If you`re involved in any kind of business, whether as a vendor or a purchaser, you`re likely to be affected by the Contract and Commercial Law Act 2017. This act, which came into effect on September 1, 2017, has brought about significant changes in commercial law in New Zealand. In this article, we will summarize the key aspects of this act and what it means for businesses operating in New Zealand.
The Contract and Commercial Law Act 2017 was enacted with the aim of providing greater clarity and consistency in commercial law in New Zealand. The act consolidates several existing statutes related to commercial law, including the Sale of Goods Act 1908, the Contractual Mistakes Act 1977, and the Unfair Contract Terms Act 1975, among others.
One of the most significant changes brought about by the act is the introduction of new provisions that protect consumers and small businesses from unfair contract terms. These provisions apply to standard form contracts, which are contracts where one party provides a pre-formulated contract that the other party has little or no ability to negotiate. Under the new provisions, certain terms in standard form contracts are deemed to be unfair and are void. These include terms that are excessively one-sided, impose harsh penalties for breach, or limit the consumer`s or small business`s rights to seek legal remedies.
The act also introduces reforms to the law of damages. One notable change is the introduction of a requirement for parties to mitigate their losses where possible. This means that if a party suffers a loss as a result of a breach of contract, they are expected to take reasonable steps to minimize the loss. Failure to mitigate losses may result in a reduction in the amount of damages that can be recovered.
The act also includes provisions relating to electronic transactions, which bring New Zealand law in line with international standards. These provisions ensure that electronic signatures, electronic communications, and electronic records are given the same legal status as their paper equivalents.
Overall, the Contract and Commercial Law Act 2017 represents a significant reform of commercial law in New Zealand. It aims to provide greater clarity and consistency, and to protect consumers and small businesses from unfair contract terms. As a business owner or practitioner, it`s important to be aware of these changes and to ensure your contracts and business practices are compliant. Consulting with a legal professional experienced in commercial law may be helpful to ensure you are up to date with the changes made by this act.