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Contract and Commercial Law Act 2017

Contracts legislation - Frustrated contracts - Other provisions relating to application

67: Court must give effect to provision in contract

You could also call this:

“The court must follow special rules in your contract when things go wrong”

When you have a contract, it might include a special rule for when things don’t go as planned. This rule is meant to work if something unexpected happens that could stop the contract from working properly. The court has to follow this special rule if it’s in your contract.

The court must do two things. First, they have to make sure the special rule in your contract is followed. Second, they have to follow some other rules (sections 60 to 66) only if those rules don’t clash with your contract’s special rule.

This means that if you and the other person agreed on what should happen if things go wrong, the court will respect that agreement. They won’t change your agreement unless they absolutely have to follow the other rules.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6844155.

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"Court can split contracts into finished and unfinished parts when something goes wrong"

Part 2 Contracts legislation
Frustrated contracts: Other provisions relating to application

67Court must give effect to provision in contract

  1. This section applies if a contract to which this subpart applies contains a provision that, on the true construction of the contract, is—

  2. intended to have effect in the event of circumstances arising that operate, or would but for the provision operate, to frustrate the contract; or
    1. intended to have effect whether those circumstances arise or not.

      1. The court must—

      2. give effect to the provision; and
        1. give effect to sections 60 to 66 only to the extent (if any) that appears to the court to be consistent with the provision.

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