Contract Disputes

Contract disputes involve complex issues and a myriad of unique circumstances. We understand that maintaining healthy business relationships plays an important role in the long-term success of any venture.

In case of an unavoidable breach on your part or due to the fault of another party, we help you navigate the dispute resolution process till its proper conclusion. We have enforced and defended numerous claims in various contract litigation enforcement forums in Victoria. The nature of the dispute, the possibility of it becoming litigious and the claim amount will ultimately determine the appropriate jurisdiction & forum.  

Why choose Denning Legal?

The purpose of every contract is to allocate risks between various parties in a transaction and to determine their rights & obligations. The ability to legally enforce a contract in case of breach ensures commercial certainty and dissuades any breaches. Contract Disputes can be effectively dealt with by a team of Contracts Specialists & Litigation experts or be unnecessarily drawn out and costly defeating the purpose of enforcing a contract. 

Our lawyers have vast experience in a diverse range of every day contractual disputes that cover numerous sectors and industries. Every Venture today has a wide range of contracts that governs its operations and relationship with its suppliers, vendors, customers & other businesses. There are various types of contract disputes that we have been engaged to resolve previously: 

• Commercial Contracts 
• Business Contracts 
• Lease Agreements 
• Manufacturing & Sourcing Contracts 
• Employment Contracts 
• Intellectual Property Assignment Contracts 
• Joint Venture Agreements 
• Licensing & Franchising Agreements 
• Partnership Agreements 
• Shareholder Agreements 

Understanding ‘Unfair Terms’ and Resolving a Contract Dispute

Australia has various laws that protect consumers and small businesses from unfair contract terms which may cause significant unbalance in rights & obligations of the party. Standard form contracts have become commonplace in everyday transactions, be it ordering goods from a digital marketplace to leasing a car or joining a gym. These are general contracts made at the behest of one party and presented on a “take it or leave it” basis, leaving the consumer or small business powerless to negotiate unfair terms, as these contracts are. Examples of such unfair terms would be: 

• Permitting one party to limit or avoid performance of obligations. 
• Permitting one party but not the other to terminate contract. 
• Penalties for one party but not the other for breach or termination. 
• Permit to one party but not the other to vary terms. 
• Terms that avoid or limit liability for negligence. 
• Terms that allow only one party to determine breach of contract. 
• Terms that limit the right of a part to sue the other party. 

Remedies

For a business, it is of the utmost importance that their contracts are fair and comply with Australian Consumer Law, as it may lead to complaints to the authorities such as Australian Competition & Consumer Commission and subsequently penalties. The remedies available to the ‘aggrieved party’ for a breach of contract or unfair terms, will depend upon several factors, such as the terms of the agreement and the nature of the breach. These remedies might include: 

▶︎ Injunction to prevent use of unfair term: 

An injunction is an equitable remedy usually sought in exceptional and urgent circumstances. It is an urgent order of the court, often granted in the absence of the other party (ex-parte), directing a party to either do a specific thing or refrain from doing a specific thing. 

▶︎ Compensation for damages due to breach 

All breaches of obligations under a contract give rise to a potential claim for damages. 

▶︎ Specific Performance of terms of the contract

An order of the court compelling party in breach to perform obligations as per the terms of the contract. 

▶︎ Declaration that terms are unfair: 

An order of the court compelling party in breach to perform obligations as per the terms of the contract. 

▶︎ Termination

of the Contract on legitimate grounds. 

Protections available to Small Businesses in B2B contracts 

As your business grows, it enters into various standard form contracts with other businesses for running its operations. Section 23 of the Australian Consumer Law (ACL) protects small businesses from unfair contract terms in most of these contracts. 

It is important to note that various protections that apply to Contracts executed or varied/amended by Small Businesses after 12th November 2016. It will only be applicable if the value of the contract is $300,000 in a single year or $1 Million, if the duration of the contract exceeds one year. This value includes any consideration or payment for supply & sale of goods & services mentioned before or at the time, the contract is executed. A small business is one that employs less than 20 people including casual employees that work on a systemic basis. 

