Plain language law

New Zealand law explained for everyone

Contract and Commercial Law Act 2017

Contracts legislation - Contractual remedies - Cancellation

39: Parties with substantially same interest

You could also call this:

“Court decides if you can cancel a contract when someone else misbehaves”

If someone in a contract does something wrong like breaking a promise or lying, other people in the contract might want to cancel it. But if you’re in the same situation as the person who did the wrong thing, you can’t just cancel the contract on your own. You have to ask the court for permission.

If you want to cancel the contract, you can ask the court for permission. The court will decide if it’s fair to let you cancel. They’ll think about whether it’s the right thing to do.

If the court says yes, they might add some rules about how you can cancel. These rules are there to make sure everything is fair for everyone involved.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6844106.

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38: No cancellation if contract is affirmed, or

"You can't change your mind about a contract once you've said it's okay"

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40: Sections 36 to 39 have effect in place of rules of common law and of equity, or

"New rules replace old ones for cancelling contracts"

Part 2 Contracts legislation
Contractual remedies: Cancellation

39Parties with substantially same interest

  1. A party who has substantially the same interest under the contract as the party whose act constitutes the repudiation, misrepresentation, or breach may cancel the contract only with the leave of the court.

  2. The court may, on application made for the purpose, grant leave under subsection (1) if it is satisfied that it is just to do so.

  3. The leave may be granted on the terms and conditions that the court thinks fit.

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