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Definition of Fair Trading Act Terms

There are a number of terms used in the Fair Trading Act, and throughout this publication, which have been defined by both the Act and case law to have certain meanings, as discussed below:

Deceive
This means ‘to cause to believe what is false, to mislead as to a matter of fact, to lead into error; to delude, take in’.

False
This means ‘contrary to fact’ and has been defined judicially to mean ‘incorrect’.  Making a false representation is likely to breach the Act even if a business incorrectly believed the representation to be true.

In trade
This term has a broad meaning, and covers all commercial activities.  Few undertakings, except ‘one-off’ private transactions, escape the jurisdiction of the Act.

Mislead
This means ‘to lead astray in action or conduct; to lead into error; to cause to err’.  A representation may be literally true but misleading, for example, ‘This product has been tested to the New Zealand Standard’ implies the product passed the test.  Even if the product was tested, this would be a misleading representation if the product had failed the test.

Price
The Act has a very broad definition of ‘price’.  It includes not only the price charged by a business but also any deals which in some way affect the final price a buyer pays for goods or services.  Cases alleging false or misleading pricing representations have dealt with a wide variety of subjects including misleading claims regarding savings or extent of price reductions, non-disclosure of hidden charges, reasons for price increases or decreases and advertised prices varying from till prices.

Representations
A representation is any factual statement made about a product or service, either orally or in writing.  A representation may also be an impression given by pictures, advertisements, promotional material or a sales pitch, by general conduct, including by keeping silent when critical information should be given.  Representations can be made in:

  • TV, radio, newspaper and other advertisements;
  • brochures and flyers;
  • point-of-sale and other display material;
  • mail drops;
  • sales pitches;
  • websites and emails; 
  • specifications and product descriptions; and
  • warranties and contracts.


 

 
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