Every Sydneysider has been inconvenienced by the delays in the construction of the CBD light rail network. A current court case between the subcontractor and the NSW Government is an example to all businesspeople of the importance of getting the contract right.
Australian law follows the United Kingdom common law principles of classical contract theory, but also with important changes via legislation.
Our principal solicitor, Greg Martin, who lectures in contracts at Western Sydney University, puts it this way:
The contract is the basis for all commercial transactions in our economy.
If there is a misrepresentation during the formation of the contract, which appears to be the allegation by the subcontractor here, it will lead to rescission of the contract as if the parties had never proceeded with it. This is entirely different to termination for a breach of contract.
Why does this matter? Well, the costs and the outcomes are entirely different. NSW taxpayers may potentially be up for billions of dollars in damages, as well as continued delays in relation to the rail project if the allegations made by the subcontractor are correct.
It is so important to get this stuff right at the beginning of the contract.
All of this also applies to small businesses. Get your contracts checked. Make sure that they are properly drafted and that they contain the necessary elements of a contract – offer, acceptance, consideration, and properly drafted terms. If you don’t, then you may end up in costly, long-running litigation, which looks to be the case between the NSW Government and the subcontractor in relation to the troubled Sydney Light Rail project.
Read the full story in this ABC News article.
If you need any advice about getting your contracts right, or in relation to any commercial law matter, give Martin Bullock Lawyers a call on 02 9687 9322.