The information contained in the article was written specifically for those retailers, discusses general principles only and shouldn’t be relied on as being relevant to you.
Is there a contract?
Contracts may be written, oral, or contain a combination of written AND oral terms.
There is often considerable difficulty proving terms which are agreed orally, especially if a dispute ends up in a court or tribunal hearing where the existence of oral terms can often only be proven by evidence given by witnesses in a witness box and subject to cross examination by the other side’s solicitor or barrister.
The logical conclusion – you should rely on written terms of a contract and not any oral agreement. If you’re going to change the terms of any standard written contract – do so only in writing not by using or relying on phrases such as “she’ll be right”, “oh we won’t be relying on that”, “ignore that bit”, “you know what we mean **wink, wink, nudge, nudge**” etc.
Elements of a contract
All of these elements are strictly required and have been for a very long time:
- offer (e.g. a catalogue containing a price is an offer to sell at that price),
- acceptance (e.g. the placement of a purchase order contains acceptance of your offer to supply at a known price),
- communication of acceptance (e.g. if a customer takes your standard contract home with them and signs it, but never gives it to you, there is no contract that they can rely upon), and
- consideration which is the price stipulated by you and paid to you by the purchaser in exchange for your goods.
And if a contract is breached?
The innocent party (i.e. who hasn’t breached the contract) could seek the following:
- damages – which is a sum of money designed to put them in the position they would have been in had the contract had not been breached, in other words to compensate them for losses,
- specific performance – which is an order or direction by a court or tribunal that the party who has breached the contract has to perform their end of the bargain, and
- an injunction – which can be used to prevent ongoing breaches (e.g. you are ordered to cease trading in breach of a non-competition clause in a franchise contract).
When to get advice
Solicitors are not cheap and therefore you should limit legal involvement where possible, especially concerning standard contracts.
You should seek legal advice:
- when drafting a:
- standard employment contract, if you use one, or
- standard contract with installers and customers,
- contracts involving high-value transactions, especially if the deal proposed contains some unusual terms, or terms you are uncertain about,
- if you are being sued, or if it someone is threatening to sue you and there is a significant amount of money involved,
- franchise agreements, partnership agreements, shareholders agreements or any other agreement that is proposed to you which is significant to your future business arrangements, and
- contracts for the purchase or sale of land (in accordance with the usual practice in your state) or other significant asset.
If in doubt – don’t be a “bush lawyer”! Seek legal advice and know where you stand.