superuser  Feb.24.2015

Contracts don’t need to be written down to be enforceable. (There are some exceptions to this rule – including contracts to buy and sell land and employment agreements  – they do need to be in writing.) Most of us enter numerous contracts every week where we don’t write down the exact terms of our agreement. For example, every time you buy a bottle of milk from the dairy you are entering a legally enforceable contract.

In most cases, that’s fine. You get the milk you want. The dairy owner gets the money and everyone’s happy.

Sometimes though, it’s not quite that simple. What if the milk is past its best-before date? Did you specifically agree that the milk was going to be drinkable? Are you entitled to a refund?

In most situations where a consumer is buying a product or service from a person in trade, a whole series of terms are implied into the contract by law. Some of these laws include the Consumer Guarantees Act and the Fair Trading Act. So yes, there is a term in your contract with the dairy owner that the milk is fit for purpose (this comes from the Consumer Guarantee Act). That Act also gives you – the consumer – some remedies if the trader has not complied with one of the guarantees that are implied by law.

Contracts to buy milk from the dairy rarely create problems. 

It's a bit different when you're purchasing (or selling) more expensive goods or services. In that case, having a written agreement is almost invariably a good idea.

The terms that are implied by the general law (such as the Consumer Guarantees Act) do not cover:
- What you are buying?
- How much you are buying it for?
- Precisely what is included within that price?
- When you will get it?
- What quality will it be? (There are some generic provisions that deal with that – it needs to be of reasonable quality – but that is not as useful as that in practice)
- Exactly who are you buying it from? An individual? A company?

When you are paying a large amount of money for goods or services, it’s worth taking the time to answer these sorts of questions with the supplier. The same applies for the supplier.

It’s hard enough to get your money back, or to get a faulty product or service fixed in any case. Don’t make it harder by having to rely on your memory of what was agreed.

To make your life easier, we have prepared a simple contract checklist that you can use when entering into a higher value contract. It will help you make sure that all the key terms are covered off in the written agreement. Please contact us at info@ycu.co.nz for a copy.