Contract and Commercial Law Act 2017

Introduction

The Contract and Commercial Law Act 2017 (C & C Act), another omnibus act implementing changes to a laundry list of pieces of legislation, was passed in early May and comes into force on 1 September 2017. The C & C Act will bring about a number of small, but significant, changes as well as making minor changes to a long list of contract and commercial laws.

The primary aim of the C & C Act is modernisation, not substantive amendment. These changes will occur in the areas of:

• contract law;
• the law affecting the sale of goods;
• laws affecting electronic transactions;
• the law affecting the carriage of goods; and
• a range of other commercial matters.

It is important to note that some familiar, and quite old, statutes will be repealed – in which case a range of transitional measures will apply. A list of the repealed statutes is set out below. As a result, a range of businesses should take this opportunity to review their trading terms and other standard (template) contracts in order to being them up to date as a result of the changes heralded by the C & C Act.

The C & C Act makes use of a process of “revision” contemplated by the Legislation Act 2012 – with the result that the repealed/replaced statues are consolidated within the C & C Act and drafting changes made, where necessary, to clarify the original drafting and/or tidy up inconsistencies.

Impact on pre / post-1 September 2017 contracts

The prevailing (new) provisions in the C & C Act are intended to apply to contracts entered into from 1 September 2017. However, the transitional provisions tackle this issue in a two-part approach:

• the substantive changes will be deemed to apply – regardless of whether the relevant contract was entered before or after 1 September 2017; and
• in the case of the minor updates – a reference to an old statutory provision will continue to mean that the old law (prior to updating by the C & C Act) will continue to be relevant. As a result, the effect of the law as expressed in those old enactments continues to apply in relation to those matters.

In the case of contracts entered into after 1 September 2017 – the modernised provision contained in the C & C Ac will apply in full.

The C & C Act contains a detailed schedule which can be used as a reference table to determine the impact of an affected statute on existing contracts. By its nature, the list of minor changes (to clarify Parliament’s intent or reconcile inconsistencies) is an extensive one.

Action points

Businesses and their advisers should take this opportunity to review their trading terms and standard contracts and make sure that, particularly, references to the statutory provisions in the list of substantive changes are updated – ready for the 1 September 2017 start date.

The most common changes are likely to be those relating to:

• carriage of goods;
• privity of contract; and
• electronic transactions.

However, because of the nature of the C & C Act (as a revision statute), I think it unlikely that substantive changes will be required to existing contracts – other than updating the reference to the relevant statutory provision. Nonetheless, it is a truism that such a review provides a good opportunity to ensure that standard term (template/boilerplate) provisions remain up-to—date and relevant.

For lawyers, this might also provide a good opportunity to brush up on the impact of the Contractual Remedies Act 1979 (which is being carried across as Part 2, subpart 3 of the C & C Act).

List of repealed statutes

The following contract and commercial statutes are repealed and consolidated by the C & C Act:

• Carriage of Goods Act 1979;
• Contracts (Privity) Act 1982;
• Contractual Mistakes Act 1977;
• Contractual Remedies Act 1979;
• Electronic Transactions Act 2002;
• Frustrated Contracts Act 1944;
• Illegal Contracts Act 1970;
• Mercantile Law Act 1908 (with one carve-out);
• Minors’ Contracts Act 1969;
• Sale of Goods Act 1908; and
• Sale of Goods (United Nations Convention) Act 1994.

Further information

If you would like more information about any of the matters discussed in this note, please contact me.