Contracts (Privity) Act 1982

Reprint
as at 1 January 2008

Coat of Arms of New Zealand

Contracts (Privity) Act 1982

Public Act1982 No 132
Date of assent16 December 1982
Commencementsee section 1(2)

Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This Act is administered by the Ministry of Justice.


An Act to permit a person who is not a party to a deed or contract to enforce a promise made in it for the benefit of that person

1 Short Title and commencement
  • (1) This Act may be cited as the Contracts (Privity) Act 1982.

    (2) This Act shall come into force on 1 April 1983.

2 Interpretation
  • In this Act, unless the context otherwise requires,—

    benefit includes—

    • (a) any advantage; and

    • (b) any immunity; and

    • (c) any limitation or other qualification of—

      • (i) an obligation to which a person (other than a party to the deed or contract) is or may be subject; or

      • (ii) a right to which a person (other than a party to the deed or contract) is or may be entitled; and

    • (d) any extension or other improvement of a right or rights to which a person (other than a party to the deed or contract) is or may be entitled

    beneficiary, in relation to a promise to which section 4 applies, means a person (other than the promisor or promisee) on whom the promise confers, or purports to confer, a benefit

    contract includes a contract made by deed or in writing, or orally, or partly in writing and partly orally or implied by law

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

    promisee, in relation to a promise to which section 4 applies, means a person who is both—

    • (a) a party to the deed or contract; and

    • (b) a person to whom the promise is made or given

    promisor, in relation to a promise to which section 4 applies, means a person who is both—

    • (a) a party to the deed or contract; and

    • (b) a person by whom the promise is made or given.

    Section 2 court: substituted, on 19 December 2002, by section 3 of the Contracts (Privity) Amendment Act 2002 (2002 No 77).

3 Act to bind the Crown
  • This Act shall bind the Crown.

4 Deeds or contracts for the benefit of third parties
  • Where a promise contained in a deed or contract confers, or purports to confer, a benefit on a person, designated by name, description, or reference to a class, who is not a party to the deed or contract (whether or not the person is in existence at the time when the deed or contract is made), the promisor shall be under an obligation, enforceable at the suit of that person, to perform that promise:

    provided that this section shall not apply to a promise which, on the proper construction of the deed or contract, is not intended to create, in respect of the benefit, an obligation enforceable at the suit of that person.

5 Limitation on variation or discharge of promise
  • (1) Subject to sections 6 and 7, where, in respect of a promise to which section 4 applies,—

    • (a) the position of a beneficiary has been materially altered by the reliance of that beneficiary or any other person on the promise (whether or not that beneficiary or that other person has knowledge of the precise terms of the promise); or

    • (b) a beneficiary has obtained against the promisor judgment upon the promise; or

    • (c) a beneficiary has obtained against the promisor the award of an arbitral tribunal upon a submission relating to the promise,—

    the promise and the obligation imposed by that section may not be varied or discharged without the consent of that beneficiary.

    (2) For the purposes of paragraph (b) or paragraph (c) of subsection (1),—

    • (a) an award of an arbitral tribunal or a judgment shall be deemed to be obtained when it is pronounced notwithstanding that some act, matter, or thing needs to be done to record or perfect it or that, on application to a court or on appeal, it is varied:

    • (b) an award of an arbitral tribunal or a judgment set aside on application to a court or on appeal shall be deemed never to have been obtained.

    Section 5(1)(c): amended, on 19 December 2002, by section 4 of the Contracts (Privity) Amendment Act 2002 (2002 No 77).

    Section 5(2)(a): amended, on 19 December 2002, by section 4 of the Contracts (Privity) Amendment Act 2002 (2002 No 77).

    Section 5(2)(b): amended, on 19 December 2002, by section 4 of the Contracts (Privity) Amendment Act 2002 (2002 No 77).

6 Variation or discharge of promise by agreement or in accordance with express provision for variation or discharge
  • Nothing in this Act prevents a promise to which section 4 applies or any obligation imposed by that section from being varied or discharged at any time—

    • (a) by agreement between the parties to the deed or contract and the beneficiary; or

    • (b) by any party or parties to the deed or contract if—

      • (i) the deed or contract contained, when the promise was made, an express provision to that effect; and

      • (ii) the provision is known to the beneficiary (whether or not the beneficiary has knowledge of the precise terms of the provision); and

      • (iii) the beneficiary had not materially altered his position in reliance on the promise before the provision became known to him; and

      • (iv) the variation or discharge is in accordance with the provision.

7 Power of court to authorise variation or discharge
  • (1) Where, in the case of a promise to which section 4 applies or of an obligation imposed by that section,—

    • (a) the variation or discharge of that promise or obligation is precluded by section 5(1)(a); or

    • (b) it is uncertain whether the variation or discharge of that promise is so precluded,—

    a court, on application by the promisor or promisee, may, if it is just and practicable to do so, make an order authorising the variation or discharge of the promise or obligation or both on such terms and conditions as the court thinks fit.

    (2) If a court—

    • (a) makes an order under subsection (1); and

    • (b) is satisfied that the beneficiary has been injuriously affected by the reliance of the beneficiary or any other person on the promise or obligation,—

    the court shall make it a condition of the variation or discharge that the promisor pay to the beneficiary, by way of compensation, such sum as the court thinks just.

