In this Act, unless the context otherwise requires,—
Benefit includes—
(a)
Any advantage; and
(b)
Any immunity; and
(c)
Any limitation or other qualification of—
(i)
An obligation to which a person (other than a party to the deed or contract) is or may be subject; or
(ii)
A right to which a person (other than a party to the deed or contract) is or may be entitled; and
(d)
Any extension or other improvement of a right or rights to which a person (other than a party to the deed or contract) is or may be entitled:
Beneficiary, in relation to a promise to which section 4 of this Act applies, means a person (other than the promisor or promisee) on whom the promise confers, or purports to confer, a benefit
Contract includes a contract made by deed or in writing, or orally, or partly in writing and partly orally or implied by law
Court means, in relation to any matter, the court, tribunal, or arbitral tribunal by or before which the matter falls to be determined
Court: paragraph (c) was substituted, as from 1 March 1989, by section 62 Disputes Tribunals Act 1988 (1988 No 110).
Court: this definition was substituted, as from 19 December 2002, by section 3 Contracts (Privity) Amendment Act 2002 (2002 No 77).
Promisee, in relation to a promise to which section 4 of this Act applies, means a person who is both—
(a)
A party to the deed or contract; and
(b)
A person to whom the promise is made or given:
Promisor, in relation to a promise to which section 4 of this Act applies, means a person who is both—
(a)
A party to the deed or contract; and
(b)
A person by whom the promise is made or given.
3-
Act to bind the Crown
This Act shall bind the Crown.
4-
Deeds or contracts for the benefit of third parties
Where a promise contained in a deed or contract confers, or purports to confer, a benefit on a person, designated by name, description, or reference to a class, who is not a party to the deed or contract (whether or not the person is in existence at the time when the deed or contract is made), the promisor shall be under an obligation, enforceable at the suit of that person, to perform that promise:
Provided that this section shall not apply to a promise which, on the proper construction of the deed or contract, is not intended to create, in respect of the benefit, an obligation enforceable at the suit of that person.
Subject to sections 6 and 7 of this Act, where, in respect of a promise to which section 4 of this Act applies,—
(a)
The position of a beneficiary has been materially altered by the reliance of that beneficiary or any other person on the promise (whether or not that beneficiary or that other person has knowledge of the precise terms of the promise); or
(b)
A beneficiary has obtained against the promisor judgment upon the promise; or
(c)
A beneficiary has obtained against the promisor the award of an arbitral tribunal upon a submission relating to the promise,—
the promise and the obligation imposed by that section may not be varied or discharged without the consent of that beneficiary.
(2)
For the purposes of paragraph (b) or paragraph (c) of subsection (1) of this section,—
(a)
An award of an arbitral tribunal or a judgment shall be deemed to be obtained when it is pronounced notwithstanding that some act, matter, or thing needs to be done to record or perfect it or that, on application to a Court or on appeal, it is varied:
(b)
An award of an arbitral tribunal or a judgment set aside on application to a Court or on appeal shall be deemed never to have been obtained.
Section 5 was amended, as from 19 December 2002, by section 4 Contracts (Privity) Amendment Act 2002 (2002 No 77) by substituting the words “arbitral tribunal” for the word “arbitrator” in each place where it occurs.
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Variation or discharge of promise by agreement or in accordance with express provision for variation or discharge
Nothing in this Act prevents a promise to which section 4 of this Act applies or any obligation imposed by that section from being varied or discharged at any time—
(a)
By agreement between the parties to the deed or contract and the beneficiary; or
(b)
By any party or parties to the deed or contract if—
(i)
The deed or contract contained, when the promise was made, an express provision to that effect; and
(ii)
The provision is known to the beneficiary (whether or not the beneficiary has knowledge of the precise terms of the provision); and
(iii)
The beneficiary had not materially altered his position in reliance on the promise before the provision became known to him; and
(iv)
The variation or discharge is in accordance with the provision.
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Power of Court to authorise variation or discharge
(1)
Where, in the case of a promise to which section 4 of this Act applies or of an obligation imposed by that section,—
(a)
The variation or discharge of that promise or obligation is precluded by section 5(1)(a) of this Act; or
(b)
It is uncertain whether the variation or discharge of that promise is so precluded,—
a Court, on application by the promisor or promisee, may, if it is just and practicable to do so, make an order authorising the variation or discharge of the promise or obligation or both on such terms and conditions as the Court thinks fit.
