Can B2B Sales Claims Be Misleading In New Zealand?

Yes, B2B sales claims can be misleading in New Zealand. The Fair Trading Act 1986 doesn't only protect consumers buying everyday goods. It also applies to many business to business sales made in trade.

That means your sales pitch, proposal, website, brochure, quote, product demo, LinkedIn post or follow up email can raise Fair Trading Act issues if it gives another business the wrong impression. You don't need to intend to mislead someone. If the overall impression is misleading or deceptive, or is likely to mislead or deceive, that can be enough.

For small businesses, this matters in two directions. You need to make sure your own claims are accurate and supported, and you should also know what to look out for when another supplier is selling to you.

How The Fair Trading Act Applies To B2B Sales

The Fair Trading Act prohibits misleading or deceptive conduct in trade. It also prohibits specific false or misleading representations about goods, services, prices, sponsorship, approvals, benefits, performance and other important sales matters.

The key phrase is in trade. If you're making claims as part of your business, trade or profession, the Act can apply. This includes sales to consumers and sales to other businesses.

For example, the Act can apply when you are:

• selling software to another business;
• pitching marketing, IT, consulting, recruitment or design services;
• supplying wholesale products to retailers;
• leasing equipment or selling business assets;
• promoting franchise, distribution or reseller opportunities;
• making claims about delivery dates, stock levels, certifications or compliance; or
• publishing case studies, testimonials or comparison claims to win business customers.

A common misconception is that business buyers are expected to look after themselves, so sales claims to them can be more relaxed. It's true that the context matters. A large commercial customer with specialist advisers may read a statement differently from a member of the public. But that doesn't give businesses permission to exaggerate in a way that creates a misleading impression.

What Counts As Misleading Or Deceptive Conduct?

Misleading or deceptive conduct is about the overall impression created. A statement can be literally true but still misleading if important context is missing, if the claim is only true in limited circumstances, or if the sales material directs attention away from a key limitation.

For example, saying a platform can reduce admin time by 50 percent might be misleading if that result only applied to one trial customer with a very specific setup. Saying goods are available for immediate dispatch might be misleading if you know you're waiting on a supplier and can't fulfil most orders quickly.

Misleading conduct can happen through words, images, design, silence or conduct. It can also happen during a conversation. If your salesperson makes a confident verbal promise that doesn't match the written proposal, the verbal statement can still matter.

You should also be careful with half truths. If you say your product is certified, approved, compatible or compliant, the business customer may reasonably assume the certification is current, relevant to the product being sold, and issued by a credible body. If any of those things aren't true, the claim should be clarified.

Importantly, intention isn't the main question. A genuine mistake can still mislead. That's why good processes, records and sales training are so important.

Common B2B Sales Claims That Can Cause Problems

Most issues arise from ordinary sales language that has become too broad, too confident or too vague. Here are some common examples.

Performance claims. Claims such as faster, stronger, more secure, reduces costs, improves conversion, increases productivity or saves 10 hours per week should be based on evidence. If the claim depends on customer behaviour, system integration, staff training or other assumptions, say so clearly.

Price and savings claims. Be careful with statements like best price, 30 percent cheaper, no hidden costs or save thousands. You should be able to show how you calculated the comparison and what costs are included or excluded. If onboarding, add ons, minimum spend or cancellation fees apply, don't leave them in the fine print only.

Availability and delivery claims. If you say stock is available, delivery is guaranteed, installation will happen next week or a consultant can start immediately, make sure that's realistic. Supply chain uncertainty or contractor availability should be built into the way you communicate timeframes.

Exclusivity and territory claims. Statements such as exclusive supplier, preferred partner, sole distributor or protected territory can be significant in B2B deals. If exclusivity is limited by product line, region, time period or customer segment, spell that out.

Compliance and accreditation claims. Businesses often rely on claims about standards, licensing, health and safety, privacy, cybersecurity, building compliance, food safety, environmental compliance or industry accreditation. These claims should be current and specific. If a standard applies only to part of your product or one location, don't present it as applying to everything you sell.

Client logos, testimonials and case studies. Using a client's logo or success story can imply they endorse you, still use you, or achieved the results you describe. Get permission, keep the story accurate, and avoid suggesting results are typical if they're not.

Comparison claims. Claims like New Zealand's leading provider, number one, best in class or superior to competitors can be risky if they're presented as factual. If you can't support the claim, consider using more specific and provable language.

Environmental and sustainability claims. Green claims are a growing risk area. Terms like eco friendly, carbon neutral, recyclable, sustainable, plastic free or ethically sourced should be backed by reliable evidence and clear qualifications. If only packaging is recyclable, don't imply the whole product is.

Substantiation Requirements: Have Your Evidence Ready

New Zealand law also has substantiation requirements. In simple terms, if you make a claim in trade that a reasonable person would expect to be backed up, you need to have reasonable grounds for it at the time you make it.

