Contract Law
Commercial contract advice and disputes for NSW businesses, from reviewing terms before signing to variation, termination and breach.
Contract law decides when an agreement is binding, what its terms mean and what happens when one party does not perform. Vamp Law advises businesses on commercial contracts before they are signed, when the parties disagree about what a term means, and when a contract is varied, terminated or breached.
What does Vamp Law's contract law practice cover?
Vamp Law advises businesses on commercial contracts at every stage: before signing, during performance when the parties disagree about what a term means, and when a contract is varied, terminated or breached. Clients include sole traders, companies and directors dealing with suppliers, customers, contractors, landlords and other businesses.
This page looks at contracts from the commercial side, including advice given before anything goes wrong. Where a dispute has already started, the contract disputes page explains how Vamp Law runs those matters. The contract law guides explain the basic concepts in plain language, starting with the elements of a contract.
Why have a commercial contract reviewed before signing it?
A commercial contract allocates risk between the parties, and the time to change that allocation is before it is signed. Kyra Pastrovic reviews and negotiates contracts with particular attention to the clauses that most often decide disputes later:
Scope, price and payment
what is actually being supplied, when payment falls due and what happens if it is late.
Limitation of liability
caps on what one party can recover and exclusions of particular kinds of loss, which are only as effective as their wording.
Indemnities
promises by one party to cover another's losses, which can reach further than ordinary liability for breach.
Termination
when each party can end the contract, and any notice or cure period that must be given first.
Variation
how the contract can be changed, and whether changes must be made in writing.
Dispute resolution
notice, negotiation, mediation or arbitration steps that apply before court proceedings.
How are contract terms interpreted when the parties disagree?
Contract terms are interpreted objectively, by asking what a reasonable businessperson would have understood the words to mean, not what either party privately intended. In Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37, the High Court confirmed that the rights and liabilities of the parties are determined by reference to the text of the contract, its context and its purpose.
In practice, the whole contract is read together, including documents it refers to. Many disputes about meaning are resolved early by a careful reading of the contract before positions harden, and that reading is where Kyra Pastrovic starts.
Can a commercial contract be varied or terminated?
Yes, but each carries risk. A contract can be varied by agreement, following any procedure the contract sets out, and a variation that does not follow that procedure can itself become the subject of a dispute.
A party may be entitled to terminate under an express termination clause, or under the general law where the other party has repudiated the contract or breached an essential term. A party that terminates without a proper basis can itself be treated as having repudiated the contract, and be exposed to a claim for damages. Vamp Law reviews the contract, the notices given and the timeline before any termination letter is sent. The guides on breach of contract, repudiation and frustration explain these concepts in more detail.
What are unfair contract terms?
Unfair contract terms are terms in a standard form consumer or small business contract that a court finds unfair under the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)). A contract for goods, services or land is a small business contract if at least one party employs fewer than 100 people when it is made, or had a turnover of less than $10 million in its last income year, worked out under the Act. A term is unfair if it would cause a significant imbalance in the parties' rights and obligations, is not reasonably necessary to protect the legitimate interests of the party it benefits, and would cause detriment if relied on.
An unfair term is void. Since 9 November 2023, proposing or relying on an unfair term in a standard form consumer or small business contract can also attract civil penalties; those changes apply to contracts made or renewed on or after that date, and to terms varied or added after it. Equivalent protections for financial products such as loans and insurance sit in the Australian Securities and Investments Commission Act 2001 (Cth). Vamp Law advises businesses that issue standard form contracts and businesses asked to sign them.
What happens when a commercial contract is breached?
The innocent party's options depend on how serious the breach is and what the contract says, and the first steps matter:
Read the contract
Check notice requirements, cure periods, limitation of liability clauses and any dispute resolution process before responding.
Protect your position
Keep records, and take advice before deciding whether to terminate or keep the contract on foot, since conduct either way has legal consequences.
Give notice
A formal notice or letter of demand sets out the breach, the remedy sought and a deadline.
Negotiate or mediate
Many disputes resolve at this stage, once each side's position has been tested against the contract.
Commence proceedings
If the dispute does not resolve, proceedings for damages or other remedies are filed in the appropriate court, within the time limit.
Under the Limitation Act 1969 (NSW), a claim founded on a contract generally must be brought within six years of the date the cause of action first accrues, and a claim on a deed within twelve years. The guide to remedies for breach of contract explains damages and the other remedies available. This page is general information only: the right answer depends on the facts and on the contract documents.
Frequently asked questions
Most contracts do not need to be in writing to be binding, and agreements can be formed through conversations, emails or conduct.
Some must be in writing to be enforced: a contract for the sale or other disposition of land cannot be enforced unless it, or a note of it, is in writing and signed by the party to be charged (Conveyancing Act 1919 (NSW), section 54A). A written contract is also far easier to prove.
Misleading or deceptive conduct in trade or commerce is prohibited by section 18 of the Australian Consumer Law, and statements made during negotiations can support a claim.
The guide to misrepresentation explains the options.
Sometimes. Estoppel can prevent a party from going back on an assumption or promise it induced another party to rely on, where it would be unconscionable to allow it.
The guide to estoppel explains when it applies.
Yes, where the contract is a standard form small business contract as defined in the Australian Consumer Law. A larger business that issues standard form contracts to small businesses should review its terms against the regime.
Speak with Vamp Law about a commercial contract
If you have a contract to review before signing, or a contract that is not being performed, make an enquiry or call +61 431 569 686 to speak with Kyra Pastrovic. Read more about Vamp Law's commercial litigation practice.
Ready when you are
Get advice on your matter
Tell us what is happening and we will explain your options.