14 July 2017
Often parties talk about renewing or extending an existing contract, but actually sign a new contract that replaces the earlier one. The facts of a recent case involving Air NZ highlight the difference and demonstrate how that might impact the parties' obligations to each other.
The 2011 Contract
Air NZ entered into a 2 year contract in May 2011 with the owner of the Novotel Citygate Hotel in Hong Kong for the supply of hotel accommodation for Air NZ cabin crews. Under the 2011 contract, it was agreed that the Novotel would not charge for early check-ins or late check-outs where the crew schedules allowed back-to-back bookings.
Air NZ's flight schedules then changed, meaning that back-to-back bookings were no longer possible. After discussions, the parties agreed (without formally amending the contract) that early check-in and late check-out fees (an additional night's accommodation) would be payable. Those fees were invoiced and paid for the remainder of the 2011 contract.
The 2013 Contract
The parties discussed the renewal of the 2011 contract as its expiry date neared. Novotel proposed an increase in its rates which prompted Air NZ to undertake a market review. Eventually agreement was reached between the parties on the rates that would apply from June 2013. The issue of early check-in or late check-out fees was not discussed and the language used by the parties throughout referred to the renewal or extension of the 2011 contract.
In practice, Air NZ tabled a new contract, which was altered in some respects by Novotel before being signed by both parties. The 2013 contract stated clearly that Novotel would not charge for early check-ins or late check-outs.
Importantly, the 2013 contract also contained a relatively standard contractual provision known as an "entire agreement clause", which stated that "the contract represented the entire agreement between the Parties with respect to the supply of Hotel Accommodation and supersedes all prior agreements and understandings between the parties in connection with it".
The Dispute
Despite the provisions of the 2013 contract, Novotel continued to invoice Air NZ for early check-ins and late check-outs and Air NZ paid the invoices without question throughout the term of the 2013 contract. Air NZ realised its error shortly after the expiry of the 2013 contract and claimed HK$7,603,110 (approximately NZ$1,415,000) in overpaid fees from Novotel, leading to the court case.
The Court's Decision
The NZ High Court held that, while the additional charges had been payable under the 2011 contract, the 2013 contract was a new contract and not a continuation of the 2011 contract. The renewal terminology used by the parties in their discussions did not override the form of the 2013 contract that they signed, which clearly stated on its face that it was a new contract. The Court held that it was equally clear that Novotel had no entitlement to charge these additional fees under the wording of the 2013 contract.
Novotel argued that Air NZ was "estopped" from recovering these payments on various grounds, including that Air NZ's behaviour in paying the fees or its silence amounted to a representation that these amounts were payable, making it unconscionable for Air NZ to now recover these payments. Those arguments were rejected by the Court, which held that Air NZ's conduct in making these payments was not sufficiently clear to amount to a variation of the agreement or to create an estoppel. Significantly, because Novotel had no entitlement to be paid these sums under the 2013 contract, the Court held that Novotel had not altered its position in reliance on Air NZ's actions.
The Court held that Air NZ had made a mistake in making these payments. It seems that the person responsible for processing the invoices was not made aware of the changes in the 2013 contract and so had simply assumed these charges continued to be payable. However, the Court held that any carelessness on Air NZ's part did not affect its right to recover the amounts that Air NZ had overpaid to Novotel (although it did restrict the period for which Air NZ could recover interest on the overpaid sums).
Key Points for Your Business Contracts
So what are the key points for a NZ business to take from this case when contracting with its customers or suppliers?
- It's critical to carefully review any contract (including the schedules) to ensure that it reflects the deal you expect to do. Here, the Court concluded that the parties were sophisticated commercial entities and held them to the clear wording of the contract they had signed.
- A new contract is likely to be just that and not a renewal of your earlier contract. That distinction could be significant if there are practices or arrangements that have developed during the course of your earlier contract that aren't reflected in the terms of the new contract.
- Use the contractual processes to formally record variations to your contracts when the parties agree to depart from the position initially agreed in the contract. In the Novotel case, Novotel may well have identified that the 2013 contract did not allow it to charge these fees when it compared the 2013 contract against its 2011 contract if the earlier contract had been varied to reflect the changes agreed by the parties.
