Contract and Commercial Law Act 2017

37 Party may cancel contract if induced to enter into it by misrepresentation or if term is or will be breached

(1)

A party to a contract may cancel it if—

(a)

the party has been induced to enter into it by a misrepresentation, whether innocent or fraudulent, made by or on behalf of another party to the contract; or

(b)

a term in the contract is breached by another party to the contract; or

(c)

it is clear that a term in the contract will be breached by another party to the contract.

(2)

If subsection (1)(a), (b), or (c) applies, a party may exercise the right to cancel the contract if, and only if,—

(a)

the parties have expressly or impliedly agreed that the truth of the representation or, as the case may require, the performance of the term is essential to the cancelling party; or

(b)

the effect of the misrepresentation or breach of the contract is, or, in the case of an anticipated breach, will be,—

(i)

substantially to reduce the benefit of the contract to the cancelling party; or

(ii)

substantially to increase the burden of the cancelling party under the contract; or

(iii)

in relation to the cancelling party, to make the benefit or burden of the contract substantially different from that represented or contracted for.

(3)

Subsection (1) is subject to the rest of this subpart, but does not limit section 36.

Compare: 1979 No 11 s 7(3), (4)