Commercial and Business Law

Generally, contracts don’t have to be in writing. A verbal agreement is binding – but it can make things easier to write it down. That way, if things go wrong, you have something to refer back to.

Putting the contract in writing also makes sure you both understand exactly what’s being promised before you agree.

Some contracts have to be in writing, including credit contracts, insurance contracts, agreements to buy and sell real estate, and agreements to buy cars from registered dealers.

An agreement is any understanding that you reach with another person. A contract is a specific type of agreement that by its terms is binding on the parties and enforceable by the court. Not all agreements are called a contract, but all contracts are called agreements.

Contracts come in all shapes and forms. Some are required to be in writing – for example, the sale and purchase of land, and personal guarantees. Verbal or oral agreements may be difficult to enforce because there is no independent record of the contract. Some contracts have implied terms that apply even if they are not included in the contract such as, implied guarantees under the Consumer Guarantees Act 1986, or contracts for consumer products guaranteeing acceptable quality.

The purpose of a contract is to allow property to be transferred; goods and products to be delivered, and services to be provided. There is, however, always risk. Contracts allocate risk: who pays and when, how is the contract to be performed, and what happens if it goes wrong. These matters are addressed within clauses such as: entire agreement; representation; warranties; implied warranties; indemnities; Force majeure; breach and termination; assignment of rights, and jurisdiction.

Lundons Law provides advice on a wide-range of contracts, including: sale and purchase of land, commercial arrangements, franchise agreements, drafting supply terms for your business, and viticulture supply agreements.

Call Steve, Simon or Laura.

The Construction Contracts Act (‘CCA’) applies to all construction work, with different requirements for commercial and residential contracts. The CCA applies to all agreements made verbally, in writing or a combination of both. It is not possible to contract out of the CCA.

The CCA provides a process for payments and disputes. It aims to provide a payment process that is fast and cost-effective, which is supported by an adjudication process for dealing with disputes. It also provides enforcement options to recover payments.

Amendments were made to the CCA in 2015 relating to payment and dispute resolution, including:

• residential and commercial construction are treated the same under the Act. This means residential contracts can access the
• CCA’s dispute resolution and payment regimes
• design, engineering and quantity surveying work is now in scope
• the adjudication process has been streamlined, and the enforcement process has been strengthened.

The definition of construction work is broad, and includes: construction or installation, alteration, maintenance and removal of buildings, fittings or infrastructure. Also included is work related to the construction activities such as excavation, site clearance, scaffolding and prefabricated components, and site restoration.

The CCA provides strict requirements for claiming payment (“payment claim”), and response to the claim (“payment schedule”). Non-compliance can result in either the inability to enforce the payment claim under the Act, or a failure of the payment schedule can result in a requirement for immediate payment of the claim, and then the cost of argument to follow.

We strongly recommend that you promptly seek legal advice to help you meet CCA requirements – Lundons is experienced and will be able to help.

If the requirements are adhered to and result in a dispute, then either party can commence adjudication. It is an alternative to going to court and provides an earlier resolution, and hopefully, at a lower cost.

Contact Simon for advice.