Contract disputes

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Most contract disputes arise when a party to the contract breaches a term that is written or implied in the contract.

A breach usually occurs through:

  • a failure to perform on time;
  • a failure to perform to an agreed standard; or
  • a refusal or inability to perform at all.

A breach of contract can have a severe impact on people and businesses. Whether you are the plaintiff or the defendant in a contract dispute, our team of dedicated contract lawyers in Brisbane can provide expert legal advice to ensure your rights are protected.

Gibbs Wright Litigation Lawyers Brisbane can help in disputes of $5000 and above. Call for a free, no-obligation consultation to assess the strength of your case.

What is a contract?

A contract is a legally binding agreement between two or more parties who promise to do (or not do) something in return for payment of some sort. Contrary to popular belief, a contract does not need to be in writing; it can be oral, part oral and part written, or even implied by conduct.

Entering a contract is a regular part of life, whether you are aware of it or not. For instance, you enter into a contract when you buy a loaf of bread, negotiate a pay rise or buy a movie ticket.

Why do contract disputes arise?

A contract dispute is the most common dispute for a business, and usually arises as a result of a breach by one of the parties to the contract. Differences in the interpretation of contract terms can also be a major cause of conflict.

Types of contract disputes

  • building contracts
  • commercial contracts
  • distribution agreements
  • employment contracts
  • franchise contracts
  • government contracts
  • joint venture agreements
  • loan agreements
  • partnership agreements
  • shareholder agreements
  • sponsorship agreements

How Gibbs Wright Litigation Lawyers can help

Our lawyers can help any party to a contract dispute. We can help a plaintiff to claim damages or other remedies to ensure they are adequately compensated. We can help a defendant fight a claim for damages, argue that the amount claimed is too high, or lodge a counter-claim.

We can help solve contract disputes in all types of businesses, including retail, mining, and construction. A dispute may require simple enforcement proceedings, or it may require more complex action to deal with instances of negligence or misleading and deceptive conduct, for example.

Resolving a contract dispute may require:

  • negotiation — when the parties negotiate a resolution without the need for formal mediation or arbitration;
  • mediation — when an independent mediator is appointed to help the parties resolve the dispute rather than decide it;
  • arbitration — when an arbitrator is appointed by the disputing parties or by a court, with the arbitrator making a legally binding decision; and/or
  • court proceedings — when negotiation, or mediation and arbitration, cannot resolve the dispute, it will need to be taken to court.

Gibbs Wright lawyers can offer expert advice on all options to ensure an effective resolution. Call us for a free, no-obligation consultation.

FAQs

No. However, a lawyer can help you by drafting a contract with precise wording, one that minimises the risk of contract breaches by ensuring each party is aware of its rights and responsibilities. An ambiguous contract can be open to several interpretations and the consequences can be disastrous.

Contracts are a complex area of law, and you should protect your interests with a well-drafted contract. Call Gibbs Wright Litigation Lawyers for a free and confidential consultation about your contract matter.

An agreement is an arrangement or understanding reached between parties where there is no intention to be legally bound.

A contract is a specific agreement that has elements that make it legally binding and enforceable by a court. There is an intention, either express or implied, to be legally bound. The essential elements of a contract are:

  • offer and acceptance — an offer is made by one party and accepted by the other party;
  • consideration — something of value is exchanged for a promise;
  • intention — the parties must intend to make a legally binding agreement; and
  • capacity — the parties must be capable of entering into the contract.

 

A contract lawyer should review your contract because the document is the key to your business success. It is vital that your interests are protected and that each party to the contract has clarity about their rights and responsibilities. There can be serious legal consequences for a party that fails to keep its promise.

Contract disputes can arise in range of circumstances and can involve:

  • building contracts — boundary miscalculations, unreasonable delays, additional costs of materials
  • commercial agreements — lack of confidentiality, misleading information
  • employment contracts — discrimination, unfair dismissal, stand downs
  • franchise contracts — projected profits not materialising, lack of advertising rights for a franchisee
  • government contracts — licensing requirements, onerous development conditions
  • joint venture agreements — profit-sharing disagreement, undisclosed expansion plans
  • loan agreements — excessive fees and charges, unauthorised transactions
  • partnership agreements — partner underperformance, competing interests
  • shareholder agreements — bankruptcy, fraud, withholding of dividends
  • sponsorship agreements — ethical concerns, unreasonable expectations

The above are only some of the different kinds of contract disputes and reasons they may occur. As it is a complex area of law, there are many other kinds of contract disputes.

A breach of contract is when a party to the contract fails to abide by a term that is written or implied in the contract. A breach usually occurs through:

  • a failure to perform on time;
  • a failure to perform to an agreed standard; or
  • a refusal or inability to perform at all.

There are four main types of contract breaches:

  • Material — when a party receives significantly less (or a significantly different result) than what was stated in the contract. Damages can be sought for both direct and indirect consequences of the breach.
  • Minor — when a party fails to fulfil part of an obligation. Damages can be sought only if the non-breaching party can prove the breach caused financial losses.
  • Anticipatory — when a breach has not occurred but a party has indicated that it will not fulfil its obligations under the contract. One party can notify the other party or a claim can be based on actions which suggest a party does not intend to deliver.
  • Actual — when a party has either refused to perform its obligations by the due date, or performed them improperly or incompletely.

To prove a breach of contract, you need to show that there is:

  • a legally binding contract; and
  • non-compliance with a term of that contract, which could be an express or implied term.

The type of remedy available you can seek depends on the type of contract, the scale and severity of the breach, and whether the contract contains any clause for dealing with a breach. Remedies include:

Damages

The court can award damages (money) to compensate the innocent party for loss suffered due to the breach. The amount of damages to be paid can be specified in the contract (liquidated damages) or otherwise decided by a court (unliquidated damages).

Injunction

A court can order an injunction to restrain a person from breaching, or continuing to breach, a contract.

Specific performance

This kind of court order directs a party to perform their contractual obligations. This order can be made when the damages awarded are not adequate compensation.

Termination

A court can order that the contract be terminated and that the party in breach restore the innocent party to the position it was in before the contract was signed.

Yes. There may be defences available to a person or business accused of breaching a contract which could avoid or limit any liability. Whether a defence applies will depend on the circumstances of the case. Common defences include:

  • mistake of fact;
  • incompetency;
  • unconscionability;
  • duress;
  • undue influence; and
  • misrepresentation

Contrary to popular belief, a contract does not need to be in writing; it can be verbal.

A verbal contract will be valid if it can be established that it has all the essential elements of a contract:

  • offer and acceptance — an offer is made by one party and accepted by the other party;
  • consideration — something of value is exchanged for a promise;
  • intention — the parties must intend to make a legally binding agreement; and
  • capacity — the parties must be capable of entering into the contract.

 

It can be difficult to prove that a verbal contract exists and what its agreed terms are. Verbal contracts should be avoided. If a verbal contract is made, the terms should be confirmed in writing in case they need to be enforced.

A contract may be unenforceable for reasons such as:

  • it violates public policy, for example a contract to sell illegal drugs;
  • it involved duress or undue influence;
  • a party did not have capacity to enter the contract, for example the person was a child or had a mental impairment;
  • one party or both made an honest mistake;
  • it is unfair due to unconscionability, for example there was no room for one party to negotiate; or
  • one party used a misrepresentation or false statement to induce the other to enter the contract.

If you’re involved in a contract dispute, it is recommended that you seek legal advice. You can do so by calling Gibbs Wright Litigation Lawyers for a free, no-obligation consultation about your legal rights and options.

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