With the Contract and Commercial Law Act 2017 coming into force on 1 September 2017, you should review your standard form business contracts to ensure they will be up-to-date.

Rather than providing substantive new law, this new legislation consolidates and simplifies 11 current pieces of commercial legislation into one single and more accessible ‘modern statute.’ Although the Act doesn’t significantly amend the substance of the current law, business owners should ensure their contracts are current and don’t refer to any of the replaced legislation from 1 September 2017 onwards.

What is changing?

The new legislation replaces and consolidates:

  • Sale of Goods Act 1908
  • 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, and
  • Sale of Goods (United Nations Convention) Act 1994.

Many of statutes being repealed influence the day-to-day operations of New Zealand business - in particular, the Sale of Goods Act 1908 (which regulates the sale of goods where the Consumer Guarantees Act 1993 doesn’t apply) and the Carriage of Goods Act 1979 (which impacts all businesses that ship goods in New Zealand).

How is the Act different to original statutes being replaced?

The provisions of the new legislation are very similar to the statutes being replaced. However, in some sections the language has been clarified, and there have a handful of minor changes to the legal effect of certain provisions where there were inconsistencies in the law.

Will the Act apply to all my existing contracts?

Yes and no. Where only the language has been clarified (without changing the legal effect of the provision) the provisions of the Act will apply to all existing contracts.

However, there are some minor provisions which do change the law. These will only apply to contracts entered into after 1 September 2017.

The new Act will apply in full to all contracts entered into after 1 September 2017.

What do you need to do?

You should check if any of your standard form contracts refer to any of the replaced statutes (see the list above).

If they do, your contracts should be amended to refer to the new Act so that, from 1 September, they refer to the correct legislation. If you don't take this step, you may lose some of the important protections your contracts currently provide you.

You should also ensure you have interpretation provisions in your contracts. These will help future-proof your documents by ensuring that any references to legislation automatically extend to any new legislation that replaces the existing legislation.

To ensure you have the full protection of the law from 1 September onwards, the Act should be correctly referenced in your contracts.

If you need guidance to review and amend your contracts in light of the changes the Act will bring, feel free to contact me on 09 486 8382 or jeremyj@simpsonwestern.co.nz, or any of our business team. 

This is also an opportune time for you to undertake a general review of all your standard form contracts; again the Simpson Western business team are happy to help with this and protect you and your business.


Disclaimer: All the information published in Your Savvy Lawyer articles is true and accurate to the best of the author’s knowledge. It should not be substituted for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are the views of the authors individually and do not necessarily reflect the view of this firm.