Our commitment to you
16 August 2022
UDC Finance takes great pride in helping New Zealanders grow by providing them with the funds they need for vehicles, plant and equipment and machinery. It is important to us that we do this in a fair and reasonable way.
In the near term we will be reviewing many of our contracts to see how we can make them easier to understand and more favourable to our customers.
In the meantime, we’d like to make some commitments to you around how we’ll exercise some of our rights and discretions under some types of contracts that we have entered into with you. When we refer to ‘we’, ‘us’, or ‘our’ in this commitment, we are referring to UDC Finance Limited.
This commitment applies if the contract is a “standard form small trade contract” for the purposes of the Fair Trading Act 1986. This means it will not apply if:
- the contract was subject to effective negotiation between you and us;
- you are a business customer and the total amount of consideration payable to us in any annual period under the contract is $250,000 or more (this includes consideration payable under the contract as well as any other contract with us on the same or substantially similar terms); or
- the contract was entered into before 16 August 2022 and has not been varied or renewed since that date.
If we need to enforce our rights under any guarantees or security agreements given to us to secure a standard form small trade contract, we’ll exercise our rights under those agreements in a way that is consistent with our commitments described below.
This commitment describes how we’ll exercise some of our rights and discretions in relation to these types of contracts.
We will act fairly and reasonably
When we do anything under a contract that this commitment applies to, including where you ask us to do something, we will act fairly and reasonably. We will do this having regard to your and our respective business interests and the circumstances at the time. We will also act in accordance with our obligations under various laws which we take very seriously.
Verbal Agreements
We won’t rely on or enforce any clause that says the written contract represents the entire agreement between you and us. This means that things we separately agree with you, whether in writing or verbally, can form part of our contract where it is clear that we intended them to form part of the contract.
Determinations
If we or anyone on our behalf certifies information or makes determinations around certain things, facts or amounts being correct under the contract you can challenge this if you think it is wrong.
Contract changes
We will limit our reliance on clauses in our contracts with you that permit us to make changes to your contract without your agreement. We will only rely on unilateral variation clauses in our contracts with you where the change:
- relates to how we calculate any payment or the amount, frequency or due date of any payments or interest charges
- relates to how we calculate any fee or the amount, frequency or payment date of any fee. This includes adding or removing any fee. For example, we may change a fee or introduce a new fee due to increases in our costs, regulatory change or changes in market conditions
- is minor or is to correct an error
- is required to meet our obligations under any law or regulation
- is to provide service enhancements
- is required as a result of changes to our business processes
- will not be materially adverse for you.
We will only make changes to our contract with you if the law allows us to.
We will generally give you at least 30 days’ notice of any change we make. If we change a fee or a charge, we will give at least 14 days’ notice of any change. If the change is in your favour, or if the change is so we can comply with the law, we may give you a shorter notice period.
Default
Some of our contracts with you may contain events of default. Events of default may be called something else in our contract with you. When we talk about events of default, we mean the events or circumstances listed in your contract which permit us to terminate our contract with you, repossess and sell the goods the contract relates to and/or require repayment of your loan or take other enforcement action.
We will change how we treat events of default.
Where a fundamental event of default that appears in your contract has occurred, we can immediately exercise our powers in accordance with the contract. A fundamental event of default is the most serious type of event of default.
In addition to fundamental events of default, there will be other events of default specified in your contract. If one of these other events of default can be remedied, we will give you 20 business days to remedy it before we treat it as an event of default. We will only rely on these other events of default which are not fundamental events of default where they materially increase our risk.
The following are fundamental events of default that may be in your contract:
- any goods, asset or other item that we have financed or that is specifically described in any security agreements that secures our contract with you becomes ‘at risk’. When we talk about ‘at risk’ this has the meaning in section 109(2) of the Personal Property Securities Act 1999
- any insolvency related event of default
- payment default (we will give you three business days to remedy the payment before we treat this as an event of default)
- it becomes illegal for us to do what we have agreed to do under a contract. This includes where it is illegal as a result of any sanctions or Anti-Money laundering legislation.
General Indemnities
We will not rely on clauses that are expressed as indemnities to claim losses if the claim arises as a result of us, our officers or employees or the agents we appoint doing any of the following:
- acting dishonestly
- engaging in wilful misconduct
- being grossly negligent.
We will only rely on clauses expressed as indemnities to claim direct losses that we incur as a result of the claim.