answer 2

Regulates conduct, advertising, information, representations…

Question 3

Anyone can..

Answer 3

Make a complaint under the Fair Trading Act (not just consumers).

Question 4

Main purpose:

Answer 4

To prevent traders in the new deregulated market taking advantage of that situation to treat consumers and other players in the market unfairly.

Question 5

FTA prohibits

Answer 5

• misleading and deceptive conduct in trade generally – catch-all (s9)
• misleading conduct in relation to goods (s10)
• misleading conduct in relation to services (s11)
• false or misleading representations (s13)
• unfair practices (s17, s19)

Question 6

s9: Misleading and Deceptive Conduct

Answer 6

• A seller cannot mislead you in order to induce you to buy any goods/services;
• Covers claims on availability of goods advertised, condition or description of goods and using representations to sell goods etc.;
• Intent is not the issue (no requirement that the defendant intended to mislead or deceive). The relevant consideration is the conduct itself.

Question 7

s 9 – the conduct

Answer 7

The conduct in question must be capable of being misleading.
The person complaining must show that he was in fact misled or deceived (or that the conduct was likely to mislead or deceive other people).
Must show that reasonable people would also be misled or deceived by this conduct.

See AMP Finance NZ Ltd v Heaven (1997)

Question 8

s 10 –Misleading conduct in relation to goods

Answer 8

“No person shall, in trade, engage in conduct that is liable to mislead the public as to the nature, manufacturing process, characteristics, suitability for a purpose, or quantity of goods.”

Question 9

s13 - False Representations

Answer 9

as to kind, standard, quality, …., quantity of goods or services
as to age of goods
as to sponsorship, endorsement etc.
price
need
existence of guarantees or remedies under the CGA 1993
as to origin

Question 10

False representations price, quality, standard, composition of goods

Answer 10

The word “representation” refers to any claim or statement made by a trader regarding its product or service verbally or in writing.

Question 11

Other Unfair Practices

Answer 11

s17 Offering free gifts such as ‘buy one, get one free’ without intending to provide the items.

s19 Bait advertising
Offering goods or services without enough supply to reasonably meet likely consumer demand.

Question 12

Remedies

Answer 12

Fines up to $600,000 (company) or $200,000 (individual) (s 40)
Injunctions to stop a business from carrying out the illegal practice (s 41)
Corrective advertising (s 42)
Variety of “other orders” including damages and refund (s 43)

Question 13

Defences (s 44)

Answer 13

Reasonable mistake; or
Reasonable reliance on information supplied by another person; or
Beyond the defendant’s control. Took reasonable precautions and due diligence to avoid the contravention; or
Advertisements published in the ordinary course of business by a publisher.