Contract and Commercial Law Act 2017 comes into force

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Corporate Update

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On 1 September, the Contract and Commercial Law Act 2017 (CCLA) comes into force. The CCLA is the product of a large statute revision exercise that aimed to make the Acts within its scope more accessible, readable and easier to understand by arranging the statutes more logically, removing inconsistencies and overlaps, repealing obsolete and redundant provisions and modernising the expression, style and format of the statutes.

What is happening?

When the CCLA comes into force, the following Acts will be repealed (and replaced by the CCLA):

The Electronic Transactions Regulations 2003 also will be revoked and consequential amendments will be made to various other Acts that currently refer to any of the Acts listed above. 

Are there any transitional provisions of which I should be aware?

A range of transitional provisions will apply to contacts entered into before 1 September 2017, as set out in Schedule 1 of the CCLA. The full CCLA will apply to contracts entered into on or after 1 September.

Have any substantive changes been made?

The CCLA is not intended to change the effect of the law. As noted above, the scope of the revision exercise allowed for inconsistencies to be corrected and for obsolete or redundant provisions to be removed. Schedule 2 sets out the minor amendments that have been made. Some examples of the types of the technical changes that have been made include:

  • Extending the power of the court to authorise variation or discharge, which currently appears in section 7(1)(b) of the Contracts (Privity) Act 1982, to apply to an obligation as well as a promise
  • Updating the word 'drunkenness', used in the Sale of Goods Act 1908, to 'intoxication'
  • Aligning the definition of 'information technology' used in the Mercantile Law Act 1908 with that which currently appears in the Electronic Transactions Act 2002

What action should I take?

When reviewing existing agreements after 1 September, you should consider which Act will apply to that agreement, having regard to the transitional periods set out in Schedule 1 of the Act (bearing in mind, the intent of the CCLA is not to change the existing law, so material differences should not arise).  

Where there are express references to repealed legislation in an existing agreement (such as the Contracts (Privity) Act 1982), a Court generally would read this as a reference to the new Act, and many contracts will contain an express instruction to this effect in the interpretation section.       

We recommend that new agreements are reviewed and updated to remove references to any of the Acts that will be repealed on 1 September and replace them with the corresponding references to the CCLA. Conveniently, the CCLA provides a table at Schedule 3 that sets out the provisions of each repealed Act and the corresponding provision of the CCLA.    

If you have any queries or would like assistance with updating your template contracts, please do not hesitate to contact us.