Unfair Contract Terms | ECAWA

Unfair Contract Terms

Don't take risks when reviewing your contracts

Companies who enter into contracts without having the terms and conditions reviewed are putting their business at risk.

Particular areas of dispute and misunderstanding involve variations and extension of time. You may be aware that under common law there exists a “Prevention Principle” which can be summarised as follows; 

  • A party cannot insist on the performance of a contractual obligation by the other party if it is the cause of the other party's non-performance. The Supreme Court of WA stated that this principle is “implied as a matter of law in all contracts” (Spiers Earthworks Pty Ltd v Landtec Projects Corporation Pty Ltd)

 

However, there have been examples where subcontractors were precluded from the benefit of extension of time provisions in a contract and held liable for liquidated damages, even in circumstances where they were not the cause of the delay.

This Prevention Principle case study example puts this into greater perspective. 

The case of CMA Assets Pty Ltd v John Holland Pty Ltd is such an example where the Prevention Principle was not applied by the Court on the basis that the subcontractor failed to comply with the strict contractual requirements relating to extension of time.

 

You should ask yourself as a business owner;

 1 

Did you know that a Subcontractor could be held liable for liquidated damages, even if the Subcontractor was not responsible for the delay?

 2 

Have you encountered unfair contract terms as a Subcontractor? (Learn more about the summary of changes to the Competition and Consumer law regarding the unenforceability of certain unfair contract terms.)

Click here to refer to a case study where unfair contract terms were held to be unenforceable.

 3 

Did you know that certain unfair contract terms are no longer legally enforceable, irrespective of whether you have signed up to them?

 

Before you sign your next contract - to ensure you don’t end up subject to unfair contract terms, or liable for liquidated damages when you haven’t caused the delay, ask NECA Legal WA to review the contract terms for you.

NECA members can already receive 30 minutes of free advice as part of their membership, but with this special offer, the first hour will be free of charge, should you instruct us to review your contract terms. (On average, it takes NECA Legal 2-4 hours for a contract review.)

 

Contact us via the form below to find out how NECA Legal WA can assist you in reviewing your contracts.

Contact the NECA Legal WA team 

E: necalegalwa@ecawa.org.au

P: (08) 6241 6129