Commercial and business law guides

The documents that decide the outcome

When a business dispute lands on a desk, the answer is usually already written down somewhere, or conspicuously not written down.

• Terms and conditions of trade decide whether you get paid, whether you can charge interest, and whether you can recover the cost of chasing the debt. They also decide whether you have security over goods you have supplied.
• A shareholders or partnership agreement decides what happens when one owner wants out, dies, becomes incapable or simply stops contributing. Without one, the default rules apply, and nobody chose those.
• Contractor agreements decide exposure to sham contracting, superannuation and payroll tax. Since 26 August 2024, section 15AA of the Fair Work Act 2009 (Cth) looks at the practical reality of the whole relationship, not the label on the document.
• Confidentiality agreements decide whether you can do anything about the person who took the client list.

Templates are not the problem. Unread templates are. A document that describes an arrangement nobody follows is worse than no document, because it becomes evidence against you.

Buying and selling a business

The contract is usually the last thing that goes wrong. The due diligence is usually the first.

Before you buy, work out what you are actually acquiring. A share sale takes the company with all of its history and liabilities. An asset sale takes the assets you name and leaves the rest behind. The price can be identical and the risk profile completely different.

Then check the things that most commonly derail a purchase: whether the lease can be assigned and on what terms, whether key contracts survive a change of control, whether the equipment is owned or subject to a security interest registered on the PPSR, what happens to employee entitlements, and whether the restraint of trade on the seller is drafted so that it is actually enforceable.

If the business is franchised, the Franchising Code adds another layer with its own disclosure and timing rules. That is dealt with in the franchising guides.

Disputes, and the cheapest point to end them

Commercial litigation rewards the party who prepared before the dispute existed. By the time proceedings start, the documents are already what they are.

1. Work out the actual commercial objective. Being paid, ending a relationship and being proved right are three different goals and they lead to three different strategies.
2. Read the dispute resolution clause in the contract. Many require notice, negotiation or mediation before proceedings, and skipping that step can be fatal to the claim.
3. Send a properly drafted letter of demand. A surprising proportion of disputes end here, and a badly drafted one can create admissions you will regret.
4. Choose the forum deliberately. QCAT, the Magistrates Court, the District Court and the Supreme Court have different limits, costs rules and timeframes.
5. Keep costs proportionate. A dispute worth arguing at $20,000 may not be worth arguing at $200,000 in legal spend, and that arithmetic should be done at the start.

Time limits apply. Most contract and tort claims in Queensland run under the Limitation of Actions Act 1974 (Qld), commonly 6 years for a simple contract, and a claim that expires is not recoverable regardless of merit.