Many legal minds making NZ LAW work

We are an association of independent legal practices, proactively sharing ideas and expertise for the benefit of our clients.

Be Careful with Long-term Contracts

Published: 11th December 2015

Author: Neil Dent, Gifford Devine

Published in: Rural e.speaking | Issue #19

Forgetting the details can have significant consequences

Many contractual relationships last for years and, over time, the parties may forget, or change, their understanding of what was originally agreed.

A recent case, Savvy Vineyards 3784 Limited v The Arck Limited, highlights two particular issues:

  • The danger of not complying with strict contractual terms particularly with regard to timeframes, and
  • The readiness of the court to use email correspondence as evidence of the intention to create contractual relations.

The case was about a number of matters in dispute. The critical issue, however, was whether or not Savvy had exercised an option to purchase grapes from Arck. Savvy and Arck had an agreement which, amongst other things, contained a right of first refusal for Savvy to purchase the entire or any part of the entire crop of grapes from Arck for the next three years. In order to exercise this right of first refusal, notice had to be given by Savvy to Arck by a particular date. It was accepted in evidence that whilst Savvy had prepared its notices to exercise its option there was no record of those notices ever having been sent. Accordingly, when a dispute arose between the parties, Arck tried to rely on the non-service of the notices to avoid any obligation to supply grapes to Savvy.

Problems can arise with long-term contracts

The case does show, however, the problems that can arise in long-term agreements. The agreement in question had an initial term of 10 years and had two rights to extend the agreement for two further terms of 20 years each, giving a contract term of up to 50 years. Over that period of time, personnel and/or landowners would almost certainly change and, at the very least, the specifics of contracts entered into years ago can start to fade in the memory.

All terms of a contract will become important at some time or another, but missing deadlines for notices can have a potentially devastating impact. Some contracts will have a ‘time is of the essence’ phrase in a clause requiring a party to do something by a particular time, which makes it clear that if the timeframe is not met then they may not have a second chance. Examples of critical options or time periods that should be remembered are:

  • Notices to exercise options to purchase
  • The ability to terminate, or end, a contract early or to prevent it rolling over
  • Rent reviews, and
  • Renewals of leases, or supply or purchase agreements.

These days most people will have electronic calendars that they may or may not use. If you are entering into any contracts with lengthy terms and critical time periods, then it’s most important to not only note the date by which the notice needs to be sent, but also make a reminder some weeks before that a critical date is coming up.

Emails can be used as evidence

The other interesting point about the Savvy case is the issue of the email correspondence between the parties being used to determine that a concluded contract had been made. Emailed communication tends to be conversational and often conducted with less thought than would go into formal written communication.

When you’re dealing with contractual issues by email you must be aware that any emails you send can be saved and used as evidence in any subsequent dispute. These days it’s easier for parties either to inadvertently give up legal rights or be held to have concluded a contract when perhaps they had not intended to do. The motto here is think before you email.

Savvy Vineyards 3784 Limited v The Arck Limited [2015] NZCA 534

Related Articles

  • Auckland
  • Bay of Plenty
  • Canterbury
  • Coromandel
  • Gisborne
  • Hawke's Bay
  • Kapiti Coast
  • Manawatu - Wanganui
  • Marlborough
  • Nelson
  • Northland
  • Otago
  • Southland
  • Taranaki
  • Waikato
  • Wairarapa
  • Wellington
  • West Coast

Simpson Western

Simpson Western is a leading law firm in Auckland North, with offices in Takapuna and Silverdale.

The firm has ten partners, supported by a team of specialist lawyers, legal executives and a general manager, together with a team of excellent support staff.

Region: Auckland

Phone: 09 486 3058

Rejthar Stuart Law

A long established law practice providing comprehensive and specialised legal advice and services to a diverse range of commercial and private clients.

Established in 1997 the firm has grown over the years to become a two solicitor, two legal executive firm representing both private and commercial clients.

Region: Bay of Plenty

Phone: 07 577 6565

Argyle Welsh Finnigan

Argyle Welsh Finnigan is a leading law firm in Ashburton,  the town servicing mid Canterbury, New Zealand.