8 Enforcement by beneficiary
  • The obligation imposed on a promisor by section 4 may be enforced at the suit of the beneficiary as if he were a party to the deed or contract, and relief in respect of the promise, including relief by way of damages, specific performance, or injunction, shall not be refused on the ground that the beneficiary is not a party to the deed or contract in which the promise is contained or that, as against the promisor, the beneficiary is a volunteer.

9 Availability of defences
  • (1) This section applies only where, in proceedings brought in a court, a claim is made in reliance on this Act by a beneficiary against a promisor.

    (2) Subject to subsections (3) and (4), the promisor shall have available to him, by way of defence, counterclaim, set-off, or otherwise, any matter which would have been available to him—

    • (a) if the beneficiary had been a party to the deed or contract in which the promise is contained; or

    • (b) if—

      • (i) the beneficiary were the promisee; and

      • (ii) the promise to which the proceedings relate had been made for the benefit of the promisee; and

      • (iii) the proceedings had been brought by the promisee.

    (3) The promisor may, in the case of a set-off or counterclaim arising by virtue of subsection (2) against the promisee, avail himself of that set-off or counterclaim against the beneficiary only if the subject matter of that set-off or counterclaim arises out of or in connection with the deed or contract in which the promise is contained.

    (4) Notwithstanding subsections (2) and (3), in the case of a counterclaim brought under either of those subsections against a beneficiary,—

    • (a) the beneficiary shall not be liable on the counterclaim, unless the beneficiary elects, with full knowledge of the counterclaim, to proceed with his claim against the promisor; and

    • (b) if the beneficiary so elects to proceed, his liability on the counterclaim shall not in any event exceed the value of the benefit conferred on him by the promise.

    Section 9(1): amended, on 19 December 2002, by section 5 of the Contracts (Privity) Amendment Act 2002 (2002 No 77).

10 Jurisdiction of District Courts
  • [Repealed]

    Section 10: repealed, on 19 December 2002, by section 6 of the Contracts (Privity) Amendment Act 2002 (2002 No 77).

11 Jurisdiction of Disputes Tribunals
  • [Repealed]

    Section 11: repealed, on 19 December 2002, by section 6 of the Contracts (Privity) Amendment Act 2002 (2002 No 77).

12 Amendments of Arbitration Act 1908
  • [Repealed]

    Section 12: repealed, on 1 July 1997, by section 18 of the Arbitration Act 1996 (1996 No 99).

13 Repeal
  • [Repealed]

    Section 13: repealed, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).

13A Act does not apply to promises, contracts, or deeds governed by foreign law
  • This Act does not apply to any promise, contract, or deed, or any part of any promise, contract, or deed, that is governed by a law other than New Zealand law.

    Section 13A: inserted, on 19 December 2002, by section 7 of the Contracts (Privity) Amendment Act 2002 (2002 No 77).

14 Savings
  • (1) Nothing in this Act limits or affects—

    • (a) any right or remedy that exists or is available apart from this Act; or

    • (b) subpart 2 of Part 2 of the Property Law Act 2007 or any other enactment that requires any contract to be in writing or to be evidenced by writing; or

    • (c) the law of agency; or

    • (d) the law of trusts.

    (2) Subsection (1) is subject to the repeal of section 7 of the Property Law Act 1952 effected by section 13 of this Act.

    (3) Section 7 of the Property Law Act 1952 continues to apply, despite its repeal effected by section 13 of this Act, in respect of any deed made before 1 April 1983.

    Section 14: substituted, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).

15 Application of Act
  • (1) This Act does not apply to any promise, contract, or deed made before 1 April 1983.

    (2) Subsection (1) is subject to section 14(3).

    Section 15: substituted, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).


Contents

  • 1General

  • 2Status of reprints

  • 3How reprints are prepared

  • 4Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • 5List of amendments incorporated in this reprint (most recent first)


Notes
1 General
  • This is a reprint of the Contracts (Privity) Act 1982. The reprint incorporates all the amendments to the Act as at 1 January 2008, as specified in the list of amendments at the end of these notes.

    Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order. For more information, see http://www.pco.parliament.govt.nz/reprints/ .

2 Status of reprints
  • Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

    This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

3 How reprints are prepared
  • A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.

4 Changes made under section 17C of the Acts and Regulations Publication Act 1989
  • Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

    A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.

    In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint:

    • omission of unnecessary referential words (such as of this section and of this Act)

    • typeface and type size (Times Roman, generally in 11.5 point)

    • layout of provisions, including:

      • indentation

      • position of section headings (eg, the number and heading now appear above the section)

    • format of definitions (eg, the defined term now appears in bold type, without quotation marks)

    • format of dates (eg, a date formerly expressed as the 1st day of January 1999 is now expressed as 1 January 1999)

    • position of the date of assent (it now appears on the front page of each Act)

    • punctuation (eg, colons are not used after definitions)

    • Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly

    • case and appearance of letters and words, including:

      • format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter)

      • small capital letters in section and subsection references are now capital letters

    • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly

    • running heads (the information that appears at the top of each page)

    • format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

5 List of amendments incorporated in this reprint (most recent first)