Businesses are being urged to pay close attention to a broad set of consumer protections and contract law that come into effect tomorrow, along with hefty fines.

An amendment to the Fair Trading Act offers new protections against unfair conduct and unfair business-to-business contract terms, including unconscionable conduct.

Bell Gully senior associate Richard Massey says the act does not define the meaning of "unconscionable," leaving it up to judges to decide as cases are brought before the courts.

"I think the intent of the legislation is to exclude oppression and the worst types of conduct and that was obviously the intention when you read the background materials to the legislation," says Massey.

"The difficulty of course is understanding it and making sure that it is limited to that type of conduct and that it doesn't become a situation where many businesses are exposed to lots of different claims for just reasonable commercial conduct."

In the meantime, he says traders need to err on the side of caution.

"There's a lot of new laws that businesses are having to grapple with, particularly in the consumer protection space.

"And so I think it's important for businesses just not to lose sight of this new prohibition in the sort of landscape of other changes that they're having to deal with."

Traders that engage in unconscionable conduct can be fined up to $600,000 for a business and $200,000 for an individual.

-RNZ.