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Lloyd's Maritime and Commercial Law Quarterly

THE NEW ZEALAND CONTRACT STATUTES

Francis Dawson*

The purpose of this article is to survey briefly the New Zealand statutes which have effected reforms in the law of contract in that jurisdiction, and to explore some of the complications that these statutory reforms leave in their wake for any general theory of the law of contract.
The reforms that are the subject matter of this paper began in 1969 with the passing of the Minors Contracts Act 1969. This was shortly followed by the Illegal Contracts Act 1970 and in turn by the Contractual Mistakes Act 1977, the Contractual Remedies Act 1979 and the Contracts (Privity) Act 1982. The distinctive feature of these statutes is that they are all relatively short documents and each in turn confers broad discretionary powers to award relief as the court thinks just having regard to the circumstances of the case. The breadth of the discretion conferred on the court may perhaps best be illustrated by pointing to a few examples. The Contractual Remedies Act 1979, which reforms the law on misrepresentation and breach by treating representations as terms and assimilating the remedies for misrepresentation to those for breach of contract, contains a provision stating that on the cancellation of a contract the court may
“direct any party … to do or refrain from doing in relation to any other party any act or thing as the Court thinks just”.
Likewise, the Contractual Mistakes Act 1977, which, as its title suggests, governs the law relating to mistakes, enacts in s. 7(3):
“the Court shall have a discretion to make such order as it thinks just and in particular, but not in limitation, it may do one or more of the following things:
  • (a) Declare the contract to be valid and subsisting in whole or in part or for any particular purpose:
  • (b) Cancel the contract:
  • (c) Grant relief by way of variation of the contract:
  • (d) Grant relief by way of restitution or compensation”.
Again, the Illegal Contracts Act 1970 provides that the court may grant to any party to an illegal contract (somewhat obscurely defined as meaning “any contract that is illegal at law or in equity”):
“such relief by way of restitution, compensation, variation of the contract, validation of the contract… or otherwise howsoever as the Court in its discretion thinks just”.
It is generally conceded in legal circles in New Zealand that these statutes were not intended to alter the general theory of the law of contract as it had hitherto been understood and applied at common law. As Sir Owen Dixon once observed, the common law has generally been true to its theory of simple contract and has regarded the fundamental question as being, what did the promisor really promise?1 The New

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