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Contract and Commercial Law Act 2017

Contracts legislation - Contractual remedies - Cancellation

41: When cancellation may take effect

You could also call this:

“Cancelling a contract: When it starts to count”

When you want to cancel a contract, there are rules about when the cancellation becomes effective. You need to let the other person know that you’re cancelling the contract. This can happen in two ways:

You can tell the other person directly that you’re cancelling the contract. Once you’ve told them, the cancellation takes effect.

If you can’t tell the other person directly, you can show that you want to cancel the contract in a clear way that makes sense for the situation. This might happen if it’s not possible to talk to the other person, or if the other person has done something that means they wouldn’t expect to get a notice about the cancellation.

You don’t have to use special words to cancel a contract. You can use words, actions, or both to show that you want to cancel. The important thing is that you make it clear that you want to cancel the contract.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6844108.

Topics:
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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"

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42: Effect of cancellation, or

"What happens when you cancel a contract"

Part 2 Contracts legislation
Contractual remedies: Cancellation

41When cancellation may take effect

  1. The cancellation of a contract by a party does not take effect—

  2. before the time at which the cancellation is made known to the other party; or
    1. before the time at which the party cancelling the contract shows, by some clear means that is reasonable in the circumstances, an intention to cancel the contract, if—
      1. it is not reasonably practicable for the cancelling party to communicate with the other party; or
        1. the other party cannot reasonably expect to receive notice of the cancellation because of that other party’s conduct in relation to the contract.

        2. The cancellation may be made known by words or by conduct showing an intention to cancel, or both. It is not necessary to use any particular form of words, so long as the intention to cancel is made known.

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