Upcoming Changes to Commercial Legislation
The Contract and Commercial Law Act 2017 (Act) was passed recently to consolidate and modernise New Zealand’s laws relating to contracts and sales. With the Act coming into force next month, it is a timely opportunity for you to review your contracts to ensure that they will be up-to-date.
What does the Act do?
The Act repeals a suite of existing commercial statutes and consolidates the provisions of those statutes within the Act. The Act replaces the following statutes:
- Carriage of Goods Act 1979;
- Contracts (Privity) Act 1982;
- Contractual Mistakes Act 1977;
- Contractual Remedies Act 1979;
- Electronic Transactions Act 2002;
- Frustrated Contracts Act 1944;
- Illegal Contracts Act 1970;
- Mercantile Law Act 1908 (other than Part 5);
- Minors’ Contracts Act 1969;
- Sale of Goods Act 1908; and
- Sale of Goods (United Nations Convention) Act 1994.
What changes will the Act make to the original legislation?
The Act does not generally change the substance of the law. However, the legislation has been updated to modernise the language and make it easier to understand. In addition, several minor changes have been made to the legal effect of certain provisions in order to clarify Parliament’s intent or reconcile inconsistencies.
How will the Act affect contracts?
The modernised language of the Act’s provisions will apply to contracts entered into prior to 1 September 2017. However, the minor substantive changes in law will not apply to these contracts. The law contained in the original statutes will apply to these contracts.
The Act will apply in full to contracts entered into on or after 1 September 2017.
What should you do next?
This is a good opportunity to check whether your standard form contracts refer to any of the statutes that are being replaced. If they do, then they may need to be amended to refer to the relevant part of the Act. The most common references to legislation that are likely to need to be updated are those relating to privity of contract, electronic transactions and the carriage of goods.
To future proof your standard form contracts, we suggest that you review them to ensure that they include suitable interpretation provisions to the effect that references to laws are interpreted to stay current with legislative changes.
Please contact us if you have any questions on the Act or if you need assistance reviewing your contracts in light of the Act.