Stories by Rae Nield

When things get out of control

In every older contract we used to see an exclusion of liability for losses caused by "acts of God". The rationale, of course, was that neither party could control certain events, so each party should carry its own insurance against losses caused by them. Of course, not all of these events are caused by weather, earthquakes and the like. Some are caused by shipping delays, other people's strikes and other causes outside the parties' control. The French term "force majeure" is used internationally to describe these events beyond the control of the parties, French having been the "lingua franca" of international law for many centuries.

Filling in forms

We’ve had a few interesting events over the last few weeks, some with potential legal fallout. First, we had the Census. It is compulsory to fill in your census form: you can be prosecuted and fined up to $500 (individual) if you don’t. During the build-up, I found it interesting that the government statistician emphasised the significance of the census data in assessing social needs and thus guiding health and welfare policy. This is of course correct. But how many of us have used census data in marketing? It’s a goldmine of data if you need to assess how well you are doing in targeting a local market, with age group breakdowns etc. For the first time I filled it in online. The form was completed in 12 minutes total. Brilliant.

Contracting by raised eyebrow

One of the things visitors often notice about Aucklanders is that we raise our eyebrows in greeting when we meet each other. I always put it down to the Polynesian influence – this is a standard greeting technique, and it’s catching. I’ve been doing it all my life, and maybe people do it elsewhere in New Zealand, but I’m not qualified to comment on that.

Liquidation redux: security against customer default

Last month I wrote about the importance of making sure that your terms of trade with your customers include a security interest enforceable over the goods you have supplied to your customers, and that you have registered a financing statement describing that security interest on the Personal Property Securities Register (PPSR).

But what about us?

I've been writing a lot about law reform recently, because so much is going on that will affect resellers.

Oldies but goodies

Well, summer is over. In the last column I wrote about the Consumer Law Reform Bill – an enormous document which mostly updates our consumer law. Submissions have now closed and I have had my say on the vexed issue of substantiation notices. It’s not all bad though. The rather useless Unsolicited Goods and Services Act is being updated so that all the responsibility is on the seller who dumped the goods onto the consumer. And the Door to Door Sales Act will be updated to take into account those smart traders who phone for an appointment (so under the existing Act the trader would be “invited” and the Act would not apply).

Automated misleading conduct

Don’t we take our technology for granted? This morning I heard some stunning news with significant consequences – and not just a lawyer would be stunned. The Australian Federal Court has unanimously upheld an appeal by the Australian Competition and Consumer Commission (ACCC – equivalent to our Commerce Commission) that Google had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive. How? By publishing four specific paid ads on the Google Australia website result page. Naturally, I used Google to find out more.

How the Consumer Law Reform Bill can affect you

Warning: the contents of this column may be dangerous to your health. I’m currently working through submissions on the Consumer Law Reform Bill (which are due by March 29). Now, in January I mentioned that this was in the offing. It’s now open for submissions to the Commerce Select Committee. And, to be fair, it’s mostly pretty good, including a lot of updating of existing law to address changing times and changing technology. For example, in a move supported by Trade Me, internet “auction” sales of goods by traders to consumers will be subject to some or all the Consumer Guarantees Act guarantees. That plugs a loophole that will have created a sore point with many of you who have online or bricks and mortar stores.

