NEW ZEALAND Law and Practice Contributed by: Christopher Young, MinterEllisonRuddWatts
This authorisation can apply to: • anti-competitive provisions (Sections 27 and 28 of the Commerce Act 1986); • cartel provisions (Section 30); • misuse of market power (Section 36); and • resale price maintenance (Sections 37 and 38). Once authorised, the provision or conduct subject to the authorisation is protected from legal action under the Commerce Act, both by the Commission and pri - vate individuals. The Commission may grant clearance for cartel provi - sions under the collaborative activity exception. Clear - ance will be given if the applicant can demonstrate that all criteria for the collaborative activity exception are met. This clearance regime is voluntary and there is no statutory requirement to seek clearance for the collaborative activity exception to apply. In August 2025, the Minister of Commerce and Con - sumer Affairs indicated that the review of the Com - merce Act being undertaken by the Ministry of Busi - ness, Innovation and Employment may propose “class exemptions” – for example, to allow the Commission to exempt categories of conduct that are low-risk or clearly beneficial. No details have yet been announced. 7. Choice of Governing Law 7.1 Possibility of a Franchisor Stipulating Non-Local Law The parties are free to select the governing law. It is important that the franchise agreement clearly identi - fies the governing law. 7.2 Local Law Requirements The parties are free to select the governing law. It is important that the franchise agreement clearly identi - fies the governing law. 7.3 Mandatory Content There is no mandatory content for franchise agree - ments under New Zealand law.
If a franchisor is a member of FANZ, they are required to comply with the FANZ Code, which stipulates that franchise agreements contain provisions requiring: • a cooling-off period of not less than seven days from the date of entry into the franchise agreement (or preliminary agreement, as the case may be), during which the franchisee may, by formal notice to the franchisor (or master franchisee/sub-fran - chisor, as the case may be), elect to withdraw from the agreement at their discretion; • that both the franchisor (and each master fran - chisee/sub-franchisor) and the franchisee use rea - sonable endeavours to comply with the provisions of the FANZ Code and rules; • that the franchisee comply with the laws of New Zealand, including all laws relating to employment, health and safety, fair trading and tax; and • that each franchisee use reasonable endeavours to clearly identify that the franchisee’s business is being operated under franchise from the franchisor, including in all written contracts entered into with customers of the franchisee. 7.4 Prohibited Provisions in Local Law There are no prohibited provisions specific to fran - chise agreements under New Zealand law. However, under New Zealand’s Fair Trading Act 1986, the use of unfair contract terms in certain types of contracts is prohibited. This includes “standard form” contracts where the expected annual value of the trading relationship is less than NZD250,000 (includ - ing goods and services tax) at the time the contract is formed. A term may be declared unfair by the court if it meets all three of the following criteria: • it creates a significant imbalance in the parties’ rights and obligations; • it is not reasonably necessary to protect the legiti - mate interests of the advantaged party; and • it would cause detriment (financial or otherwise) to a party if enforced or relied upon. In assessing fairness, New Zealand courts must con - sider the contract as a whole and the transparency
73 CHAMBERS.COM
Powered by FlippingBook