- The "boilerplate" (or common legal provisions at the back of a contract) are important and can have a significant impact on the parties' legal obligations. In this case the "entire agreement" provision played a pivotal role. The fact that the case was heard in the NZ courts also indicates that Air NZ's standard form contract provided for NZ law to govern and disputes to be resolved in NZ, which can be an advantage if you end up in a dispute under a contract with a party in another jurisdiction.
3 March 2016
I’m sure many of you are tired of the flag debate. The process has been flawed. The committee lacked design expertise and many are disappointed by the candidates the committee has chosen. Red Peak was omitted and then reintroduced, only to fail to gain any real traction in the final vote. It’s costing $26m. And many see this as a vanity project for John Key.
There’s a lot of noise, but I don’t see much sensible discussion. I've found myself becoming irritated by some of the things being said on Facebook. But rather than reacting to a particular post, I decided to take some time to set out my thoughts here.
Obviously, everyone should feel free to choose the option that they like best. It’s a subjective question with no right or wrong answer. People need to be tolerant of others’ views.
We are where we are. We’re unlikely to get another chance to influence the choice of our flag any time soon, so don’t waste this chance. Don’t be distracted by the noise and rhetoric. Just take the time to really think about which option you like best. Which one would you like to see flying when a Kiwi wins gold at the Olympics later this year?
Ignore the fact that it cost $26m to get here. That money has been spent. We had no say in that decision. Not voting, or voting for a particular option as a protest, isn’t going to get that money back, so we might as well accept it and make the best decision we can.
It doesn’t matter what flag our grandfathers and great grandfathers fought under. Those wars are potentially as good a reason to change the flag as they are for keeping it. My great great uncle, Jim Ryan, captained the NZ Army side that won the King George V Cup in 1919. They beat the English side at Twickenham. This is him receiving the cup from King George himself. Jim is wearing a black jersey with a silver fern. He and his brother were All Blacks, too, so the Silver Fern might well’ve resonated with him. But I never met him. I don’t know what my ancestors would think about the referendum. No one does. And why speculate? Times change. What might have symbolized NZ then doesn’t necessarily still represent the multicultural country we live in today. You have to be alive and over 18 to vote on this one. It’s our decision to make.
I’ve even seen comments to the effect that flags are jingoistic symbols of arbitrary and inherently divisive national boundaries and that we shouldn’t define ourselves in this way. Where you’re born is simply a matter of blind chance. * Breaks into song * "Imagine there’s no countries, it isn’t hard to do…" Well, I would say Lennon was a dreamer. We live in this imperfect world. We do have countries. And it’s kind of accepted convention that each country has a flag. We now have a chance to choose ours. So I don’t see this as any reason not to choose or to choose one option over another.
For the purposes of this decision, it’s irrelevant what you think of John Key or his motives. In 10 years’ time, he’ll be fish’n’chip paper and we’ll still have whichever flag we choose now.
And there are a bunch of other distractions:
- Which one looks more like a tea towel? Personally, I wouldn’t have either one hanging off the oven in my kitchen.
- The designer lives in Australia. So?
- You liked Red Peak. Yeah, I did, too.
- It’s been our flag for over 100 years. Yep, it has. The question we need to decide, though, is whether it should continue to be our flag. Slavery was around for a long time, too. Longevity in and of itself isn’t a good reason for hanging onto something.
What am I going to vote for? The new one. I agree it’s not perfect. The blue is maybe too light. But I think it needs to be lighter than the current blue or it won’t work with the black. And is it just me or has the blue gotten darker since the first referendum? I think it looks good in its current iteration on the Bridge as I ride across each day.
I like that it introduces some black into our flag, given that is the predominant colour of the uniforms worn by our national teams. And I like that our teams wear black. It’s the best uniform colour. I feel sorry for our neighbours across the Tasman. Did you see the jerseys their Sevens team had to wear in Wellington? And imagine trying to wash the English rugby uniforms. The addition of some black and a Silver Fern mean the flag and our sporting uniforms would have some sort of link. I think that’s a good thing.
