These terms and conditions apply to contracts for goods and services from Prison Industries.

Terms and Conditions of Sale

Interpretation: In these Terms and Conditions of Sale ("Terms and Conditions") a reference to a paragraph number is a reference to a paragraph in Schedules "A" or "B", unless otherwise specifically stated or unless the context requires otherwise.

Goods and Services and Fees

1. The parties have agreed upon an arrangement whereby the Department, at the location / prison identified in paragraph 1 ("Prison"), will supply the Customer with certain goods and services ("Goods and Services", and "Good" and "Services" shall have corresponding meanings) identified in paragraph 2, and the Customer will pay the Department for those Goods and Services the fees identified in paragraph 6 and in the manner identified in paragraph 7.

2. Schedule A to these Terms and Conditions set out the other specific details relating to the provision of the Goods and Services.

3. Prices unless otherwise stated exclude taxes, GST, import duties or other levies or tariffs, freights or insurance charges and are expressed in New Zealand dollars.

4. Goods will not be supplied to Customers with outstanding fees or accounts in arrears.

5. The procedure for dealing with defective goods is detailed in paragraph 2.

6. Where the Department institutes any action to recover any outstanding debt, the Customer acknowledges and accepts liability for any and all costs incurred by the Department in recovering the debt, including but not limited to all legal costs, and the costs of any recovery action.

Customer’s obligations

7. The Customer agrees to observe its obligations identified in paragraph 2 as well as any other obligation required of it under this Credit Application, these Terms and Conditions and Schedule "A".

8. The Customer acknowledges that the Department may have specific requirements in relation to the security, management and operation of the Prison and the use of Prisoners for the provision of the Services and the Customer agrees:

a. To familiarise itself and to abide by (and ensure its representatives familiarise themselves with and abide by) the Department’s policies and directions of custodial staff that relate to security at the Prison, prisoners, any operational matter at the Prison or use of prisoners involved in Prisoner Work; and

b. To attend any training, advice or assistance offered by the Department in relation to such things.

Prisoner Work

9. The Department is to provide the Goods and Services utilising the work of prisoners ("Prisoner Work"). Accordingly:

a. The Prison Manager of the Prison:

i. Will at all times retain custody and control of prisoners involved in Prisoner Work;

ii. Acting entirely in their discretion will determine the number and identity of the prisoners to be involved in the Prisoner Work but shall consult with the Customer as to the likely numbers that can best be used so as to properly provide the Goods and Services;

b. The Customer acknowledges that the prisoners involved in the Prisoner Work may not have been trained and may not be skilled to provide the Goods and Services and that the standard of provision of Prisoner Work may reflect that but to the extent permitted by the Corrections Act 2004 ("Act") and Corrections Regulations 2005 ("Regulations") the Department will use its reasonable endeavours to ensure quality is maintained to the standard identified in paragraph 5;

c. The Customer shall have no claim against the Department for loss caused to the Customer because of any lack of skill or application by any prisoner involved in the Prisoner Work; and

d. The Department shall ensure that the use of Prisoner Work complies with the Act and the Regulations and without in any way limiting any other provisions of this Agreement the Customer agrees to abide by all reasonable directions of the Department to ensure compliance with the Act and Regulations.

Interruption in supply of Prisoner Work

10. The parties agree that the Department may interrupt or suspend the provision of Prisoner Work to the Customer at any time in the event of a riot, revolt, hostage situation or lockdown at the Prison or any other circumstance or situation in which the Prison Manager determines, in the Prison Manager's sole discretion for operational, safety or security reasons, that it is inappropriate to allow Prisoners to be made available for the provision of the Services. For the avoidance of doubt, interruption or suspension by the Department under this clause 10 does not constitute a breach by the Department of this Agreement.

11. If the interruption or suspension continues for the period specified in paragraph 13, either party may terminate this Agreement by giving notice in writing to the other party, termination to take effect on the expiry of the period specified in paragraph 14, such period commencing on receipt of the notice.

12. For the avoidance of doubt, the Customer expressly acknowledges that in the event that Prisoners are not available to undertake the Prisoner Work, the Department shall not be obliged to arrange for Prisoners from any other prison to be made available to provide the Prisoner Work.

Credit, the PPSA and associated remedies

13. In consideration of the Department providing Goods and Services to the Customer or, in the case of Goods to others at the request and direction of the Customer (in such a case, the Customer remains liable for performance under these Terms and Conditions), the Customer grants to the Department a security interest as that term is defined in the Personal Property Securities Act 1999 ("PPSA") over all Goods that the Department provides to the Customer during the provision of the Services. The Customer agrees:

a. that it will, if called upon by the Department and at its own cost, promptly execute any documents and provide all information or do all things as may be necessary and as required by the Department to enable the Department to register and perfect its security interest so created as a first priority interest in compliance with the PPSA;

b. that any Goods or proceeds of the Goods coming into existence from the provision of the Services will come into existence subject to the security interest granted in this Agreement, without the need for further action by any party;

c. that the security interest granted under this clause 13 is a "purchase money security interest" as that term is defined in the PPSA, and that in the event that credit is advanced by the Department to the Customer for the purposes of acquiring rights in the Goods, the Customer will do all such things as may be necessary to ensure, and record, that in respect of any such credit advanced the security interest constitutes a "purchase money security interest"; and

d. pursuant to section 148 of the PPSA, that the Customer irrevocably waives the need for the Department to give it a copy of any verification statement in respect of any financing statement or financing change statement which the Department may from time to time register under the register maintained under the PPSA in respect of, or pursuant to, this Agreement.


