Application of the Construction Contracts Act

The Act applies to every construction contract carried out in NZ that is entered into after April 2003 regardless of whether the contract is written, oral or partly written and partly oral.

It applies to both commercial construction contracts and residential construction contracts although its application to residential construction contracts is somewhat restricted.  The provisions of the Act in respect of default provisions for payment, suspension of works, charging orders and other measures to secure payment do not apply to residential construction contracts.

It does not apply to construction contracts under which a party is essentially an employee (s11a) or where the construction contract contains terms which provide that the work is being carried out as a condition of a loan agreement or as a way to lend or guarantee money (s11b).

Parties cannot contract out of the Act and any attempt to do so in a particular construction contract will not be enforceable.

 Parties cannot contract out of the Act