One of New Zealand's largest olive oil companies is facing liquidation after failing to fulfil its contractual obligations.

In April 2018, Matapiro Olives (2008) Ltd and The Olive Press Ltd exchanged emails discussing the supply of olives to make olive oil for the 2018, 2019 and 2020 seasons. As part of that discussion, Matapiro agreed to consign at least 250 tonnes of olives per season to Olive Press, which Olive Press would turn into olive oil for Matapiro.

During the 2018 season, Matapiro supplied approximately 350 tonnes of olives. In 2019, however, Matapiro had a very low yield which resulted in no olives for processing. Olive Press issued an invoice to Matapiro in September 2019 for 250 tonnes of olives at the normal processing rate, but Matapiro refused to pay as they had not used Olive Press' service during that season.

The High Court¹ found that the email exchange between the parties in April 2018 amounted to a binding contract and that Matapiro was liable to pay over $150,000 to Olive Press.

A simple condition inserted into a formal agreement would have prevented this issue from arising.

This case demonstrates how important it is to get legal advice when negotiating or entering into any contract or agreement so that you properly understand your legal obligations, particularly when large sums are involved.