Contractual Mistakes Act 1977

• Jurisdiction: New Zealand
• Citation: 1977 No 54
• Reference: 1977 No 54
• Record Number: DLM443633
• Act Number: 54
• Type of Document: Act

Contenidos

• Contractual Mistakes Act 1977
• Preamble
• Contents
• 1 Short Title
• 2 Interpretation
• 3 Act to bind the Crown
• 4 Purpose of Act
• 5 Act to be a Code
• 6 Relief may be granted where mistake by one party is known to opposing party or is common or mutual
• 7 Nature of relief
• 8 Rights of third persons not affected
• 9 Jurisdiction of District Courts
• 10 Jurisdiction of Disputes Tribunals
• 11 Amendment to Arbitration Act 1908
• 11A Act does not apply to contracts governed by foreign law
• 12 Application of Act
• 1 General
• 2 Legal status
• 3 Editorial and format changes
• 4 Amendments incorporated in this reprint

Contractual Mistakes Act 1977

Changes authorised by subpart 2 of Part 2 of the Legislation Act 2012 have been made in this official reprint.

Note 4 at the end of this reprint provides a list of the amendments incorporated.

This Act is administered by the Ministry of Justice.

Preamble

An Act to reform the law relating to the effect of mistakes on contracts

Contents

1 Short Title

This Act may be cited as the Contractual Mistakes Act 1977.

2 Interpretation

In this Act, unless the context otherwise requires,—

court means, in relation to any matter, the court, tribunal, or arbitral tribunal by or before which the matter falls to be determined

mistake means a mistake, whether of law or of fact.

For the purposes of this Act, and without limiting the meaning of the term mistake of law, but subject to section 6(2)(a), a mistake in the interpretation of a document is a mistake of law.

There is a contract for the purposes of this Act where a contract would have come into existence but for circumstances of the kind described in section 6(1)(a).

Section 2(1) court: substituted, on 19 December 2002, by section 3 of the Contractual Mistakes Amendment Act 2002 (2002 No 78).

3 Act to bind the Crown

This Act shall bind the Crown.

4 Purpose of Act

The purpose of this Act is to mitigate the arbitrary effects of mistakes on contracts by conferring on courts appropriate powers to grant relief in the circumstances mentioned in section 6.

These powers are in addition to and not in substitution for existing powers to grant relief in respect of matters other than mistakes and are not to be exercised in such a way as to prejudice the general security of contractual relationships.

Section 4(1): amended, on 19 December 2002, by section 4 of the Contractual Mistakes Amendment Act 2002 (2002 No 78).

5 Act to be a Code

Except as otherwise expressly provided in this Act, this Act shall have effect in place of the rules of the common law and of equity governing the circumstances in which relief may be granted, on the grounds of mistake, to a party to a contract or to a person claiming through or under any such party.

Nothing in this Act shall affect—

1. the doctrine of non est factum:

2. the law relating to the rectification of contracts:

3. the law relating to undue influence, fraud, breach of fiduciary duty, or misrepresentation, whether fraudulent or innocent:

4. the provisions of the Illegal Contracts Act 1970 or of sections 74A and 74B of the Property Law Act 2007:

5. the Frustrated Contracts Act 1944.

Nothing in this Act shall deprive a court of the power to exercise its discretion to withhold a decree of specific performance in any case.

Section 5(2) (d): amended, on 1 March 2017, by section 7(2) of the Property Law Amendment Act 2016 (2016 No 66).

Section 5(3): amended, on 19 December 2002, by section 5(a) of the Contractual Mistakes Amendment Act 2002 (2002 No 78).

Section 5(3): amended, on 19 December 2002, by section 5(b) of the Contractual Mistakes Amendment Act 2002 (2002 No 78).

6 Relief may be granted where mistake by one party is known to opposing party or is common or mutual

A court may in the course of any proceedings or on application made for the purpose grant relief under section 7 to any party to a contract—

if in entering into that contract—

1. that party was influenced in his decision to enter into the contract by a mistake that was material to him, and the existence of the mistake was known to the other party or 1 or more of the other parties to the contract (not being a party or parties having substantially the same interest under the contract as the party seeking relief); or

2. all the parties to the contract were influenced in their respective decisions to enter into the contract by the same mistake; or

3. that party and at least 1 other party (not being a party having substantially the same interest under the contract as the party seeking relief) were each influenced in their respective decisions to enter into the contract by a different mistake about the same matter of fact or of law; and

the mistake or mistakes, as the case may be, resulted at the time of the contract—

1. in a substantially unequal exchange of values; or

2. in the conferment of a benefit, or in the imposition or inclusion of an obligation, which was, in all the circumstances, a benefit or obligation substantially disproportionate to the consideration therefor; and

3. where the contract expressly or by implication makes provision for the risk of mistakes, the party seeking relief or the party through or under whom relief is sought, as the case may require, is not obliged by a term of the contract to assume the risk that his belief about the matter in question might be mistaken.

For the purposes of an application for relief under section 7 in respect of any contract,—

1. a mistake, in relation to that contract, does not include a mistake in its interpretation:

2. the decision of a party to that contract to enter into it is not made under the influence of a mistake if, before he enters into it and at a time when he can elect not to enter into it, he becomes aware of the mistake but elects to enter into the contract notwithstanding the mistake.

7 Nature of relief

Where by virtue of the provisions of section 6 the court has power to grant relief to a party to a contract, it may grant relief not only to that party but also to any person claiming through or under that party.

The extent to which the party seeking relief, or the party through or under whom relief is sought, as the case may require, caused the mistake shall be one of the considerations to be taken into account by the court in deciding whether to grant relief under this section.

The court shall have a discretion to make such order as it thinks just and in particular, but not in limitation, it may do 1 or more of the following things:

1. declare the contract to be valid and subsisting in whole or in part or for any particular purpose:

2. cancel the contract:

3. grant...