The Contract and Commercial Law Act 2017 (CCLA) is the new kid on the block in New Zealand’s commercial law landscape. Passed earlier this month, the CCLA will come into force on 1 September 2017.
The CCLA is not intended to substantially amend the law, however, in-house practitioners should be aware that some key commercial statutes will be repealed and know how the CCLA’s transitional provisions will operate in respect of those repealed statutes. Organisations should also consider if their standard terms and conditions or other template contracts and documents need to be amended on or after 1 September 2017 to reflect the CCLA’s introduction.
What is the CCLA?
The CCLA will repeal a number of existing commercial statutes (the original statutes). The provisions of those original statues will then be consolidated within the CCLA. These original statues are the:
- 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.
How is the CCLA different to the original statutes?
The provisions in the CCLA substantially replicate those in the original statutes, except that:
- the language of some provisions has been modernised to make the provisions more accessible for businesses and users; and
- minor changes have been made to the legal effect of a small number of provisions in order to clarify Parliament's intent or reconcile inconsistencies.
How will the CCLA affect contracts entered into before 1 September 2017?
The modernised language of the CCLA provisions will apply to contracts entered into before 1 September 2017 (ie, (a) above).
The minor changes in legal effect (ie, (b) above) will not, however, apply to these contracts. Instead, the law as expressed in the original (albeit repealed) statute will apply.
The schedules to the CCLA will be helpful when considering the impact of the CCLA on existing contracts. In particular, Schedule 2 sets out which provisions have been subject to minor changes in legal effect and which, accordingly, will not apply to pre-1 September 2017 contracts.
What about contracts entered into on or after 1 September 2017?
The CCLA will apply in full.
What should organisations be doing now?
It may be useful for in-house practitioners to check now which of their organisation's standard terms and conditions or other template documents refer to any of the original statutes, so that updated versions can be prepared and signed-off in advance for use from 1 September 2017.
This may also be a good juncture to double check that template contracts and other documents include appropriate interpretation clauses that expressly state that references to applicable laws, and to specific statutes or regulations, should be construed to stay current with legislative changes (including any consolidations, amendments, re-enactments or replacements of those statutes or regulations).
Please contact us if you have any questions or if your team would like further training on any of the provisions of the CCLA – including the transitional provisions and/or a refresher on any of the original statutes. The full text of the CCLA can be found here.