14. Either party may terminate this Agreement without cause upon providing one months written notice to the other.

15. In the event of the Customer becoming bankrupt, insolvent, or going into receivership or liquidation (or similar event), the Department may immediately on written notice terminate this Agreement.

16. If a party defaults in its obligations, and that default has not been remedied at the end of the period of time identified in paragraph 15 and specified in written notice provided by the non-defaulting party to the defaulting party, the non-defaulting party may terminate effective immediately at the end of that period of time on further written notice to the defaulting party.

17. In the event of termination for any reason, the Department will not be required to provide the Goods and Services beyond the termination date and the Customer will be liable to pay for all Goods and Services provided to the date of termination.

Force Majeure

18. A party is not liable for any failure or delay in performing an obligation if it is due to a cause reasonably beyond the control of that party and that party has used its best endeavours to perform on time despite the cause. If the event of force majeure continues for the period specified in paragraph 13 either party may terminate this Agreement by notice in writing to the other party termination to take effect on the expiry of the period specified in paragraph 14 such period commencing on receipt of the notice.


19. If a party believes that there is a difference or dispute ("a dispute") in respect of these Terms and Conditions, it agrees to notify the other party in writing, giving details of the dispute. The parties will first take all reasonable steps to resolve the dispute by informal discussion. If the dispute is not resolved within 10 working days, then the dispute shall first be referred to mediation for settlement. The parties agree that costs of mediation will be met evenly between the parties. The parties will agree on the appointment of mediator but in the event that decision is not forthcoming, the appointment will be made by LEADR New Zealand Incorporated.


20. Unless clause 36 applies, the Credit Application, these Terms and Conditions and Schedule "A" represent the entire agreement between the parties and supersedes all prior oral or written agreements between them.

21. The Consumer Guarantees Act does not apply to the arrangement between the Customer and the Department as stated in Schedule B.

22. If applicable to the arrangement, the Customer agrees that it will, at its cost, manage the delivery to and collection from the Prison of the Goods and any equipment and materials that the Customer is supplying as part of the arrangement. The Department agrees to provide proper assistance by moving Goods and equipment and materials to any agreed collection and dispatch areas and ensuring that they are available for collection and dispatch at all agreed times. The parties may agree upon other methods of delivery and collection of Goods from time to time (including to others at the request and direction of the Customer).

23. Ownership of the Goods and equipment and materials supplied by the Customer remains with the Customer at all times. The Customer agrees that risk to the Goods and materials and equipment remains with the Customer, for so long as those things are stored on the Prison or other Department premises, for the provision of the Goods and Services. The Department will take all reasonable care to ensure the security and proper use of the Goods and Customer supplied equipment and materials.

24. In the interests of developing and maintaining a positive working relationship, the parties will meet as often as they may agree or may otherwise be required, to discuss any matters associated with the provision of the Goods and Services.

25. This Agreement may be varied by written agreement between the parties. Any such variation will be read together with and deemed part of this Agreement.

26. Any notice or communication to be given or made under this Agreement will be given or made in writing and will be made by email, facsimile, personal delivery or by post to the addressee at the email address, facsimile number or address, and marked for the attention of the person designated for the purpose. The facsimile number, address and designated person for each party at the time of executing this Agreement are set out in the paragraph 15.

27. If any provision of this Agreement is held invalid, unenforceable or illegal for any reason this Agreement shall remain otherwise in full force apart from such provision which shall be deemed deleted.

28. This Agreement shall be governed by and construed and interpreted in accordance with the domestic law of New Zealand.

29. Neither party shall transfer or assign either outright or by way of security, in whole or in part, that party's interest under this Agreement.

30. No delay, grant of time or other indulgence by any party in respect of any breach of any other party's obligations under this Agreement shall operate as a waiver of or prevent the subsequent enforcement of that obligation or be deemed a delay, grant of time or other indulgence in respect of, or a waiver of, any subsequent breach.

31. Nothing in this Agreement creates or evidences any legal partnership, joint venture, agency or employer/employee relationship between the Contractor and the Department.

32. Unless otherwise stated in this Agreement, each party will bear its own costs and expenses incurred in connection with the negotiation, preparation and implementation of this Agreement.

33. Subject to the Official Information Act 1982, the Privacy Act 1993 and any other relevant law, the parties will keep confidential all information relating to or arising out of this Agreement.

34. The Department acknowledges that intellectual property which is the property of the Customer belongs to the Customer, throughout the provision of the Services. The Customer acknowledges that intellectual property which is the property of the Department belongs to the Department, throughout the provision of the Services. Where the provision of the Services requires use by the Department of intellectual property belonging to the Customer, the Customer grants the Department an irrevocable licence, to use the intellectual property in the provision of the Services.

35. This clause, and clauses 6, 19, 33 and 34, survive termination or expiry of these Terms and Conditions.

36. In the event the total value of the arrangement between Department and Customer exceeds $20,000 this clause 36 will apply, in which case the Customer acknowledges and agrees that it is a condition precedent to doing business with the Department that it will enter into a more substantial form of Agreement, to be drafted by and suitable to the Department, as soon as practicable following the date of this Credit Application. The parties agree that nothing in that Agreement affects the operation of the Credit Application and these Terms and Conditions, which continues in full force and effect, save for any instances of inconsistency between the terms and conditions of this Credit Application and the Agreement, in which case the terms and conditions of the Agreement prevail to the extent of rectifying that inconsistency. Obligations stated in these Terms and Conditions which are omitted in the Agreement shall continue to apply, unless the Agreement excludes those obligations, or those obligations are inconsistent with the provisions of the Agreement.