Contract and Commercial Law Act 2017

Contracts legislation - Contractual mistakes

31: Rights of third persons not affected

You could also call this:

“This law protects innocent buyers when someone else made a mistake”

This law is about protecting people who weren’t involved in a mistaken contract. If you buy something from someone who made a mistake when they got it, you might be able to keep it. This happens if you didn’t know about the mistake, you weren’t part of the original deal, and you acted honestly.

The law covers two types of situations. First, when someone who made a mistake in a contract sells something for money. Second, when someone buys something from a person who got it through a mistaken contract.

The law also says that it doesn’t change the rules about assigning things in action. These are special kinds of property rights that you can find in another law called the Property Law Act 2007.

A “mistaken contract” means a contract that was made because of a mistake about the law. You can find more information about this in section 24(1)(a) of this law.

If you want to know more about what “disposition” means in this law, you can look at section 9.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6844090.


Previous

30: Persons who may apply, or

"Who can ask the court for help or information about getting help"


Next

32: This subpart does not apply to contracts governed by foreign law, or

"Rules for foreign contracts don't follow this part of NZ law"

Part 2 Contracts legislation
Contractual mistakes

31Rights of third persons not affected

  1. Nothing in an order made under this subpart invalidates a disposition of property referred to in subsection (2) if the person to whom the disposition was made—

  2. was not a party to the mistaken contract; and
    1. had not, at the time of the disposition, notice that the property was the subject of, or the whole or part of the consideration for, a mistaken contract; and
      1. otherwise acted in good faith.
        1. The dispositions are—

        2. a disposition of property by a party to a mistaken contract for valuable consideration:
          1. a disposition of property made by or through a person who became entitled to the property under a disposition to which paragraph (a) applies.
            1. Nothing in an order made under this subpart affects subpart 5 of Part 2 of the Property Law Act 2007 (which relates to the assignment of things in action).

            2. In this section, mistaken contract means a contract entered into in the circumstances described in section 24(1)(a).

            3. See section 9 (which defines disposition).

            Compare