Consequences of not making Effective Business Contracts

As an Accredited Specialist in Commercial Litigation I have dealt with all kinds of business disputes. By far the most common cause of commercial disputes is the failure of the parties to adequately record the terms of their agreement in writing. This is particularly common in the building and construction industry.

When there is an inadequate written contract disputes can frequently arise in relation to:

  • The scope of work that was to be performed,
  • The price or schedule of rates applicable to the work,
  • Whether there was a variation to the scope of works or price,
  • Whether the subcontractor was entitled to suspend work,
  • What warranties or assurances were given in relation to the work,
  • Whether a progress claim is also Payment Claim under the Building & Construction Industry Security of Payment Act, and
  • Whether things said in negotiations constituted misleading or deceptive conduct in breach of The Australian Consumer Law.

Due to the uncertainty that exists when a dispute arises in relation to an inadequate written contract, typically:

  1. The claimant will accept an amount less than the amount claimed in order to avoid expensive litigation and/or the risk of their claim being unsuccessful, or
  2. The dispute will take longer and cost more to resolve.

Either way, there is usually a significant cost that comes with the realisation that your business is not making effective everyday business contracts.

In 2013 we developed TradeSafe Contracts as a low cost legal solution for businesses unnecessarily exposing themselves to risks and costs of litigation by not making effective everyday business contracts.

TradeSafe Contracts Logo 19 March 2013 CROPPED

By Sam Roberts,
Managing Director, Accredited Specialist (Commercial Litigation)

Sam Roberts