And, I agree with Richie’s sentiment (not just because Richie said it). The new one is more distinctively and recognizably ours. It doesn’t look almost identical to that of our nearest neighbour. And that’s the whole purpose of a flag.
I’m keeping this in perspective, though. You may like and want to hang onto our current flag. If so, I hope you go and vote that way. I won’t think any less of you. Unless, perhaps, if you’re doing so for any of the reasons set out above or because of any of the other nonsense floating around on Facebook…
We are where we are. We can’t change that. But we have a chance to decide something important. Not critically important, though. If my preferred option isn’t adopted, we’ll continue with the current flag and I’m ok with that, too. If that’s the outcome, I just hope it’s because people have given it some thought and made a decision based on which design is the best option for NZ’s flag for the foreseeable future.
And remember. A flag’s just one symbol. Countries are known for other things. So be nice to each other. I’d rather we were known for that.
PS: I've just spoken with some people who plan to vote for the existing flag in the expectation (hope?) that, if there's a no vote, they'll get another chance further down the track to choose a different flag that they like better. It's probably true that changing the flag means it will be harder to change it again. But this seems like a big gamble. I don't see any realistic chance that we'll get another opportunity to change the flag in the foreseeable future, except maybe if NZ were to become a republic. There's no certainty as to whether and if so when that might happen. The only sensible assumption is that a no vote means we'll be stuck with the current flag. Given the cost and opposition to this process, can you imagine how much harder it will be for anyone to get another flag referendum off the ground following a no vote?
15 January 2014
Marco Arment has taken a critical look at the privacy statements made by Nest Labs, Inc. following the announcement of its acquisition by Google Inc. (an announcement that has had a somewhat mixed reception).
Marco's post focuses on this FAQ in the Nest statement:
Will Nest customer data be shared with Google?
Our privacy policy clearly limits the use of customer information to providing and improving Nest's products and services. We've always taken privacy seriously and this will not change.
He rightly cautions against taking such a statement at face value; the statement's intended to sound reassuring, but doesn't actually answer the question posed or provide any real comfort to those concerned about the prospect of Nest's personal data being shared with Google.1 He concludes that:
Obviously, Google and Nest should be considered one entity with one product line and shared services in the future, regardless of whose name is painted on the front of the thermostat.
And that view is supported by the Nest privacy policy. Don't worry, we won't get too bogged down in the fine print - the very first line refers to:
what kind of information Nest Labs, Inc. and its subsidiaries and affiliates (collectively, "Nest") collects and stores
The significant piece is the phrase '(collectively, "Nest")'. It means that "Nest" is a defined term. Every time you read the word "Nest" in the remainder of the privacy policy, it covers not only Nest Labs, Inc., but also its subsidiaries and affiliates. Which, on completion of the acquisition by Google, will arguably include Google, Inc. So, when the privacy policy says (incidentally, using almost identical wording to the FAQ above):
How does Nest use the information it collects?
We use this information to provide and improve Nest Products and services...
that may shortly mean, "to provide and improve Nest *and Google* Products and services". And if Google's an affiliate, it won't be a third party for the purposes of the privacy policy. So sharing data with Google wouldn't breach the undertakings given by Nest about not sharing data with third parties.
Marco highlighted that Nest's privacy policy can be changed at any time. That's true, although not always as straightforward in practice as you might expect. However, it may not need to be changed at all in order for Nest to share personal data with Google. And that's something to bear in mind next time you're asked for consent to use your personal data - companies and corporate groups change all the time and the company you give your data to today might not be the company you're dealing with tomorrow.
1 November 2013
Harry Marks has set out some New Rules of Tech Journalism that, if adopted, would greatly improve the standard of tech news reporting.
It's an excellent list, but to my eye had one glaring omission:
16. Never take a survey at face value.
Before you blithely report the results of a survey under an attention-grabbing headline, check:
- • that your headline actually reflects the survey results - John Moltz has some great examples;
- • if the author might have a vested interest in the results - see these from Jon Gruber and Moltz;
- • whether the results of the survey make sense - one from The Loop just yesterday; and
- • whether the survey has any merit whatsoever - Moltz again.
