Too Many Or Too Few Goods Delivered: What NZ Supply Contracts Should Say

When a business receives the wrong quantity of goods, the right response is rarely as simple as paying for whatever turned up or sending everything back. Under New Zealand law, the starting point is usually the sale contract, then the default rules in the Contract and Commercial Law Act 2017. Those rules draw an important distinction between a short delivery, an excess delivery, and a delivery that mixes the right goods with goods of a different description.

That distinction affects whether you can reject all of the goods, keep only the conforming part, or accept what arrived and pay at the contract rate. It also matters how quickly the goods are checked, whether your conduct looks like acceptance, and what your contract says about tolerances, substitutions, and warehouse procedures. The practical task is to separate the receiving decision from the wider commercial dispute so your business does not accidentally give up useful options. This article is general information only and is not legal advice.

What Difference Does The Type Of Delivery Problem Make?

The first question is not whether the delivery is inconvenient. It is what kind of mismatch has actually occurred.

The Contract and Commercial Law Act 2017 section 164 treats three situations differently:

• a short delivery, where fewer goods arrive than the seller contracted to sell
• an excess delivery, where more goods arrive than the seller contracted to sell
• a mixed-description delivery, where the contracted goods are mixed with goods of a different description not included in the contract

That matters because the buyer's options are not identical in each case.

For a short delivery, section 164(1) allows the buyer to reject the goods. If the buyer accepts the short-delivered goods, the buyer must pay for them at the contract rate.

For an excess delivery, section 164(2) gives three choices. The buyer may accept the quantity covered by the contract and reject the rest, reject the whole delivery, or accept the whole delivery and pay for all of it at the contract rate.

For mixed-description goods, section 164(3) allows the buyer to accept the goods that comply with the contract and reject the rest, or reject the whole delivery.

These are default rules, not fixed results in every supply relationship. Section 164(4) makes them subject to any usage of trade, special agreement, or course of dealing between the parties. In practice, a supply contract may alter how shortages, over-deliveries, substitutions, packaging variances, split pallets, or recounts are handled.

What Are Your Options If The Delivery Is Short?

A short delivery means you received less than the contract quantity. The law does not force you to accept a partial shipment simply because some of the order arrived.

You may reject the goods that were delivered. That can matter where the shortfall affects production, onward sales, pricing, or a time-critical customer commitment.

You may also choose to accept the goods that did arrive. If you do, section 164(1) says those accepted goods must be paid for at the contract rate. Acceptance of the partial quantity does not automatically let the buyer reprice the units kept.

That does not answer every commercial consequence. The contract may deal with whether partial delivery is permitted, whether time is essential, whether the seller can cure the shortfall, or whether the buyer can source missing goods elsewhere and claim the difference. Those are contract and damages questions, not automatic outcomes under section 164 by itself.

What If The Supplier Sends Too Many Goods Or The Wrong Goods?

An excess delivery raises a different issue. Your business may not have storage space, budget approval, insurance cover, or customer demand for the extra stock.

Under section 164(2), the buyer may:

• accept the quantity included in the contract and reject the rest
• reject the whole delivery
• accept the whole delivery and pay for all of it at the contract rate

You should not assume silence gives you free stock. If you keep and use extra goods, or simply retain them without clearly rejecting them after a reasonable time, the supplier may argue that you accepted them.

Mixed-description goods are different again. This is where the seller delivers the contracted goods mixed with goods of a different description that were not ordered. Section 164(3) allows the buyer to accept the conforming goods and reject the rest, or reject the whole delivery.

This often matters where the carton count looks correct but the stock keeping units, sizes, colours, model numbers, or specifications do not match the order. A warehouse record can say a shipment is complete while still missing the actual goods required under the contract.

For both excess and mixed-description disputes, a supply agreement should ideally say whether substitutions are allowed, what quantity tolerances apply, and how invoice adjustments or credits are handled. That reduces uncertainty, but no document can guarantee there will never be a dispute.

Can A Contract Change These Default Rules?

Yes, and that point is central.

The statutory rules are subject to trade usage, special agreement, and the parties' course of dealing. If the parties have agreed on delivery tolerances, dispatch practices, substitute products, receiving procedures, or cure rights, those arrangements may modify the default position.

Well-drafted product supply terms often address matters such as:

• whether quantity variances are allowed
• how and when deliveries are counted
• whether pallet or carton counts are provisional only
• who bears recount, unloading, or collection costs
• how rejected stock must be identified and stored
• whether the seller can send a replacement before rejection becomes final

Course of dealing also matters. If both sides have repeatedly operated on a particular tolerance or substitution practice, that history may affect how a later dispute is viewed.

A sensible contract can also help avoid accidental acceptance by saying that a signature on delivery acknowledges physical receipt only, not final acceptance after inspection. That is useful because signing a docket is not automatically conclusive in every case.

When Are Goods Treated As Accepted?

Acceptance is one of the biggest risk points after a disputed delivery.

Section 169 says that where goods are delivered without the buyer previously examining them, the buyer is not treated as having accepted them unless and until the buyer has had a reasonable opportunity to examine them to see whether they conform with the contract. Unless otherwise agreed, the seller must also give a reasonable opportunity to examine the goods on request when delivery is tendered.

Section 170 then says a buyer is treated as having accepted goods when any of these things happens:

• the buyer tells the seller the goods are accepted
• after delivery, the buyer does an act inconsistent with the seller's ownership
• after a reasonable time, the buyer keeps the goods without indicating rejection

Section 170 also makes clear that the second branch does not apply where section 169 says the buyer has not yet had a reasonable chance to examine the goods.

