Codes, Contracts, and Commerce: Taking the Heat Out of the Contractual Mistakes Act

Abstract

Is the Contractual Mistakes Act 1977 of the New Zealand legislature a code? The fiercest of controversies rages over this question and its corollaries in the law reviews of its own domestic jurisdiction. The Act is so described as a code by the marginal note to section 5 of the Act, but not at all by any substantive provision of the Act. Of course, this issue of what constitutes a code becomes more and more of a question, in both theory and practice, as Civil Law concepts-to which Commonwealth countries such as New Zealand are no longer immune-overtake, if not overthrow the traditionally less textually structured and more juristically open-textured legislation of the Common Law. This Antipodean case study could have global consequences for contract at all levels of the Common Law. Could the New Zealand legislature be mistaken, and in consequence misleading, as to the concept of a code? Code is not a word to be used lightly, least of all by common lawyers. Common law, being a customary and open-ended legal system, leans towards the consolidation of existing law rather than towards creating and upholding codes. Common law legislatures have generally exercised caution in closing off any branch or division of the common law by the construction of definitively complete and independent codes. So too, the sacred principle of stare decisis, with its distinction between ratio and obiter, operates against confinement by the common law. Common law systems-as with the judicial review of legislation in the United States-invariably break free of any such legislative confinement. Towards statutes which, but for an equitable construction, would become engines of fraud or perpetrators of injustice, equity is no less expansive. In this wider context, what is the legislative status of the Contractual Mistakes Act 1977 when claimed to be a code, and how will the Act be at variance with those who deny, denigrate, or reduce the forcefulness of that claim to the status of a code at common law? Could the answers lie in a better understanding of Comparative Law?