(2)
If a Court—
(a)
Makes an order under subsection (1) of this section; and
(b)
Is satisfied that the beneficiary has been injuriously affected by the reliance of the beneficiary or any other person on the promise or obligation,—
the Court shall make it a condition of the variation or discharge that the promisor pay to the beneficiary, by way of compensation, such sum as the Court thinks just.
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Enforcement by beneficiary
The obligation imposed on a promisor by section 4 of this Act may be enforced at the suit of the beneficiary as if he were a party to the deed or contract, and relief in respect of the promise, including relief by way of damages, specific performance, or injunction, shall not be refused on the ground that the beneficiary is not a party to the deed or contract in which the promise is contained or that, as against the promisor, the beneficiary is a volunteer.
This section applies only where, in proceedings brought in a Court, a claim is made in reliance on this Act by a beneficiary against a promisor.
(2)
Subject to subsections (3) and (4) of this section, the promisor shall have available to him, by way of defence, counterclaim, set-off, or otherwise, any matter which would have been available to him—
(a)
If the beneficiary had been a party to the deed or contract in which the promise is contained; or
(b)
If—
(i)
The beneficiary were the promisee; and
(ii)
The promise to which the proceedings relate had been made for the benefit of the promisee; and
(iii)
The proceedings had been brought by the promisee.
(3)
The promisor may, in the case of a set-off or counterclaim arising by virtue of subsection (2) of this section against the promisee, avail himself of that set-off or counterclaim against the beneficiary only if the subject-matter of that set-off or counterclaim arises out of or in connection with the deed or contract in which the promise is contained.
(4)
Notwithstanding subsections (2) and (3) of this section, in the case of a counterclaim brought under either of those subsections against a beneficiary,—
(a)
The beneficiary shall not be liable on the counterclaim, unless the beneficiary elects, with full knowledge of the counterclaim, to proceed with his claim against the promisor; and
(b)
If the beneficiary so elects to proceed, his liability on the counterclaim shall not in any event exceed the value of the benefit conferred on him by the promise.
Subsection (1) was amended, as from 19 December 2002, by section 5 Contracts (Privity) Amendment Act 2002 (2002 No 77) by omitting the words “or an arbitration”.
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Jurisdiction of District Courts
[Repealed]
Subsection (1)(b) was amended, as from 13 November 1989, by section 10(1) District Courts Amendment Act 1989 (1989 No 107) by substituting the expression “$50,000” for the expression “$12,000”. This amount was further increased, as from 1 July 1992, to “$200,000” by section 19(1) District Courts Amendment Act 1991 (1991 No 61).
Sections 10 and 11 were repealed, as from 19 December 2002, by section 6 Contracts (Privity) Amendment Act 2002 (2002 No 77).
11-
Jurisdiction of Disputes Tribunals
[Repealed]
Section 11 was substituted, as from 1 March 1989, by section 63 Disputes Tribunals Act 1988 (1988 No 110).
Section 11 was amended, as from 3 July 1998, by section 10 Disputes Tribunals Amendment Act 1998 (1998 No 84) by substituting the expressions “$7,500” for the expression “$3,000”.
Subsection (3) was amended, as from 3 July 1998, by section 10 Disputes Tribunals Amendment Act 1998 (1998 No 84) by substituting the expression “$12,000” for the expression “$5,000”.
Sections 10 and 11 were repealed, as from 19 December 2002, by section 6 Contracts (Privity) Amendment Act 2002 (2002 No 77).
Section 12 was repealed, as from 1 July 1997, by section 18 Arbitration Act 1996 (1996 No 99).
13-
Repeal
[Repealed]
Section 13: repealed, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).
13A
Act does not apply to promises, contracts, or deeds governed by foreign law
This Act does not apply to any promise, contract, or deed, or any part of any promise, contract, or deed, that is governed by a law other than New Zealand law.
Section 13A was inserted, as from 19 December 2002, by section 7 Contracts (Privity) Amendment Act 2002 (2002 No 77).
14-
Savings
(1)
Nothing in this Act limits or affects—
(a)
any right or remedy that exists or is available apart from this Act; or
(b)
subpart 2 of Part 2 of the Property Law Act 2007 or any other enactment that requires any contract to be in writing or to be evidenced by writing; or
(c)
the law of agency; or
(d)
the law of trusts.
(2)
Subsection (1) is subject to the repeal of section 7 of the Property Law Act 1952 effected by section 13 of this Act.
(3)
Section 7of the Property Law Act 1952 continues to apply, despite its repeal effected by section 13 of this Act, in respect of any deed made before 1 April 1983.
Section 14: substituted, on 1 January 2008, by section 364(1) of the Property Law Act 2007 (2007 No 91).