The firm employs a team of over 25 legal professionals, including three Senior Associate Solicitors, three Staff Solicitors and five Legal Executives.  Our firm provides quality legal services with a commitment to our clients and to understanding their individual needs and requirements. 

With more than one hundred years of combined legal experience, we are able to offer prompt and professional advice on a wide range of legal matters.

Region: Canterbury

Phone: 03 308 8228

Purnell Lawyers

There is nothing as inevitable as change. Since opening for business early last century, we at Purnell Lawyers have seen many changes both in name and in the people who have made up the members of our team. We have been privileged to have served the public throughout all of these times. 

We are confident that we will continue to bring top quality legal services to our clients well into the future.

Region: Coromandel

Phone: 07 868 8680

Woodward Chrisp

At Woodward Chrisp we strive to meet the needs of our clients by providing a wide range of high quality legal services within a supportive and collaborative environment.

Woodward Chrisp is the amalgamation of two long established Gisborne legal firms: Woodward Iles & Co and Chrisp and Chrisp. Today’s partners are Ross Revington, Adam Simperingham, Jeff Allen and Ellie FitzGerald.

Region: Gisborne

Phone: 06 869 0900

NZ LAW Limited

NZ LAW Limited is an association of independent legal practices with member firms located throughout New Zealand. There are currently 53 member firms practising in a wide range of legal disciplines ranging from business law, home buying and selling, immigration law and intellectual property to aviation law and viticulture.

The group was established in 1992 when about five law firms met in Auckland to find a way to benefit their clients by replicating the conviviality and the sharing of ideas and expertise that occurs in larger law firms, but still be able to retain client confidentiality and their own independence.

Region: Hawke's Bay

Phone: 06 835 5299

BMC Lawyers

BMC lawyers has built a reputation for providing quality service and delivering real results. Our strength is our broad-ranging legal experience that gives us the ability to match clients with the right mix of legal skills for their particular needs.

Our legal professionals are passionate about what they do and work alongside a talented team of support and administration staff to make a real positive difference to our clients.”

Region: Kapiti Coast

Phone: 04 296 1105

Horsley Christie

Horsley Christie is a successful law firm based in Whanganui which offers a diverse range of legal services to the Whanganui Region and beyond and has done for over 100 years.

When you deal with Horsley Christie you do so in the knowledge that the firm is one of many law practices nationwide who are members of NZ LAW.

Region: Manawatu - Wanganui

Phone: 06 349 0090

Wain & Naysmith

Based in Blenheim, Wain & Naysmith Lawyers is a full service law firm, and a powerhouse for property, family and business law.

We pride ourselves in providing clear and cost effective legal solutions and practical advice for you, your family and your business.

Region: Marlborough

Phone: 03 520 6103

Knapps Lawyers

As a firm, we promise to look after you and treat you in a manner that we would expect to be treated by a professional services provider; we promise to use every available legal remedy available to us to resolve your issue and to do what you ask us to do in a timely manner.

We will hold in strict confidence all information that we acquire through our work for you and which concerns your business or personal information.  The only exceptions are where you authorise us to disclose such information or where we must do so by law.

Region: Nelson

Phone: 03 544 7888

Thomson Wilson

Thomson Wilson is a full service law firm based in Whangarei. We’ve been trusted lawyers for the Northland community and beyond for 75 years.

We act for individuals and families, businesses, public sector and other organisations. Whether you need no-fuss advice on a simple matter, or a team of legal experts. 

Our staff provide advice in most areas of the law, including property law, business law, trusts and estates, separation and divorce, resource management, criminal law and more.

We also offer expertise in specialist areas such as Maori land, local government law, farming and forestry.

Region: Northland

Phone: 09 430 4380

Sumpter Moore

Sumpter Moore is based in South Otago and has a proud history of having provided a broad range of legal services to personal clients and businesses since 1873. Generations of families have been able to rely on our advice and assistance, because Sumpter Moore has stood behind that advice for over 100 years.

Sumpter Moore has fully serviced offices in both Balclutha and Milton, our relatively small size means we can work closely with our clients and you know who will be personally responsible for your legal affairs. It allows us to have close control over the quality and timeliness of the advice you receive.

Region: Otago

Phone: 03 418 0066

Sheddan Pritchard Law Ltd

Incorporating traditional values and a fresh perspective, Sheddan Pritchard Law is here to assist you with all your legal needs. 

