We have noticed in our practice that many Building Contract
disputes we provide advice on could have been resolved at an
earlier stage – with less stress and less cost.
To use a common example: let's say a client (we can call him
Bob) sells bricks and decides to enter into a contract with a
builder. Bob decides against getting legal advice – the
contract seems straightforward enough, what's the risk?
Things run smoothly for a couple of months until the builder
stops paying Bob. Communication goes back and forth for a week or
so until Bob calls the builder and terminates the contract.
He's had enough!
Bob may think that he had a right to do this – he
wasn't being paid for the products he was supplying. However
Bob is later sued for breach of contract. The contract included a
clause that required 14 days notification is provided before
Worse still, a clause in the contract entitles the builder to a
pre-determined amount of damages in the event that Bob breaches the
contract. And finally, the builder is keeping the goods supplied by
Bob – despite not having paid for them!
The inevitable consequence of all this is costly litigation,
with both sides arguing different versions of events, a differing
interpretation of the clauses of the contract and considering
offsetting debts and cross-claims. All of which could have been
avoided if Bob fully appreciated the contract he was entering into
and taking steps to protect his interests before signing on the
It is unfortunate to see claims against clients that refer to
clauses in a contract that were either misunderstood or not even
considered. Particularly when we would have recommended the removal
of such clauses before the contract was signed.
Clients regularly tell us at the end of these 'avoidable
disputes' that they wish that they had incurred the up-front
cost of obtaining legal advice before signing the contract (or
mortgage, or terms and conditions etc). They realise that
prevention is better than a cure. And we agree!
The real value of legal costs can be hard to properly quantify.
Having good terms and conditions in your supply agreements or good
legal advice before signing (or otherwise entering into) contracts
could save tens of thousands of dollars in the costs associated
with resolving a dispute (whether at Court or not); not to mention
the stress and wasted time.
When considering whether or not to obtain legal advice, the best
question to ask yourself may not be "how much will it cost to
get legal advice" but rather, "how much could it cost if
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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