Apart from the unfair terms mentioned above, examples of unfair terms in the context of small businesses include: 

• Unreasonable terms that are not necessary to protect the legitimate interests of the party gaining advantage by them, 
• Terms that may cause unreasonable financial detriment to a small business. 

Mitigating factors in contract disputes 

There are some common mitigating factors which may arise in every contract dispute:

• Whether the standard terms of trade are applicable? 
• Reliance placed on unfair standard terms to enforce a claim. 
• If contract is void or cannot be enforced. 
• Mode of execution and if contract is oral or written. 
• Analysing records and correspondence between parties to establish estoppel or acquiescence related to breach. 
• Exclusion and limitation of liability.  

We provide full litigation service in all areas of contract disputes. We begin by carefully reviewing with our clients the terms of a contract and whether a contract has been breached. Drawing on our extensive knowledge and experience in the field, we will recommend the most effective & affordable course of action to our clients. We provide full disclosure on the outcome of success of your claim or if the allegations are made against you, we use our extensive experience to defend your case and minimise your legal risks. 

We assist with all forms of dispute resolution

The Civil Dispute Resolution Act 2011 casts an obligation on the parties involved in a civil dispute to explore alternate dispute resolution mechanisms and take genuine steps to resolve the dispute, before instituting any court proceedings. Section 6 & 7 of the Act mandate that Genuine steps statement to be filed by party who institutes civil proceedings as well as the other parties involved in the dispute. A "sincere and genuine attempt to resolve the dispute" is defined as a ‘Genuine Step’ and may include: 

• Notice to other party about dispute and breach of obligation with offer to discuss and rectify breach and appropriate response to such notice. 
• Providing information and documents important to resolve the dispute. 
• Exploring alternate dispute resolution mechanisms as per the terms previously agreed upon. 
• Attempting to negotiate with other party to at least seek partial resolution of dispute or authorising a representative to do so. 

Resolving a Contract Dispute involves applying a multi-pronged approach tailored for your needs. With our diverse experience of contractual transactions and disputes, we can provide you with pragmatic solutions that maximizes your rights and minimizes your costs and risk. We assist with all forms of dispute resolution, which include: 

▶︎ Negotiation 

The cornerstone and starting step in the dispute resolution process. The quickest way to resolve a contract dispute without the need for drawn-out formal court proceedings.

▶︎ Mediation 

The parties may choose to enter into a settlement after conducting mediation as part of taking ‘Genuine Steps’ to resolve disputes. Such settlements do not need sanction or approval of the court and are binding on the parties if a valid contract is made.

▶︎ Arbitration

Most commercial agreements today have an Alternate Dispute Resolution / Arbitration clause which sets out the formal way in which disputes shall be resolved before institution of any court proceedings. An Arbitration Award is binding on the parties and can be enforced by Australian Courts. Further, a Court is also empowered to direct parties to explore ADR mechanisms before proceedings may commence. 

▶︎ Court Proceedings

The Adversarial Litigation process in which parties may submit relevant evidence to support their claims. It is important to take ‘genuine steps’ to resolve civil disputes before instituting any court proceedings. It starts with filing an actionable claim in the court of competent jurisdiction raising triable issues, with outline of facts supporting the claim for damages arising out of breach. 

Understanding Limitation Periods for Contract Disputes: When does Limitation begin and end? 

A 'limitation period' refers to the maximum period of time within which court proceedings must be instituted. It begins from the moment a cause of action arises. A cause of action arising out of a breach of contract occurs when the breach itself occurs or when it comes to the knowledge of the other party or when it causes unforeseen losses. 

As per Section 5 of the Limitation of Actions Act 1958, actionable claims for contract disputes shall not be brought after the expiration of 6 (Six) years from the date on which the cause of action accrued. It includes actions founded on simple contract and contracts implied in law. Further, as per Section 5(1A) of the Act, any actionable claims for damages for negligence ,nuisance or breach of duty which exists by virtue of a contract, where the damages claimed by the plaintiff consist of or include damages in respect of personal injuries consisting of a disease or disorder contracted by any person may be brought not more than 3 (Three) years from the date on which the cause of action accrued.