If for no other reason, you should do this for the good of John Moltz' blood pressure.
30 July 2013
What's the bet that someone at Apple is just itching to write a response clarifying why Bob Mansfield's no longer on the Apple Exec team? I can see it looking like this:
"There has been significant news coverage of the fact that Bob Mansfield is no longer going to be on Apple's executive team.
People have assumed that there's a story that hasn't been told, something to be read between the lines or that phrases we used were euphemisms.
To clarify; when we said "Bob is no longer going to be on Apple's executive team", what we really meant was: "Bob is no longer going to be on Apple's executive team".
And by saying that Bob "will remain at Apple working on special projects", what we really meant was: "Bob will remain at Apple working on special projects".
It's still the case at Apple that EveryBody loves Bob."
12 June 2013
In all the coverage of Apple's WWDC keynote address, the announcement of iWork for iCloud has barely been mentioned. Its announcement on the WWDC stage received a fairly muted response, too. Which is understandable, given the audience - it's not a developer-focused product.
Casey Liss1 on the Accidental Tech Podcast talks about how Apple "really came out swinging" at its competitors in the keynote and that, in the iOS 7 presentation, Apple seemed to see Microsoft and Windows 8 as more of a threat than Android.
I got the same impression from watching the announcement of iWork for iCloud - especially the emphasis placed on the ability to edit native Word files. It seemed like the iWork announcement was intended to be a shot across the bows of Microsoft, for whom the Office suite of products is still a core asset, rather than any sort of move to compete with the likes of, say, Google Docs and Google Drive.
I can't help but wonder if the iWork announcement isn't intended by Apple as some sort of counter punch to Redmond's move into computer hardware with the Surface.2, 3
UPDATE: Looks like I was right - 2 days after I wrote this, Microsoft announced Office Mobile for iPhone (the timing suggests that Apple took the chance to preempt Microsoft's announcement).
I very much doubt that it changes everything, but for different reasons than those given by John Moltz. I think Microsoft's missed a significant opportunity by releasing Office for the iPhone, but not the iPad - it's on tablets, not phones, where people are going to want to create Office documents.
It looks like Microsoft is sacrificing the ubiquity and relevance of Office in the interests of its new Surface tablets. Which looks an increasingly risky move on the back of news of a $900 million write down by Microsoft on unsold Surface RT stock.
26 May 2013
O2 recently changed the support for its broadband service to push you into contacting them via an online chat with an "O2 guru".
My experience of using this new system was a series of fairly unhelpful interactions.
Fortunately, though, O2 gives you the option to save the text of these chats. So, I'm able to share this example of a chat with a guru who was clearly trying (and failing) to manage multiple chats at the same time:
info: Welcome to O2. You're through to Guru Ellie-Mae.1 How can I help?
Me: We're having issues with our broadband - we seem to be having a number of short outages. We just had one a few minutes ago - we had no connection at all for a number of minutes.
Me: I contacted O2 via chat about this last week. The router stats were reporting high error rates and the guru changed a setting on the modem. It hasn't addressed the issue.
Ellie-Mae: Please don't worry I'll check that for you. Please give me your postcode.
Me: Sure. It's [redacted].
Ellie-Mae: Thanks. I've checked your postcode and I can see that you have excellent coverage in your area.2
Me: Ok. However, we are still having issues here - could it be our router?
Ellie-Mae: Can you try the O2 sim in any other O2 phone?
Ellie-Mae: It may be a router issue.
Me: [At same time] We seem to be at cross purposes. I'm contacting you about our broadband?
Ellie-Mae: Do you wish me to do a channel change for you?
Me: No - the guru did that last week. It didn't help.
Ellie-Mae: I'm sorry I mean broadband not mobile phone.
Ellie-Mae: Sorry my mistake.
Ellie-Mae: I think I need a break.
[2 minute pause in which I thought she had actually gone off on a break]
Me: Hello?
Ellie-Mae: Do you wish me to do a channel change for you?
Me: No - you asked me that 2 minutes ago. Someone did that for us last week and it didn't help.
