{"id":209650,"date":"2021-08-24T19:46:20","date_gmt":"2021-08-24T06:46:20","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=209650"},"modified":"2026-02-13T16:53:11","modified_gmt":"2026-02-13T03:53:11","slug":"sale-of-goods-act","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/commercial-contracts\/sale-of-goods-act\/","title":{"rendered":"How Does the Contract and Commercial Law Act Affect My NZ Contract?"},"content":{"rendered":"\n<p>Wherever you purchase a good or service, you are inadvertently entering into a contract. Many consumers do not realise this, as there are usually no disputes that occur during these sales. These contracts are implied, and their legal standing comes from the <em>Contract and Commercial Law Act 2017<\/em> (the Act), specifically Part 2, which deals with the sale of goods. This article will explain the Act and how it might affect your contract in New Zealand.&nbsp;<\/p>\n\n\n\n<p>Importantly, the Act applies not only to businesses but also to private individuals who sell goods as part of their trade. This means if you are a small business, sole trader, or casual seller, the Act may still apply to your transactions. The law aims to provide fairness and predictability in the transfer of goods, ensuring both parties understand their rights and obligations.<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2021\/12\/22115855\/cytonn-photography-GJao3ZTX9gU-unsplash-e1640129621597.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">Commercial Contracts Checklist<\/div>\n            <div class=\"body-text\">\n                <p>To protect your business, ensure supplier contracts meet your business\u2019 needs. Our free Commercial Contracts Checklist will help.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.nz\/Commercial_Contracts_Guide_NZ.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">Contract and Commercial Law Act 2017<\/h2>\n\n\n\n<p>The Act is legislation that governs how goods and services are bought and sold. It covers everything from contract formation to the performance of the contract. Therefore, it is important to understand your obligations as it supports commercial dealings and clarifies when a seller must hand over goods to the buyer.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Consumer Guarantees Act 1993 vs Contract and Commercial Law Act 2017<\/h2>\n\n\n\n<p>Another important piece of legislation that deals with the sale of goods is the <em>Consumer Guarantees Act<\/em>. This differs from the Act as the former deals with the quality of products being sold and whether they are as advertised. By contrast, the Act deals with how contracts are formed when a good or service is being provided. Likewise, the Act will affect certain parts of your contract in New Zealand. We explore these elements below.<\/p>\n\n\n\n<p>It is worth noting that in many cases, both Acts can apply simultaneously. For example, a <a href=\"https:\/\/legalvision.co.nz\/regulatory-and-compliance\/penalties-for-breaching-consumer-guarantees\/\">faulty product could breach the <em>Consumer Guarantees Act<\/em><\/a>, while a failure to deliver the product at all may constitute a breach under the Act. Knowing the difference between these two laws helps both consumers and sellers better understand which legal remedies are available depending on the issue.<\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+64800005570\" class=\"not-prose\">0800 005 570<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center 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It applies where you sell a good or have an agreement to sell a good. The Act says that contract formation occurs when one party agrees to transfer property to another party in exchange for consideration.&nbsp;<\/p>\n\n\n\n<p><a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/consideration-contract\/\">Consideration is something of value (usually monetary) and is an element of a legally binding contract<\/a>.&nbsp;<\/p>\n\n\n\n<p>Under the Act, there does not always need to be a written contract for it to be enforceable. An oral agreement or even behaviour implying consent (such as handing over money at the point of sale) can be sufficient to constitute a contract. This is particularly relevant in informal or online sales where documentation might be minimal or absent altogether.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Performance of the Contract<\/h2>\n\n\n\n<p>The Act also supports the performance of contracts for the sale of goods. The performance of a contract is the actual carrying out of what was agreed. For example, suppose you had agreed to buy goods. The performance of the contract is when the seller transfers the goods into your possession.<\/p>\n\n\n\n<p>There can also be ambiguity in consumer contracts as to when a seller passes goods to the buyer. The Act ascertains that the seller must transfer goods to the buyer when both parties intend. This intention will either be:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>specified in the contract;&nbsp;<\/li>\n\n\n\n<li>implied from the conduct of the parties; or&nbsp;<\/li>\n\n\n\n<li>implied from the circumstances surrounding the transaction.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>The timing of delivery and transfer of ownership can have implications. For instance, if goods are damaged during transit, determining whether the ownership had already transferred to the buyer can influence who bears the risk. The Act helps resolve such disputes by outlining when ownership and risk are transferred.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Lien<\/h2>\n\n\n\n<p>A lien is a form of security that is granted over a good that secures payment of an obligation. For example, you might be a producer who sells goods to a distributor. If your distributor cannot pay the full price of your supplied goods, you can grant a lien over them. This means that you have security in the goods until they can pay whatever they owe. Then, if the distributor cannot pay the rest, you can take back the goods.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Remedies<\/h2>\n\n\n\n<p><a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/handle-contract-breach\/\">If a consumer contract is not honoured or has not been fully performed<\/a>, the Act provides certain remedies, namely:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>damages; or<\/li>\n\n\n\n<li>specific performance.