In practice, businesses should be careful with conduct that may look like acceptance. Reselling, relabelling, consuming, installing, combining the goods into production, or releasing them into active stock can make the buyer's position harder.

The safest internal approach is simple: receipt is not the same as acceptance. Count the goods, inspect them promptly, quarantine disputed stock where possible, and send a specific written notice while the issue is still fresh.

Do Rejected Goods Have To Be Sent Back?

Not automatically.

Section 171 applies where the buyer refuses to accept delivered goods and has the right to refuse them. Unless otherwise agreed, the buyer is not bound to return the goods to the seller. It is enough to indicate to the seller that the goods are refused.

That does not mean doing nothing is wise. As a practical control, rejected goods should be clearly identified, kept separate where possible, and held securely while collection arrangements are sorted out. Those steps are operational safeguards, not a separate statutory procedure.

Your contract may also deal with freight, collection windows, return authorisations, or handling costs. If it does, follow that process. If it does not, clear written communication will matter.

A Worked Example Of A Short Plus Mixed Delivery

Suppose a business orders 500 units of Product A at $24 per unit. The total contract value is $12,000. On arrival, the receiving team checks pallet labels, carton counts, and SKU codes against the purchase order.

After unloading and reconciling the stock, the team finds:

• 480 units are the correct Product A
• 20 units are Product B, which was not ordered

On those numbers, the delivery is not an oversupply of Product A. It is a shortfall of 20 units of Product A combined with 20 mixed-description units.

The receiving record should be precise. Record the date and time, carrier details, purchase order number, pallet or carton identifiers, SKU codes, photographs of labels, and who performed the count. If the first count was limited to outer packaging only, note that and record the later unit reconciliation.

The notice to the supplier should be equally specific. For example, it could:

• state that the order was for 500 units of Product A at $24 each
• confirm that 480 units of Product A appear to conform to the order
• identify that 20 units of Product B do not conform to the order description
• state clearly whether the buyer is accepting the 480 conforming units and rejecting the 20 non-conforming units, or rejecting the whole delivery
• request collection instructions for any rejected stock

If the buyer accepts the 480 conforming units, the amount payable for those accepted goods at the contract rate is 480 multiplied by $24, which is $11,520.

If the buyer instead rejects the whole delivery, the notice should say that clearly and avoid conduct that could later be treated as acceptance.

This example shows why accurate counting matters. A vague message such as saying the delivery is wrong without stating the count, product codes, and acceptance position creates unnecessary room for argument. The legal category should match the actual numbers.

What If The Contract Uses Instalments Or Ongoing Supply?

One defective shipment does not automatically end the entire relationship.

Unless otherwise agreed, a buyer is not bound to accept delivery by instalments. Where there is a contract for goods to be delivered in stated instalments and paid for separately, section 166 says that whether a breach amounts to repudiation of the whole contract, or only a severable breach, depends on the terms of the contract and the circumstances.

That means a short, excess, or mixed-description delivery in one instalment may justify rejecting that instalment without necessarily giving a right to treat the whole contract as over. If your supply arrangement involves staged deliveries, release orders, or rolling replenishment, the contract should say when repeated delivery failures become serious enough to suspend orders, source elsewhere, or terminate. That is usually a point for tailored advice rather than assumption.

Frequently Asked Questions

Is Signing A Delivery Docket The Same As Accepting The Goods?

Not necessarily. A signature may show receipt, but sections 169 and 170 mean acceptance also depends on whether the buyer had a reasonable opportunity to examine the goods and what the buyer does next.

Can A Buyer Keep Extra Goods Without Paying?

You should not assume that. If the buyer accepts an excess delivery, section 164 says the goods accepted must be paid for at the contract rate. Keeping goods without clearly rejecting them can also support an argument that they were accepted.

Can Part Of A Delivery Be Rejected And Part Kept?

Often yes, but it depends on the problem. Excess and mixed-description deliveries expressly allow partial acceptance and rejection under section 164.

Short delivery is different: the buyer may reject the goods delivered, but if the buyer accepts them, those goods must be paid for at the contract rate.

Do Rejected Goods Need To Be Physically Returned By The Buyer?

Where the buyer has the right to refuse the goods, section 171 says that indicating refusal is sufficient and the buyer is not bound to return them, unless otherwise agreed. Check the applicable return terms before relying on that default.

Key Takeaways

• New Zealand law treats short delivery, excess delivery, and mixed-description delivery differently, so the first step is identifying the correct category.
• For a short delivery, the buyer may reject the goods, but if the buyer accepts them, they must be paid for at the contract rate.
• For an excess delivery, the buyer may take the contracted quantity and reject the rest, reject the whole, or accept all and pay at the contract rate.
• For mixed-description goods, the buyer may accept the conforming goods and reject the rest, or reject the whole delivery.
• These default rules can be changed by trade usage, special agreement, or course of dealing, so the contract and past practice matter.
• Signing for delivery is not automatically final acceptance. Reasonable examination, prompt inspection, and clear notice are important.
• If the buyer validly rejects goods, return is not required unless the contract says otherwise, but secure segregation and clear collection arrangements remain sensible.
• In instalment arrangements, one faulty shipment does not automatically end the whole contract.

If your business needs help with supply terms, purchase order conditions, receiving and rejection procedures, or an ongoing delivery dispute, Sprintlaw's legal team can help. Call 0800 002 184 or email team@sprintlaw.co.nz.