Ellie-Mae: Do you wish me to send you a new router?
Me: I guess - if that's the next step.
Ellie-Mae: No problem, because you mentioned that you've tried the channel change.3
Ellie-Mae: Hi I'm Ellie-Mae. How can I help?
Me: Ellie-Mae, you're still on the chat with me. Perhaps you could just try doing one chat at a time?
Ellie-Mae: Please ignore the above its a system error. Can I have your security info.
Me: [supplied info]
Ellie-Mae: Thanks for the information. Please give me a few minutes while I check this for you.
error: Chat is unavailable.
Me: Hello?
error: Chat is unavailable.
error: Chat is unavailable.
error: Chat is unavailable.
info: Hold that thought. You're not connected yet.
And with that, the chat was dead. Which leads us to the learning points:
>> Turns out that an online chat isn't the best helpdesk solution to offer people who have a problem with their broadband connection.4 Which, let's face it, is the main reason you'd need to contact your broadband help desk.
>> The term "guru" doesn't always mean what you think it means.
>> One advantage of an old-school telephone call with a real person is that you at least know that you're the only person they're talking to at that time. I hadn't fully appreciated that before this exchange.
28 November 2012
Update 24 from the Pebble team landed Friday.
It's another interesting insight into the manufacturing process, but still doesn't clearly set out for backers when they can expect to receive their watches.
So, here's a short Q&A, with my best guesses based on what Pebble has outlined so far.
Will I have my Pebble for Christmas?
Not a chance, unfortunately.
Update 24 states that on the current schedule, Pebble won't start the product verification build (the final stage before mass production starts) until just before the end of December. And that doesn't leave any time to make, let alone ship, your Pebble before Christmas.
So when will manufacturing start?
It looks like full scale mass production will start in January 2013, based on the current schedule and provided that no issues arise in the second design verification build or product verification build.
It'll take 5 weeks to make the watches for Kickstarter backers, so manufacturing for the Kickstarter batch should then be finished around the end of February.1
And when will my Pebble be on my wrist?
The first watches could get to their owners in January and the last ones may not arrive until March, but my guess: most Pebbles for Kickstarter backers will reach their owners in February 2013.
This assumes that mass production will start in early to mid January and that it will take up to 2 weeks to ship your Pebble to you.
When your Pebble actually reaches you will depend on when it comes off the production line. That depends upon how early you placed your order - Pebble has said that they'll ship in the order that backers committed on Kickstarter.2 If you're really bored, you can go through the backer pages on Kickstarter to work out where you sit in the queue.
18 November 2012
I've backed the company that is developing the Pebble. That means I'll receive one Pebble, in black (it's this season's black, didn't you know?), once the watches are ready to ship.
The interesting question is, when will that be?
You see, Pebble smashed previous fundraising records on Kickstarter earlier this year, but has since missed its estimated September shiping date. A search on Twitter reveals there are many disgruntled backers who want to know when they can expect to receive their Pebble.
Some of this dissatisfaction is clearly due to backers misunderstanding the nature of KickStarter. The Pebble pitch looked like a pre-order arrangement. It wasn't. Backers weren't buying a Pebble, they were helping to fund the Pebble company's development of its product. Delays were always likely. Pebble initially hoped to raise only US$100,000 to make 1,000 Pebble watches. They received US$10 million with an obligation to deliver 85,000 Pebble watches to backers. That necessarily resulted in changes to manufacturing plans and justifies some delay.
But Pebble brought some of this on itself. Pebble's pitch video appeared to show a fully functional Pebble. It wasn't. It was an early prototype that was being updated by an external board (hidden in the sleeve of that red jumper).1 Pebble says its aim was to demonstrate how the product could be used so people would better understand it. But the voiceover referred to Pebble in the present tense and gave a potentially misleading impression of where Pebble was at in the development cycle. Whatever your views on the merits of that video, KickStarter has now changed its rules to ban such videos in future.