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Remedy<\/strong><\/td><td><strong>Description<\/strong><\/td><\/tr><tr><td><strong>Damages<\/strong><\/td><td>A buyer can appeal for damages if the seller refuses or fails to deliver the goods. The damages will usually be set at the loss that the buyer incurs from not receiving the goods.&nbsp;A seller is also able to claim damages if they do not receive payment for their goods. They can also claim damages if the buyer refuses to accept the goods after the parties enter an agreement.<\/td><\/tr><tr><td><strong>Specific Performance<\/strong><\/td><td>Both buyers and sellers can also employ specific performance if either party does not receive what was promised under the contract. Specific performance is where the courts enforce the terms in the contract. Another name is \u2018action for price\u2019, where the seller enforces the contract on the buyer.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<p><a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/legally-binding-agreement-new-zealand\/\">Contractual relationships are the hallmark of any commercial dealing<\/a>. They support transactions and agreements and are legally enforceable. One type of contract is a consumer contract, and the Act governs this. The Act determines how contracts are formed and performed, and remedies available to both the buyer and the seller. The Act also allows sellers to apply liens over their products to guarantee payment for their goods.<\/p>\n\n\n\n<p>For legal assistance with how the <em>Contract and Commercial Law Act 2017<\/em> affects your contracts, LegalVision provides ongoing legal support for NZ businesses through our fixed-fee legal membership. Our experienced <a href=\"https:\/\/legalvision.co.nz\/contract-lawyers-lp\">contract lawyers<\/a> help businesses manage contracts, employment law, disputes, intellectual property and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision\u2019s legal membership, call <a href=\"tel:+64800005570\" class=\"AVANSERnumber dynamic-number\">0800 005 570<\/a> or <a href=\"https:\/\/legalvision.co.nz\/membership\/\">visit our membership page<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1769661717571\"><strong class=\"schema-faq-question\">Do sellers have to use liens?<\/strong> <p class=\"schema-faq-answer\">No, if a seller has already paid for the goods, there is no need to use a lien. However, it is an option available to sellers if need be.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1769661726851\"><strong class=\"schema-faq-question\">Will either party always receive a remedy during a breach of contract?<\/strong> <p class=\"schema-faq-answer\">The courts will not always give a remedy, but they are likely to if one party breaches the contract.\u00a0\u00a0\u00a0\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1769661736272\"><strong class=\"schema-faq-question\">Do I still have rights under the Act if I bought something second-hand?<\/strong> <p class=\"schema-faq-answer\">Yes. The Act still applies to second-hand goods, though the expectations around quality and performance may differ. The condition of the item and what was disclosed at the time of sale will impact your legal position.<\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"5d238358bb\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/209650\" \/>            <input value=\"https:\/\/legalvision.co.nz\/commercial-contracts\/sale-of-goods-act\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"How Does the Contract and Commercial Law Act Affect My NZ Contract?\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Wherever you purchase a good or service, you are inadvertently entering into a contract. Many consumers do not realise this, as there are usually no disputes that occur during these sales. These contracts are implied, and their legal standing comes from the Contract and Commercial Law Act 2017 (the Act), specifically Part 2, which deals<a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/sale-of-goods-act\/\">Continue reading <span class=\"sr-only\">&#8220;How Does the Contract and Commercial Law Act Affect My NZ Contract?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13496,"featured_media":215460,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[3],"tags":[25,54,229,1070,2328],"class_list":["post-209650","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-contracts","tag-small-business","tag-medium-business","tag-consumer-guarantees-act","tag-contract-remedies","tag-contract-and-commercial-law-act"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Does the Contract and Commercial Law Act Affect Contracts? | LegalVision New Zealand<\/title>\n<meta name=\"description\" content=\"The Contract and Commercial Law Act governs how goods and services are bought and sold. 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However, it is an option available to sellers if need be.","inLanguage":"en-NZ"},"inLanguage":"en-NZ"},{"@type":"Question","@id":"https:\/\/legalvision.co.nz\/commercial-contracts\/sale-of-goods-act\/#faq-question-1769661726851","name":"Will either party always receive a remedy during a breach of contract?","acceptedAnswer":{"@type":"Answer","text":"The courts will not always give a remedy, but they are likely to if one party breaches the contract.\u00a0\u00a0\u00a0\u00a0","inLanguage":"en-NZ"},"inLanguage":"en-NZ"},{"@type":"Question","@id":"https:\/\/legalvision.co.nz\/commercial-contracts\/sale-of-goods-act\/#faq-question-1769661736272","name":"Do I still have rights under the Act if I bought something second-hand?","acceptedAnswer":{"@type":"Answer","text":"Yes. The Act still applies to second-hand goods, though the expectations around quality and performance may differ. The condition of the item and what was disclosed at the time of sale will impact your legal position.","inLanguage":"en-NZ"},"inLanguage":"en-NZ"}]}},"_links":{"self":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts\/209650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/users\/13496"}],"replies":[{"embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/comments?post=209650"}],"version-history":[{"count":6,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts\/209650\/revisions"}],"predecessor-version":[{"id":230015,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts\/209650\/revisions\/230015"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/media\/215460"}],"wp:attachment":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/media?parent=209650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/categories?post=209650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/tags?post=209650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}