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Contract and Commercial Law Act 2017

Contracts legislation - Illegal contracts - Restraints of trade

83: Restraints of trade

You could also call this:

“Courts can change or remove unfair rules in contracts”

If you have a contract with a rule that unfairly limits what you can do, the court can change it. The court has three options:

  1. They can remove the unfair rule and keep the rest of the contract.

  2. They can change the rule to make it fair, based on what would have been reasonable when you first agreed to the contract.

  3. If changing or removing the rule would make the whole contract unfair, the court can decide not to enforce the contract at all.

The court can change the rule in any way they think is needed to make it fair, not just by removing words.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6844184.

Topics:
Money and consumer rights > Consumer protection Business > Fair trading
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82: Restriction on granting relief otherwise than in accordance with this subpart, or

"Courts can only help with illegal contracts in ways this law allows"

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84: Law relating to restraint of trade and to ouster of jurisdiction not affected, or

"Rules for special contracts that limit your actions or court options stay the same"

Part 2 Contracts legislation
Illegal contracts: Restraints of trade

83Restraints of trade

  1. The court may, if a provision of a contract constitutes an unreasonable restraint of trade,—

  2. delete the provision and give effect to the contract as amended; or
    1. modify the provision so that, at the time the contract was entered into, the provision as modified would have been reasonable, and give effect to the contract as modified; or
      1. decline to enforce the contract if the deletion or modification of the provision would so alter the bargain between the parties that it would be unreasonable to allow the contract to stand.

        1. The court may modify a provision even if the modification cannot be effected by deleting words from the provision.

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