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Avoid crossed wires by getting it on paper

Avoid crossed wires by getting it on paper

I was talking to my husband on Skype the other day, with Harriet the cat on my knee. We had a few communication difficulties with broadband interference that caused us to talk at cross purposes for a while. No worries, Harriet resolved that.

Now as we lawyers and all parents know, some of life’s most frustrating arguments go along the “he said/she said” lines. Judges often have to decide whose version of a story is the correct one. It’s one party’s word against another.

That’s why some legal documents are considered to be so important that they are required by law to be in writing and signed by the persons who will be bound by them: wills, contracts for the sale or disposition of land, mortgages or charges on land and guarantees of other persons’ debts spring to mind.

Other legal documents must just be agreed to in writing. For example, for a security interest in goods to be enforceable, it must be consented to in writing which could just be by exchange of emails (remember that if you want to enforce your retention of title clause – you’d better be able to show consent in writing and you have to register it on the Personal Property Securities Register if you don’t want any other person with a registered security interest to get it first).

But of course the majority of problems involve ordinary contracts – sale of goods, service agreements and other everyday issues. It’s bad enough arguing about what words are used, but it gets worse when there is a dispute about what each party’s expectations are.

There is an old (1871) court case called Smith v Hughes which deals with this – or does it? Smith was selling Hughes a batch of oats for his horses. The price was not in dispute. But Hughes refused to accept the oats on the grounds that they were new oats, not old oats (something to do with equine digestion I understand). One of the questions on appeal was whether Smith believed that Hughes either believed, or was under the impression, that he was contracting for old oats. Easy? Not at all – think about it!

Who knows what the other party has in mind? Ask any retailer. That’s why the Consumer Guarantees Act has 47 “reasonables” in it: often referring to the reasonable consumer, and sometimes to the reasonable trader.

The Consumer Guarantees Act, like most legal rights addressing the supply of goods or services, addresses the reasonable expectations of the parties. Whenever a statutory test has the word “reasonable” we know it is not referring to the person who is actually making the claim, but to a person acting reasonably in the same circumstances.

Even people who would normally consider themselves to be reasonable act unreasonably in some circumstances – either because they are inexperienced in those areas, or because they don’t take the normal amount of trouble to check out what they are buying into.

I think of the consumer in Canada who fitted big tyres on the back of his ute (against the advice of the tyre dealer) because he thought they looked cool. Then he complained they were defective when the different wheel sizes ripped the guts out of his differential.

If we had to go down the Smith v Hughes line, we would be in real trouble. Thank heavens for objective tests.

Must go now – Harriet wants me to fire up Skype so she can talk to Daddy. Who says cats can’t use technology?

Rae Nield is a solicitor specialising in marketing law. This article is intended for general information, and should not be relied on as specific legal advice. You should consult a lawyer for advice relating to your own specific legal problems. Rae Nield can be contacted at raenield@marketinglaw.co.nz.


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