02 Mar Business briefs | Summer 2020
Unfair contract terms
The High Court has declared a contract term ‘unfair’ for the first time since the 2015 amendments to the Fair Trading Act 1986 (FTA) that make unfair contract terms unenforceable.
Home Direct Ltd sells goods to consumers online with delivery directly to a consumer’s home. Consumers can buy goods from Home Direct on credit and pay them off over time. Home Direct’s standard consumer contracts contained a voucher entitlement scheme. If a consumer continued to make direct debit payments to Home Direct after they had paid off their item, the additional payments would be converted into vouchers to be used to buy other items from Home Direct.
The scheme had two terms that, together, the court considered were unfair:
- The vouchers were non-refundable, and
- If not used within 12 months, the vouchers expired allowing Home Direct to keep the additional payments.
Under the FTA, a term in a standard consumer contract could be unfair if it creates a significant imbalance in the parties’ rights and obligations, is not reasonably necessary to protect legitimate business interests and causes detriment to a party.
This case highlights the need for businesses to review their terms of trade, particularly given that the government has announced its intention to extend these rules to include business-to-business contracts.
Businesses should be cautious when sending commercial electronic messages
The High Court recently imposed a $36,000 fine against the New Zealand Trustees Association for sending 24,000 unsolicited commercial electronic messages. The Unsolicited Electronic Messages Act 2007 outlines the rules for anyone sending messages electronically with marketing or promotional material, known as ‘commercial messages’.
There are three general guidelines that can help keep you within the law when sending a commercial message:
- Ensure you have consent from the recipient to send them commercial messages
- Include a functional unsubscribe facility in the message, and
- Provide accurate sender information to the recipient.
You should not presume that because a person has provided contact details for another matter in the past that they have consented to receive further messages from your business.
Make sure you are aware of the rules and, if necessary, talk with us if you are considering a marketing strategy that will involve sending commercial messages.
Mānuka honey trade mark disputes
An ongoing dispute for the MANUKA HONEY trade mark demonstrates the importance of identifying your intellectual property (IP) and protecting that IP in the markets in which you trade.
The Mānuka Honey Appellation Society (MHAS) in New Zealand has applied to register a certification trade mark for MANUKA HONEY, which would limit the use of the term ‘Mānuka Honey’ in New Zealand to strictly New Zealand-based products.
If MHAS’s trade mark application is successful in New Zealand, it will have little impact on the New Zealand market as almost all honey is produced domestically. However, MHAS also wants to register MANUKA HONEY in Australia, the US, UK, EU and China.
Australian honey producers oppose the registration of this trade mark. They argue that there is no scientific difference between the New Zealand mānuka tree and the Australian tea tree, so the name mānuka cannot be limited to New Zealand honey. If MHAS’s international trade mark applications are successful, Australian honey producers would be barred from using the term ‘Mānuka Honey’ in relation to their honey in the respective countries.
Intellectual property can be
vital to your business. This dispute highlights the importance of identifying
the IP in your business and making sure it’s protected.
 Commerce Commission v Home Direct Ltd  NZHC 2943.
 Chief Executive of the Department of Internal Affairs v NZ Trustees Association Charitable Trust  NZHC 2684.
 Re Mānuka Honey Appellation Society Inc  NZIPOTM 7.
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