Our friendly and team-driven approach underpins our firm’s values, recognising the importance of putting people first and allows us to connect and nurture professional relationships with new and existing clients within our local community of Gore, as well as throughout New Zealand and extending overseas.

Region: Southland

Phone: 03 209 0030

RMY Legal

Having been a cornerstone in the New Plymouth and Taranaki legal community since the 1930s we offer in-depth knowledge coupled with legal expertise and always put the needs of you and your business at the heart of what we do.

Not only do we offer a first class service to clients throughout Taranaki, we are passionate about what we do and our success stems from delivering advice in clear and understandable terms.

Region: Taranaki

Phone: 06 769 8080

Edmonds Judd

Edmonds Judd is based in Te Awamutu with an office in Otorohanga and continues to proudly serve the Waikato District as it has done for over 100 years. Known as a firm that generations of families have relied on and looked to for advice and assistance in both the good times and the bad, Edmonds Judd is the friendly and trusted name in legal services. Blending experience with cutting edge technology, which is rivalled only by the level of service and satisfaction which is provided to its loyal clients. Edmonds Judd’s friendly staff are more than happy to assist you in any enquiry you may have.

We will provide you with:

  • Smart and innovative legal thinking
  • Plain and simple language, instead of legal jargon
  • Decades of knowledge and broad perspectives from our widely experienced team
  • Access to the resources and skills of the NZ LAW group that Edmonds Judd is a member of.
  • You’ll have the knowledge of over 55 independent law firms behind you.

Region: Waikato

Gawith Burridge

Gawith Burridge traces its history back to 1875 when Charles Gawith first set up his practice. Since then the firm has undergone many changes, including a merger between Gawith & Co and Burridge & Co in 1998 to form our current practice.

Our firm draws on the breadth of expertise available from some of the region’s most senior legal practitioners, as well as the skills of those who have moved here from larger corporate environments.

As a result, we provide clients with a comprehensive range of legal services right here in the Wairarapa. We can provide you with legal assistance whether you are an individual or a company, with everything from setting up a Will to selling your farming business. 

Region: Wairarapa

Phone: 06 370 0000

Gillespie Young Watson

We specialise in Property, Commercial and Trust Law. When it comes to law firm size we are bigger than smaller and smaller than big. By limiting the work we do to our specialist areas, we like to think we bring together the best of big firm skill sets with the personal care, attention and relationships of small firms.

We expect our clients to receive clear, practical and timely advice. We place a premium on accessibility and convenience to our clients. We value and appreciate all of our clients and want to do the best possible job for each of them. When we close a file we want the client to feel they have received exceptional advice, service and value.

Region: Wellington

Phone: 04 569 3997

Hannan & Seddon

The Law Firm of Hannan & Seddon dates back to September 1867.

The firm's offices were in Werita Street from 1867 until 1982 when the firm moved to Tarapuhi Street and then to its current spacious premises at 61 Guinness Street in 1998.

The name Hannan comes from Mr Michael Hannan whose son John Hannan (Jack) joined the firm in 1908. Jack Hannan remained in partnership until he passed away in 1974 at the age of 90!

The name Seddon comes from Mr T E Y Seddon (son of Premier Richard John Seddon from Kumara) who joined the firm in the 1920's. The other prominent Solicitor at Hannan & Seddon was Cyril McGinley who joined the firm in the late 1920’s and retired as a Consultant in 1997 aged 87.

Currently we have two Partners within our firm. Tony Sullivan who has been with us for 29 years and Colin Smith, 26 years. The firm also has two long serving Legal Executives Elaine Knowles and Beverley Walsh.  

Region: West Coast

Phone: 03 768 4169

All the information published on this website, or in any article herein is true and accurate to the best of the authors' knowledge. Information on this site should not be a substitute for legal advice. No liability is assumed by NZ LAW Limited, or individual NZ LAW member firms for losses suffered by any person or organisation relying directly or indirectly on information published on this site. Views expressed in any article are the views of the authors individually and do not necessarily reflect the view of NZ LAW or their member firms. Information appearing on this site may only be reproduced with prior approval from NZ LAW Limited Head Office, and credit being given to the source. © NZ LAW Limited