Why engage a contract lawyer?
Contract lawyers are able to assist with any issues that may come about as a result of contracts or contract law. Contracts are part of the bedrock of Australian law; as a result they occur every day in the course of almost all business proceedings. Contracts are composed of terms and conditions that are enforceable through the courts. It is not uncommon for disputes over these terms to arise, especially with commercial or business contracts where large sums of money are involved.
Contract lawyers are able to assist with the drafting and revision of contracts and their terms. Obtaining legal advice from Contract lawyers ensures that the agreement protects your interests, and can be performed in a way that benefits all parties involved.
What is a contract?
Contracts are agreements made between parties which can be legally enforced. They can be agreements as simple as a commercial transaction, or as complicated as a document containing many pages filled with legal terms and conditions. Several conditions must be met if a contract is to be legally enforceable, such as:
- The intention to create an agreement which is legally enforceable;
- There must be certainty as to which individuals or entities are bound by the contract;
- One party must have made an offer, which is considered and accepted by another party or parties;
- All parties to the contract have given and received something as a result of the agreement;
- All parties are clear as to their obligations and expectations.
Some contracts are required by law to be written, such as those to do with the sale of land. Many contracts are verbal, with their terms being implied rather than expressly stated. Some contracts are defined as consumer contracts, where they provide for the supply of goods or services, or the sale or grant of an interest in land, to an individual for personal, domestic or household use or consumption.
Contracts that have been entered into because of a misunderstanding or mistake are not enforceable, as this would contravene the requirements set out above and therefore render the contract illegal and void.
Contract law is a foundation of Australia’s legal system; individuals and entities enter contracts every day. The terms of a contract can be legally enforced through the courts, and disputes sometimes arise over these terms.
With this in mind it is highly recommended that you obtain legal advice when drafting or reviewing any contracts. A contract lawyer will be able to create a document that clearly lists any obligations, and contains measures that may assist in the mitigation of potential conflicts.
Why you need a contract lawyer to review your contract
A contract may be created, be valid and binding, without having been written or reviewed by a professional contract lawyer. It is this fact that may lead to contracts being breached or becoming impossible to enforce, as the terms of the contract lacked the required specificity and clarity.
Obtaining professional legal advice from trusted contract lawyers allows you and your business to avoid the costly mistakes and missed opportunities that arise from a poorly formulated contract. If you have come to a professional understanding regarding commercial arrangements with another party, you should ensure that a professional contract lawyer assists you in formalising this understanding in a binding contract.
Failure to do so may leave you exposed to the unexpected, including costly litigation, before your commercial agreement can be fulfilled. In essence, a contract lawyer’s services represent invaluable insurance for the parties to any commercial agreement.
This is achieved by ensuring expectations and understandings are appropriately specified and agreed-upon actions to be taken in the event of any issues are stipulated.
At LGM Advisors, we strive to advise our commercial and business clients of any liabilities or ambiguous terms that may hinder their ability to successfully settle their transactions. If required, we can also negotiate with the other party/s on behalf of you or your business to ensure that your interests are reflected in the contract terms.
Breaches
A contract is breached when one or more parties do not meet their contractual obligations or perform the contract as required by its terms and conditions. The effected party may wish to bring the case before the courts, seeking to have the contract enforced. The breach may be resolved outside of court, especially if the contract was drafted in way that anticipated any possible disputes.
Should the breach lead to legal action, a court may choose to award damages to the party affected by the breach of contract in order to make up for the contract not being honoured. A court may order the offending party or parties to carry out a ‘specific performance’, which would force them to carry out their contractual obligations.
Proving a breach of contract
If you suspect a contract has been breached, you will require legal advice from a professional contract lawyer. A breach of contract may lead to legal action if the breach of contract criteria is met.
In short, there must be a binding contract, the validity of which can be proven. Proof that one of the parties to this contract is unwilling or unable to fulfil their obligations as per the agreement is required to prove a breach of contract. Evidence of damage or loss to the other party, as a result of the breach, must also be demonstrable.
Breaches of contract can be broken down into four criteria:
- Minor breach: A breach of contract where the non-breaching party can sue for actual damages, but not for specific performance.
- Material breach: Not completing work, which can lead the non-breaching party’s ability recover damages, or compel the breaching party to satisfactorily complete work.
- Fundamental breach: Fundamental breach egregious enough that the non-breaching party may terminate the agreement and recover damages.