This is important because a claim can be a problem even if it later turns out to be true. The issue is whether you had proper support for the claim when it was made. The stronger and more specific the claim, the stronger your evidence should usually be.

For B2B sales, substantiation may include:

• test results, technical reports or independent assessments;
• customer data, case study records and before and after measurements;
• supplier confirmations and product specifications;
• current certificates, licences and audit reports;
• pricing records and comparison methodology;
• delivery performance data and capacity planning; and
• written assumptions that sit behind savings or return on investment calculations.

Puffery is different. A broad advertising phrase like we love helping businesses grow may not need the same kind of proof. But if you make a measurable or objective claim, such as our system cuts payroll processing time by 40 percent, you should be ready to show where that number came from.

A good practical step is to create a simple substantiation file for your key sales claims. This can be a folder that stores the source, date, owner and approval status of each claim. It doesn't need to be complicated. It just needs to make it easy for your team to know what they can safely say.

Can You Contract Out Of Fair Trading Act Rules In B2B Deals?

In some business to business situations, parties can agree in writing to contract out of certain Fair Trading Act provisions. This is usually only available where both parties are in trade and the contracting out is fair and reasonable.

However, this isn't a free pass to say anything in the sales process. Courts can look closely at whether the contracting out clause is fair and reasonable, taking into account matters such as the parties' bargaining power, whether legal advice was available, the value of the transaction and the circumstances of the deal.

Also, a clause buried in standard terms may not protect you if your sales team has made very clear claims that the buyer relied on, especially where the buyer had little real chance to negotiate. If you want to rely on a contracting out clause, it should be drafted carefully and used consistently with your sales process.

Even where contracting out is available, many businesses choose to treat it as a backstop rather than a sales strategy. Accurate claims, clear qualifications and good records are still the safer approach.

What Can Happen If A B2B Claim Is Misleading?

Misleading B2B sales claims can create several consequences. The Commerce Commission can investigate and take enforcement action. The Act also allows for penalties and other orders in appropriate cases. For serious breaches, companies can face significant fines, and individuals involved in the conduct can also be exposed.

There can also be commercial consequences. A customer may seek to cancel a contract, claim compensation, refuse to pay, demand corrective action or make a complaint. Even if the legal position is arguable, the dispute can take time, distract your team and damage trust.

For many small businesses, the biggest risk is reputational. B2B markets are often smaller than they feel. If customers believe your proposal overpromised and underdelivered, that can affect referrals, renewals and future negotiations.

The good news is that most problems are preventable. The aim isn't to make your sales materials dull. It's to make them accurate, clear and supportable, so customers understand what they're buying and you can deliver with confidence.

Practical Steps For New Zealand Businesses

If you sell to other businesses, start by reviewing the claims that appear most often in your sales journey. This includes your website, pitch decks, proposals, product pages, ads, scripts, pricing sheets, demos, contracts and email templates.

Here are some practical steps to reduce risk:

• List your key claims. Identify the statements customers are most likely to rely on, especially claims about price, performance, compliance, savings, timing and exclusivity.
• Check your evidence. Keep records that support each objective claim. If the evidence is old, narrow or based on assumptions, update the claim or qualify it.
• Use clear qualifications. If a result depends on certain conditions, explain those conditions close to the claim, not hidden at the end of a document.
• Align sales and contracts. Your proposal, demo and contract shouldn't tell different stories. If something is subject to the contract, say that clearly during the sales process.
• Train your team. Sales staff should know which claims are approved, which claims need care, and when to ask for legal or management input.
• Review supplier claims before repeating them. If you pass on claims from a manufacturer, platform provider or distributor, make sure you have a reasonable basis for doing so.
• Correct issues quickly. If you discover a claim is wrong or out of date, update the material, notify affected customers where appropriate and keep a record of the fix.

It also helps to build legal review into major campaigns or high value proposals. This is especially useful if you operate in a regulated industry, rely heavily on technical claims, use aggressive comparison advertising, or sell products where compliance and safety are central to the purchase decision.

Key Takeaways

• The Fair Trading Act 1986 can apply to B2B sales claims made in trade, not just consumer advertising.
• A claim can be misleading because of its overall impression, even if parts of it are technically true.
• Common risk areas include performance, pricing, delivery, compliance, exclusivity, testimonials, comparison claims and green claims.
• If you make factual claims that customers would expect to be substantiated, you should have reasonable grounds before making them.
• Written B2B terms may sometimes contract out of certain rules, but only in limited circumstances and not as a substitute for accurate sales conduct.
• Good claim records, staff training and clear qualifications can help prevent disputes and protect customer trust.

If you'd like help with reviewing your B2B sales claims, strengthening your customer contracts, checking your substantiation records or handling a Fair Trading Act concern, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.