The passion of salesmanship

During the summer holiday I had few opportunities to indulge in retail therapy, as I understand it. I work in the retail goods and services supply chain, and that makes me somewhat of a retail junkie. I don't buy a lot, but I do like to go into shops, observe, and reflect upon what makes up the characteristics of really good retailing. Typically, the best small retailers are usually found in small towns. That's not surprising because in small towns you shoot yourself in the foot if you don’t give customers what they reasonably expect when they buy goods or services. And anyway, the feedback is quite direct - you're likely to have your neighbour’s auntie bringing back the shirt that shrank on first wash. Elsewhere, consumers these days usually have little direct contact with retailers – or rather, with the people who make the decisions. Good retailers set the standards that are reflected in our consumer law. The Fair Trading Act was passed only in 1986, the Consumer Guarantees Act in 1993. Both of these Acts are directed towards customer expectations: the Consumer Guarantees Act gives consumers remedies when goods and services are not the quality a reasonable consumer would expect, and the Fair Trading Act creates offences and gives remedies where consumers are misled. I was reminded of this when I followed my husband into his favourite menswear store – Haddad’s in Otorohanga, run by the remarkable brothers Karam and John Haddad. If you want a lesson in salesmanship, I recommend you spend 20 minutes in the store (tell them I sent you) just watching a couple of expert salesmen giving customers superb service. It’s not a pretty store – a ton of stock crammed into a main-street barn-like building – but it certainly is lively. As I watched, several truths universal to good salesmanship became evident. First, greet your customers in a purposeful manner. Ask if they are looking for anything in particular. If they say they’re just looking, point them towards a corner of the store they might like (now this one takes a bit of experience at assessing what they might like from what they are wearing – longhand for “know your customers”). And give them time. If they are looking for something in particular, ask questions so you can find the right item. This means “know your stock” – and what it will and (more importantly) won’t do for your customers. Karam’s special ability to assess customers’ size and fit is legendary. My husband needed jeans. “These will fit you” said Karam, after diving into a carton in the back of the shop. They did. John keeps things moving in the shop, dealing carefully with customers who need more time. They both know so much about men’s clothing that being there is an industry education in its own right, which leads to the next point – know the broader industry and the options it presents your customers. What happens if something doesn’t do what it should? “Bring it back” is the message. The availability of clear remedies increases customer confidence, and results in customers getting what they reasonably expect. And the brothers’ bottom line? “You have to have passion about what you do” says John. Unfortunately, they don’t sell much womenswear. I bought a really good fleece top there about 12 years ago (still going strong) but I drew the line at the current range of singlets printed with “Bush Babes – Protecting New Zealand’s assets”. Do visit – and don’t blame me if you come out with a few clothes – oh, and a hat. You’ll see what I mean. Rae Nield is a solicitor specializing in marketing law. This article is intended for general information, and should not be relied on as specific legal advice. You should consult a lawyer for advice relating to your own specific legal problems. Rae Nield can be contacted at raenield@marketinglaw.co.nz .

The TechnoCat and other tales

Well, by the time you read this the holidays will be almost a month behind us. I hope you enjoyed them and I certainly hope you have your strength back, perhaps in the context of the famous curse “may you live in interesting times”. Alas, Christmas is over for another 11 months. But there were some great presents, weren’t there? I decided to upgrade my cat Harriet’s IT skills with a virtual mouse using the Games for Cats app on my iPad. She wasn’t keen on the laser (at time of writing I haven’t started using my iPhone to direct it) and the butterfly left her cold, But woohoo: that mouse. After her first half-hour effort she fell asleep exhausted, but the next morning demanded that I turn it on again and she now watches it whenever she can. What have I unleashed? Will she start texting me "Dinner NOW" the next time she wants to eat? On the legal front, consumer law reform is likely to strike again, with the Consumer Law Reform Bill expected to be rolled over into the new term of Parliament, together with reform to consumer credit law. Altogether, there are a number of provisions which will affect traders at all levels of the supply chain. The first shouldn’t be a problem if you are carefully providing safe merchandise. Proposals include an obligation to report unsafe products, and compulsory product recalls on safety grounds where the manufacturer or supplier has not carried out a voluntary recall. Product safety officers have very broad powers to issue a suspension of supply notice prohibiting the sale of a product pending a compulsory recall. But there is also a new proposed prohibition on unsubstantiated representations about goods or services where a person making them does not have reasonable grounds for the representation irrespective of whether or not the representation is in fact false or misleading. The Commerce Commission (and only the commission) can commence proceedings, applying for an order or an injunction to stop the goods being sold. Although there are a number of factors which a court would take into account in deciding whether you actually did have reasonable grounds for the representation, that is to some extent after the fact: it is for the court, not the commission, to make that decision on the facts of each case, and it’ll cost you a lot to get that far. So it is not at all clear (for example) how much homework a retailer, distributor or importer would have to do on each product (including branded products) before they can be said to have made representations based on reasonable grounds. It’s pretty scary as it is right now, and I expect we will have to make some careful submissions when the Bill goes out to Select Committee. That’s not all, folks. We also have in the pipeline an amendment to the Commerce Act which will criminalise cartel behaviour, in line with international best practice. It would mean that if you are personally involved in price-fixing, market allocation or similar activities, then instead of facing a $500,000 maximum penalty, if the bill goes through Parliament as drafted, you would face up to seven years in gaol. Happy days. The provisions are quite complex so we will wait and see, but some serious upskilling is likely necessary for all of you involved in business. Sounds like a fun time ahead. Rae Nield is a solicitor specializing in marketing law. This article is intended for general information, and should not be relied on as specific legal advice. You should consult a lawyer for advice relating to your own specific legal problems. Rae Nield can be contacted at raenield@marketinglaw.co.nz.

