Electronic Transactions (Contract Formation) Amendment Bill

I am very glad that we have made such good progress on the Electronic Transactions (Contract Formation) Amendment Bill this evening, and I do want to thank my colleagues all around the Chamber for the goodwill with which they have responded to this piece of legislation.

We come to clause 5. This is another area where the Commerce Committee saw fit to amend the bill quite substantially. In truth, that reflected some of the submissions. My original bill dealt with the problem that we were trying to deal with, which was trying to clarify the law in this area by introducing a section 32A to the Electronic Transactions Act, and that would have said—it was just a simple section 32A—“An offer that can be accepted by electronic communication is deemed to be accepted at the time of receipt of the acceptance by the offeror.” That was, I thought, a simple and elegant way of getting it across.

But the concern raised by some of the submissions was that this could create a misapprehension that a hard-wired rule applies and that an offer can be deemed to be accepted electronically only at the time of receipt. That, indeed, was not what I was trying to achieve. The suggestion was to abandon the section 32A approach and instead insert a new section 13A into the Act and to make it clear that this was a default rule instead of a rigid approach, from which the parties would be able to contract out.

So now we see here that clause 5 of the bill introduces: “13A Time of communication of acceptance of offer (1) For the purpose of the formation of a contract, an acceptance by electronic communication of an offer is taken to be communicated to the offeror at the time determined by section 11 to be the time of receipt for that electronic communication.” But, importantly, we now have a new subsection (2): “Subsection (1) does not apply if—(a) the parties to the contract otherwise agree; or (b) an enactment provides otherwise.” I think this makes it very clear that the time of receipt referred to in section 11 also applies to the acceptances of contract offers that are communicated electronically, and that is the essential point of this bill.

Again, in response to submissions, the suggestion from the select committee was to add a new section 13A(2), which I just referred to, enabling parties to agree otherwise—that they may want some other formation. Interestingly—

💬 Tim Macindoe: Did they consult the member about why they were recommending that?

They did not consult me at all, but I think the basic logic of that stands. Interestingly, that change that the select committee brought through nicely dovetails with my next member’s bill in the ballot, which is all about freedom of contract over an employment contract. So that fits very nicely with my principles for people to arrange their contracts as they see fit and have them be enforceable.

What we have as a result is a facilitative Act that ensures that negotiating parties are free to specify their own mutually agreed conventions. But in the absence of that, everybody knows the rules around when a contract is formed and when it is not. So, as I said at the start, although this bill on its own will not bring about the brighter future to which we all aspire in this Chamber and on this side, in our party, it does add one small piece to the jigsaw that draws together that coherency, consistency, predictability, and certainty in our legal framework, which underlies the strong economic foundations of New Zealand. That is why, in the broader context of a strong, stable, and predictable Government, it has been so successful as a Government over the past 5 years. I want to finish the debate on this bill by paying tribute to the Prime Minister and all the good work that he is doing in this country. Thank you.

Clause 5 agreed to.

Bill reported without amendment.

Report adopted.