Contractual Disputes

Authors: Ian Aldridge & Rebecca Campbell, Progressive Legal

Contractual disputes can arise for any business, for many different reasons. In Australia, contractual disputes can arise from many different issues such as unclear terms, non-compliance with the terms of the contract, and disagreements between the different parties to the contract. Unfortunately, sometimes contractual disputes are inevitable if one party simply won’t perform their duties under a contract, no matter what they have agreed to. 

Some common reasons for contractual disputes include non-payment of monies, failure to perform the contract or parts of it, breaches of confidentiality, and disputes over intellectual property. If there is a new intervening event (something that was unanticipated at the time of entering into the contract), that can also lead to a contractual dispute. Learn more on this page.   

What is a Contractual Dispute? 

A contractual dispute is a disagreement between two or more parties to a contract regarding a specific term of a contract or a number of them.  

Contractual disputes can arise at any stage of the contract, from the formation of the agreement to the completion of the contract and even some terms which survive the termination of the contract.  

Those ongoing obligations might include confidentiality, non-compete, non-solicitation, intellectual property provisions etc. 

Common contract disputes often involve disagreements over payment terms, breach of contract, scope of work, delivery schedules, or quality of goods/services. These disputes can occur in various industries, such as construction, property, real estate, employment, and business partnerships, leading to legal actions or renegotiations to resolve the issues.

Preventing Contractual Disputes 

The best way to avoid contractual disputes is to ensure that the terms of the contract are carefully considered and set out clearly and comprehensively in a written contract signed by all the parties to the contract. Then it is up to the parties to deliver on their promises.  

It is important to include all the terms of the contract between the parties relating to the particular contract in question and the industry which the contract relates to. There are many different contract terms which will be relevant for different types of contracts and it is therefore recommended to seek legal advice to prepare the contract and ensure that the contract fulfills all the needs and requirements of the parties.  

In addition to preparing a comprehensive and clear written contract, it is important to understand the terms of the contract and what procedures to follow in compliance with the contract. An action taken by a party to a contract may amount to a breach of the contract if that party has not acted in accordance with the terms of the contract. If a party is unsure about an issue and how to address it, they should seek legal advice before taking action.  

Legal Recourse for Contractual Disputes 

If a contractual dispute arises there may be provisions in the contract which govern the procedure to be followed by the parties. There will also be different laws governing different types of contracts in different jurisdictions.  

Contract disputes can be complex and may be subject to tight timeframes to take certain action. It is strongly recommended that legal advice is sought at the outset to ensure that the parties understand their obligations and their options, in order to pursue the best course of action.   

In most cases it is likely that the parties should consider trying to resolve the dispute without formal legal proceedings. There are a number of forms of alternative dispute resolution methods that may assist the parties to resolve the dispute without going to Court.  

Alternative Dispute Resolution 

Alternative dispute resolution methods such as negotiation, mediation, and arbitration can be used to resolve disputes outside of court. These methods can be faster and less expensive than pursuing formal legal proceedings, and they can also help to maintain business relationships.  Our Sydney dispute resolution lawyers will help you negotiate a favourable settlement or resolution.

In some instances, the contract may have mandatory alternative dispute resolution mechanisms which need to take place before any of the parties can sue. Best to get legal advice on the contract before deciding the next course of action.   

The Key Takeaway

Contractual disputes are normally complex and actions taken by parties could result in a number of potentially damaging outcomes.  

It is vital that you carefully consider all of the terms of the contract before entering it. It is also important that parties understand the terms of the contract and how they operate at every stage of the contract.  

If a party has any issue arising with the terms of the contract, their operation and/or performance of the contract, legal advice should be sought as soon as possible and before action is taken that may adversely affect that party’s rights and may result in liability.

Our experienced team of dispute resolution lawyers at Progressive Legal are here to need help you with regard to contractual disputes. Call us on on 1800 820 083 on make an enquiry below to get in touch with our team. 

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