- Anticipatory breach: This is when there is no doubt that one party will not be able to provide, or perform as expected. In such a case the non-breaching party can collect losses due to the contract not being fulfilled.
A perfect contract contains clearly and obviously agreed upon terms which are thoroughly understood by all parties concerned. It should also anticipate any potential disputes or issues that may impede the contract’s execution.
If this is done, parties to the contract should be able to put the document away and not need to refer to it again, as they are able to properly perform their obligations without issue.
Process for drafting a contract
In order for your contract to be properly prepared, the lawyer writing the contract must have all knowledge available by both parties. This will ensure the contract can be prepared in a way to manage any circumstances, likely or not, that may cause confusion or breach.
Regardless of the work being performed, contracts are an essential way of ensuring an agreement is satisfied within agreed upon terms. They are a vital and everyday part of our business lives. You should never feel awkward about requesting a contract as they are a professional agreement.
Steps to prepare a contract:
- Exchange of information. The two parties exchange information related to the type of work to be done. This discussion usually will talk about scope of work to be done, timeline, and cost.
- Discussion, and negotiation of agreement. This is an additional discussion, often without lawyers, to review the finer points of the agreement, stipulations, and address concerns and how to resolve them. It may also consider unlikely situations, and how to manage those incidents.
- Preparation: Both parties will discuss with the lawyer(s) on documenting the agreement and the agreements key points. If multiple lawyers are involved, they will work together toward preparing the agreement, that represents both clients’ needs. If concerns arise, both parties will consult with the lawyer(s) to resolve issues prior to finalizing the contract. Once finalized, both parties will sign that they agree with the content within the contract, and they understand their obligations stated within the contract.
Verbal and written contracts
Contracts can be either verbal or written depending on the needs of service. Both are legal agreements in a court of law.
However, and this is a strong point, verbal contracts can be difficult to prove breach of contract, while a written contract has all the required components of an agreement, as well as the stipulations of the agreement and it is signed that both parties acknowledge the stipulations within the agreement.
Tips to Validate a Verbal Agreement:
While it may be more difficult to validate a verbal agreement has taken place, it is also important to note that a verbal agreement is also a binding contract and can be used to address breach of contract either in mediation or court of law. As opposed to a written contract, the breach of a verbal contract must need to show significant proof of breaching an agreement, and this is often done by showing egregious misconduct, and discussion points of work conducted.
In order to validate your agreement there are specific things you can do:
- The performance of work completed can in itself be referenced to prove an agreement existed, and payment was made for work. If the work was started and not completed, poor work was performed, or the work performed, if at the fault of the breaching party, caused damage or financial cost, this can be used as breach of contract.
- Supporting documentation such as emails, letters, quotes (if work was started), and text messages.
- Documentation of direct communication. If work was performed, or started, you may use documentation of phone calls; time of call, who you spoke to, and context of discussion, as a means to show there was an agreement of some kind.
Tips to Validate a Written Agreement:
A written agreement is much easier to validate as both parties have signed the contract noting they are comfortable with the agreement. However, there are things you can do to ensure an agreement breach is acted upon by law:
- Review the agreement fully
- Sign the agreement
- Make sure other party signs agreement
- Document any conduct that may lead to a breach of contract.
- Document added stipulations, or changed conditions of agreement and have both parties sign the change.
Contract lawyers
It is likely that you or your business will need to enter or even create a complex contract at some point. It is important that the terms of the contract accurately reflect your interests, but do so in a way which ensures the other party or parties are able to fulfil the contract’s requirements.
Due to the common nature of contracts, the fact that they are similar in structure and often contain similar terms, contract lawyers are usually able to provide a good up-front estimation of any costs involved.
As contracts are such a widespread and important part of Australia’s legal system, it is vital that businesses and individuals have an understanding of contract law. For more complex matters, such as when a particularly important contract is being entered, or if a breach has occurred, it is recommended that the services of a contract lawyer are sought. Contract lawyers are able to draft, review, and assist in enforcing contracts.
Hiring an expert Melbourne based contract lawyer to help you write a contract is vital to your business, and protecting you and your company. LGM Advisors is a leading Melbourne law firm, professionals in contract law. LGM Advisors have the skills, experience and expertise to ensure that you and your contract matter is consulted upon with the utmost professionalism. Contact LGM Advisors today for the best contract lawyers in Melbourne on (03) 9832 0608 or by email at contact@lgmadvisors.com.au.
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