Pebble has also steadfastly refused to provide a revised estimate of when backers can expect to receive their watches. Pebble's founder tries to explain this stance on the Pebble Forums. Broadly, he argues that frequent updates on progress are an adequate substitute and that he can't provide a revised estimate until he knows it won't change. I don't agree. Having to give an estimated timeframe for delivery is part of life. Make it realistic, update it if need be, and be prepared to explain why if you end up missing it.
So when might we see our Pebbles?
Pebble still won't say, but its clear from the latest update that most backers won't have their Pebbles for Christmas. Good progress has been made, but it's mid-November already. Pebble says it has 2 weeks' design verification work, one more test run, and product verification still to complete. The SDK hasn't been released yet and that was originally going to be available one month before the estimated shipping date so developers had time to build apps for the new eco-system.
Technically, there's a slim chance that the first Pebbles could ship before Christmas if no issues arise at the design verification or product verification stages. But even if that happens, mine and many others' won't ship in 2012. Pebble has said that once it flicks the switch it'll be able to make 15,000 Pebbles a week. That means it'll still take nearly 6 weeks to make the 85,000 watches due to KickStarter backers and, unfortunately, I'm a long way back in that queue. And that probably means I won't see it 'til February.
Please don't get me wrong, though. I have no doubt that Pebble will deliver the watches. The Pebble that will be delivered is also going to be a better product than what was initially pitched (plus changes in iOS6 mean the Pebble will be able to access more data from an iPhone than was the case with iOS5 at launch). And Pebble is doing a lot of things right - both in the development of the product and in its communication with backers. Pebble does engage and its manufacturing updates are an interesting insight into the manufacturing process.
But backers shouldn't be left to guess when their Pebble might ship. To me, it looks like Pebble's founder isn't comfortable delivering bad news - if you're reading, Eric, backers are entitled to bad news as well as good (arguably even more so).
Pebble also waited too long to disclose that it wouldn't hit its estimated shipping date and how much it was going to miss by - that news was buried2 in an update in July and Pebble hasn't yet shifted from the line that we're sticking pretty closely to an aggressive timetable we put together at the end of May.
But by July Pebble had already built a pre-order site estimating delivery of post-Kickstarter watches in early 2013. Which suggests that Pebble knew then that it was looking at the very end of 2012 for first shipments to Kickstarter backers.
It's pure speculation, but I wonder now whether Pebble knew (or should have known) before the end of the KickStarter process that it couldn't meet its estimated date. If so, I think Pebble did its backers a disservice by not sharing that information while backers still had a chance to pull out.
Wednesday, 7 November 2012
You may be paying too much if you use an auto-renewal service for your antivirus software.
I received an email on Friday about the auto-renewal of my antivirus subscription and thought the price of £64.99 looked a bit steep. A quick check confirmed that the same product was selling for £10 less on the Symantic website and for nearly £25 less on Amazon.
Auto-renewal price
|
Norton web price
|
Amazon selling price
|
That's a big difference, and my immediate reaction was that customers who choose to set and forget an auto-renewal were being fleeced.
I called Symantec and, to be fair, they handled it well. They explained that renewal prices are automatically set at the list price for the relevant product, so may differ from the actual selling price at the time if there are discounts or third party offers. That's not an unreasonable position for them to adopt, and my story has a happy ending - Symantec matched the Amazon price and refunded me the difference.
But there must be a multitude of people who use an auto-renewal service and never check the price. If that sounds like you, you're likely to be paying well over the odds.
So, what are your options? Well, the simplest option is to turn-off auto-renewal. Sure, there's a risk that your antivirus definitions may become out of date if you forget to renew manually, but if Symantec's anything to go by, you should be notified both by email and by the product itself before your current subscription expires.
If you do prefer to use auto-renewal, make sure you check the price. If the price at renewal time is higher than the current selling price, you'll need to either call the vendor or cancel the auto-renewal and buy a new registration elsewhere. If your subscription has renewed recently, you may still be ok - Symantec allows products to be returned within 60 days of the purchase date.
Oh, all right. There is a third option and, in the absence of a comments section, I'd better add it myself: you could also buy a Mac. As I understand it, the prevailing wisdom is that antivirus software is not a necessity for Macs in the way it is with PCs.