HOW NECA LEGAL WA CAN HELP YOU
WA BRANCH
AVOID COSTLY CONTRACT DISPUTES UNDERSTANDING THE TERMS OF COMMERCIAL CONTRACTS YOUR COMPANY ENTERS INTO IS ESSENTIAL TO BUSINESS PROFITABILITY AND LONGEVITY. CONTRACT DISPUTES CAN BE COSTLY – AND SOME HAVE THE POTENTIAL TO SINK YOUR BUSINESS. THAT IS WHY NECA WA STRONGLY RECOMMENDS THAT MEMBERS SEEK EXPERT ADVICE ON PROPOSED COMMERCIAL CONTRACTS BEFORE THEY ARE SIGNED. Contract disputes – what are they?
Three reasons to avoid contract disputes
Before we look at ways you can avoid contract disputes, let’s address what they are. A contract dispute is a disagreement between parties to a contract over the contractual entitlements and obligations. In the electrical contracting industry, these disputes often arise between a head contractor and a subcontractor.
1. To ensure your business continues to be paid for works performed.
Contract disputes within commercial relationships — Four key matters to consider Commercial relationships are often governed by Subcontractor Agreement terms or by terms contained in a Purchase Order, and they may differ. Before signing a contract or commencing work, below are four key matters you must consider: 1. Which terms and conditions apply? Is it the terms of the Purchase Order or the Subcontractor Agreement? 2. Which party can make variations and if made, in what circumstances can an extension of time be sought and what procedures must be followed? 3. Under what circumstances can the contract be terminated, and what are the consequences? 4. What are the indemnity and insurance requirements? Does it conflict with any existing insurance policies?
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2. To reduce the risk of termination by the head contractor and costly litigation, which can expose your business to grave financial risks. 3. To avoid straining ongoing business relationships, which can prevent you from obtaining future work.
How NECA Legal WA can help NECA Legal WA can assist members by reviewing your commercial contracts. A review will benefit your business by:
Clarifying the meaning of critical provisions; Highlighting the main hazards and ambiguities; and Providing advice on unfair contract terms and recommending changes.
These reviews will help you to understand a contract prior to signing, lessening the likelihood of a future contractual dispute and the risk of claims for damages.
Johnny Brits Legal Practice Director, NECA Legal WA necalegalwa@ecawa.org.au
NECA Legal WA can also provide template Terms and Conditions and Subcontractor Agreements, specifically tailored to your individual requirements.
How much will it cost to review your contracts? NECA Legal WA undertake contract reviews at the member-only hourly rate of $290 plus GST. On average, it takes two to four hours to complete a contract review, depending on length and complexity. Note that the first half hour is free as part of your NECA WA membership. Should you have concerns over a particular contractual clause in an existing contract, you can contact NECA Legal WA for thirty minutes of free advice. Get in touch with NECA Legal WA today to find out more about how they can assist your business in regard to commercial contracts – phone (08) 6241 6129 or email necalegalwa@ecawa.org.au.
Disclaimer: This summary is a guide only and is not legal advice.
September 2021