Too much information and the year to come

Just occasionally you see things which are so definitely not a Fair Trading Act breach that you rather wish the trader was a bit more circumspect. The phrase “too much information” sprang to mind last week when I was in one of those great new cafes which have popped up in old wooden houses in Christchurch as it recovers from the February 22 earthquake.

A frustrating time

I’ve been tearing my hair out with frustration recently. You see, there is a contract law doctrine called “frustration,” which is when a contract becomes impossible to perform or when the performance will be fundamentally different from that which was contracted for. Once it is frustrated, we have in New Zealand a Frustrated Contracts Act 1944 that sets out clearly who has to do what if anything. But first the contract has to be frustrated.

A safe, and prosperous, new year

If you had told me a few weeks ago that I would be in the dark, casting myself backwards off a cliff into blackness, with only a tyre inner tube for support, I wouldn’t have believed you. But there I was, courtesy of those in our office who organise the Christmas party – or in this case an expedition - as we went black water rafting at Waitomo. Fortunately, I did land in the water, the inner tube did not let itself or me down, and I floated away under the stern glare of some thousands of hopeful glow-worms. Actually they were maggots, as our guide pointed out. No Fair Trading Act breaches there.

Do you have a new year plan B?

Well, it’s nearly Christmas and I’m betting you are all looking forward to your holidays as much as I am. It’s been a long year, with significant serious events in the last few months. Those of you in Christchurch are still experiencing aftershocks, and some of you will still be trying to get your homes and businesses back in order. The Pike River mining disaster has reminded us that some jobs are inherently dangerous, and we can never take our workplaces for granted. It has also reminded me how small New Zealand is – even in a community like the West Coast which Aucklanders in particular might regard as isolated, many of us (including me) know families of the 29 miners who died. On the tech front it’s been an interesting year from the perspective of a mere customer. I read a great deal about cloud computing – interestingly, it took me ages to figure out what everyone was talking about because all of the articles seemed to assume that we mere potential customers knew what it was. So you shouldn’t be surprised at the reluctance of potential customers to enter it – with that introduction, how do we know that our concerns about security, availability and backup facilities (if the internet or network grinds to a halt) will be taken into account? Keep it simple, people. Just because you know all about it doesn’t mean your customers do. The speed of growth and development of the internet has tended to fool our sense of timing. Let’s look at it this way: the World Wide Web specifications were created by Tim Berners-Lee only 19 years ago – August 1991. Google and MSN were launched only 12 years ago – September 1998. We are so dependent on these facilities that it is quite scary. One of my tasks with young lawyers is to teach them how to use law text books. Books? What are they? Sorry chaps and chapesses, but when you are researching something from scratch, there is still nothing that beats a good fat book. Once you really know which direction you are heading for (as against – just think you know) then by all means use the online resources. Because if you start off in the wrong direction with a search engine query, you’ll stay in that direction – and you won’t ever find out what the right direction is, because online searches are deep but narrow. As you may have guessed I’ve always been a Plan B person (and sometimes Plan C and Plan D). So when I read about the internet fast running out of IP addresses and I don’t read about any coherent plan B, I do get worried about our reliance on it. What are the alternatives? How would your business cope if internet access was rationed, or worse, those with deep pockets paid megadollars to take priority? It might pay to think through some options. Those of you in Christchurch know just how easy it is for your world to be turned upside down even for a short while. Charles Dickens’ character Mr Micawber was always saying “something will turn up” at times like this. Our experience with the internet so far has been that things turn up that we never ever expected, and quickly. But just remember that it has only been 19 years since the internet became available. Have a happy Christmas and (if you are able) a great holiday. Perhaps sitting under a tree thinking of a plan B? Or was that Newton and the apples I was thinking of? Rae Nield is a solicitor specializing in marketing law. This article is intended for general information, and should not be relied on as specific legal advice. You should consult a lawyer for advice relating to your own specific legal problems. Rae Nield can be contacted at raenield@marketinglaw.co.nz.