---
name: nz-trading-terms
description: >
  Use when drafting or reviewing New Zealand terms of trade, terms and
  conditions, sales terms, or any consumer- or trader-facing wording that
  touches misleading claims, unsubstantiated claims, unfair contract terms,
  product or service guarantees, pricing, cancellation rights, or
  competition law. Checks wording against the Fair Trading Act 1986,
  Consumer Guarantees Act 1993 and Commerce Act 1986, clause by clause, with
  a section citation for every flagged issue. Do not use for general
  contract formation wording with no trading or consumer element
  (nz-contract-drafting) or privacy and data clauses (nz-privacy-compliance).
---

# NZ Trading Terms

Stance: the Fair Trading Act 1986 applies regardless of intent and regardless of what a disclaimer says, so this skill checks the actual effect of the wording on a reasonable consumer or trading counterparty, not just its literal words. Every flagged issue names a section; this skill does not soften a genuine Fair Trading Act risk to make a client's preferred wording work.

## Hard rules

- Verify every section number against [citation-and-verification.md](../nz-legal-specialist/references/citation-and-verification.md) before writing it into a finding.
- Intent is irrelevant to Fair Trading Act 1986 misleading conduct provisions (s 9, s 10, s 11, s 13). Mechanism: never accept "but we didn't mean to mislead" as a defence when assessing wording; assess how a reasonable person in the audience would read it, including the overall impression created by images, layout and omissions, not just literal accuracy. Reason: this is the actual legal test, and advising otherwise would be wrong.
- Check every "we are not liable for..." or "no guarantee is given that..." clause against [../nz-legal-specialist/references/contracting-out-limits.md](../nz-legal-specialist/references/contracting-out-limits.md) before accepting it, specifically CGA s 43 (contracting out only for business-acquired goods/services, in writing, fair and reasonable) and FTA s 5C/5D.
- Flag a standard-form consumer or specified trade contract term as a potential unfair contract term risk (FTA ss 26A, 26B, 46H-46M) if it creates a significant imbalance in the parties' rights and obligations, is not reasonably necessary to protect the legitimate interests of the party advantaged by it, and would cause detriment if relied on, per s 46L and the examples in s 46M. Mechanism: check [fair-trading-act.md](references/fair-trading-act.md) for the full test and examples before flagging. Reason: an unfair term is not unenforceable automatically; it requires a Commerce Commission application and District Court declaration, so state that process accurately rather than implying the term is automatically void.
- Never draft wording that would constitute bait advertising (s 19), referral selling (s 20), pyramid selling (s 24), or demanding payment without intending to supply (s 21); these are offence provisions, not just civil risk, and this skill declines to help word around them.
- State plainly whether the counterparty is a "consumer" (acquiring for personal, domestic or household use) or "in trade", since this changes which Consumer Guarantees Act and Fair Trading Act protections apply and whether contracting out is possible at all.
- Act only on what the user asked. Before answering or changing anything, open the relevant files and check what is already done; report only what you checked, never guess, and do not redo finished work. Reason: guesses and repeated work waste the user's credit.

## Gate

| Situation | Action |
|---|---|
| Drafting new terms of trade or T&Cs | Draft clause by clause, citing the section supporting mandatory content (cancellation rights, guarantee wording) and flagging any clause that risks being an unfair contract term |
| Reviewing existing terms | Check each clause against misleading conduct, unsubstantiated claims, unfair terms, and guarantee exclusion rules |
| Business-to-business contract with no consumer element | Confirm CGA largely does not apply (goods/services for business use); FTA misleading conduct and unfair trade-contract-term provisions can still apply |
| Clause claims a benefit, result, or comparison | Check it against the unsubstantiated representations test (s 12A): did the trader have reasonable grounds for the claim at the time it was made? |
| Pricing clause allows unilateral price changes after order | Flag for review against misleading conduct and unfair contract terms risk; propose clear notice and consent wording |

## Steps

1. **Classify the audience.** Consumer, business-in-trade, or both, for each clause; this drives which Act's provisions apply.
2. **Check representations.** Every factual claim, comparison, guarantee or endorsement against misleading conduct (s 9-s 14) and unsubstantiated representations (s 12A) in [fair-trading-act.md](references/fair-trading-act.md).
3. **Check guarantee and remedy wording** against the Consumer Guarantees Act 1993 guarantees in [consumer-guarantees-act.md](references/consumer-guarantees-act.md): acceptable quality, fitness for purpose, description, price, time of completion, and the consumer's redress options.
4. **Check contracting-out and disclaimer clauses** against [../nz-legal-specialist/references/contracting-out-limits.md](../nz-legal-specialist/references/contracting-out-limits.md).
5. **Check standard-form terms for unfair contract term risk** using the s 46L test in [fair-trading-act.md](references/fair-trading-act.md).
6. **Check competition-sensitive clauses** (exclusivity, resale price terms, most-favoured-customer clauses) against [commerce-act.md](references/commerce-act.md) if the contract is between businesses with market power considerations.
7. **Report clause by clause**, each finding carrying its citation, and close with the not-legal-advice reminder.

## References

- [fair-trading-act.md](references/fair-trading-act.md): Fair Trading Act 1986 structure and the specific sections this skill checks against (misleading conduct, unsubstantiated claims, unfair practices, unfair contract terms, penalties).
- [consumer-guarantees-act.md](references/consumer-guarantees-act.md): Consumer Guarantees Act 1993 guarantees and remedies.
- [commerce-act.md](references/commerce-act.md): Commerce Act 1986 provisions relevant to trading terms (anti-competitive arrangements, misuse of market power, resale price maintenance).
- [../nz-legal-specialist/references/contracting-out-limits.md](../nz-legal-specialist/references/contracting-out-limits.md): statutory rights that cannot be excluded.

## Next

- General contract formation wording: [nz-contract-drafting](../nz-contract-drafting/SKILL.md)
- Privacy clauses (e.g. how customer data from a sale is used): [nz-privacy-compliance](../nz-privacy-compliance/SKILL.md)
- Back to [nz-legal-specialist](../nz-legal-specialist/SKILL.md)