If you own a business in Victoria chances are you've signed more than a few contracts with your customers or suppliers. From your own terms of supply to vendor agreements and leases, contracts form the backbone of business operations. But how do you know if a contract is putting your business at risk or protecting it? What if the terms are illegal or will raise your risk of dispute? That's where you need a business contract law lawyer to step in and help. This guide will walk you through what a commercial and business contract lawyer does, why they matter, and when your business needs one.

What Do Contract Law Lawyers Actually Do?

Commercial or business contract law lawyers specialise in the legal agreements used in your business operations. This lawyer will help draft, review, negotiate, and advise on commercial contracts between two or more parties. For business owners, a lawyer will help to ensure that:

• The contracts or terms and conditions you and your customers agree to are legally enforceable;

• The conditions you are offering or agreeing to are not exposing your business to unnecessary risk;

• The terms and conditions are clear, commercially reasonable and as far as negotiations allow, in your business's best interests.

Whether you're entering a new business partnership, setting the terms of your supply to customers or hiring your first employee, a commercial contract lawyer can help you to draft, review or negotiate the terms and conditions so you can avoid future headaches resulting from disputes and non-payment.

Why Are Contracts So Critical for Businesses in Victoria?

When supplying to individuals and businesses in Victoria and around Australia, you need to be aware of the legal frameworks in your industry. For example, when supplying to consumers and small business your contract terms and business operations must comply with the Australian Consumer Law (ACL) and the Competition and Consumer Act 2010 (Cth). 

This includes the requirement that businesses must not include unfair contract terms in standard form consumer and small business contracts. Due to the wide definitions of these types of contract in the Australian Consumer Law, many terms of trade selling goods or services will be subject to the unfair contract terms legislation. A breach of the unfair terms legislation can not only make conditions unenforceable but also lead to significant penalty for a business, including financial penalties for corporations of (the greater of):

• AUD $50 million;

• 3 times the value of the benefit obtained from the unfair contract term; or

• 30% of the adjusted turnover during the breach period.

A good commercial contracts law lawyer is up to date with the changes in the law and will help your business comply with all the relevant laws that apply to your transactions. That way you focus on running your business without worrying about all the changing laws. 

Common Types of Business Contracts

Some of the most common contracts business owners deal with include:

• Terms of Supply for the sale of your services or products and goods;

• Retail or Commercial Lease Agreements;

• Supplier or Vendor Contracts;

• Employment Contracts;

• IT Services Agreements and Software Licences;

• Service level agreements (SLAs);

• Website Terms of Use and Privacy Policies;

• Sale or Purchase of Business;

• Subcontractor or Independent Contractor Agreements; and

• Shareholder Agreements. 

There are also so many more business contracts. It is not possible to list them all.  However, each contract for your business will carry different obligations, unique risks, and legal requirements. Your business requirements and protections will also be unique to your own business operations and circumstances. A good commercial or business contract law lawyer will take a tailored approach to drafting, reviewing or negotiating your contracts based on your business's individual needs and circumstances, which helps provide better protection and helps your business to stay compliant with Victorian laws.

How Contract Law Lawyers Help Prevent Disputes

Often the saying goes that ‘prevention is better than cure'. When it comes to business and commercial legal disputes, contracts are a key prevention tool that all businesses should be using to minimise disputes and help them get paid. A business contract lawyer will help with preventing disputes through drafting or negotiating contract terms that are:

• Clear and understood by the parties;

• Contain the agreed requirements and rules for both parties to the transaction to follow;

• Are tailored and customised to your unique circumstances and role in the transaction;

• Protect your business from non-performance or failures, or provide liability limits in relation to your own performance; 

• Include the rights and process for ending the agreement or resolving disputes; and

• Limit liabilities and protect from non-payment

A lawyer will also often spot red flags and let you know when the risk before you sign anything, which could save your business from an expensive legal battle down the line.

Contract Drafting: Why DIY Templates Can Cost You

Free and low-cost templates online are tempting. But they rarely cover the nuances of your specific business, industry, or location. A “one-size-fits-all” contract can:

• Miss important clauses;

• Contain unenforceable terms;

• Leave you exposed legally; and

• Be invalid under Victorian law. 

A specialised commercial contracts lawyer tailors the drafting and review of each of the clauses to suit your business's unique requirements, delivery and required protection. Knowing you have a contract law lawyer helping with you contract will, give you peace of mind compared with a template, because the lawyer will take the driver's seat and make sure the contract is suitable for your needs.

Enforceable Contracts: What Makes a Contract Legally Binding?

Not every agreement has to be in writing unless the law requires it. However, the following elements are usually needed to form a legally binding contract, whether in writing or verbal:

• A clear offer made and acceptance of that offer;

• Consideration (which is the value exchanged for agreement, usually money);

• Intention to create legal relations and form the legal agreement;

• Clear and certain terms of the agreement; and

• Legal capacity or ability to enter into the binding contract.

If any of these are missing, a party may be able to argue that a contract was not formed and therefore the agreement made is not enforceable.

While verbal contracts with the above elements can be enforceable, in the event there is a dispute, a written and signed contract provides evidence of what the parties initially agreed. This helps make your rights easier to enforce legally and conflicts easier to resolve.

Verbal or less formal agreements, on the other hand, can be challenging to prove and enforce. This is due to the lack of clear written evidence or documentation of what terms and conditions your business agreed to. 

Legal Jargon Decoded: What Do These Terms Even Mean?

There are a lot of legal terms and jargon that can accompany contracts. Here are a few terms business owners often get confused by:

Understanding these can help you negotiate better and avoid being misled.

Contract Review Services: What's Included?

When you engage a commercial contract law lawyer for a review, they typically provide:

• Advice and explanation about what your business is agreeing to do under the contract so that you know your requirements and rights;

• Information about the possible risks to you and your business before you sign;

• Suggestions for revisions or points to negotiate;

• Explanations of legal and practical implications of the clauses;

• Checks for compliance with law and the legal enforceability of the contract

• Assessment of liability, indemnity and termination clauses; and

• Details of uncommercial or potentially illegal terms. 

This service is especially valuable before signing high-value, major and long-term contracts and commercial or retail leases.

In-House Counsel vs. Contract Law Lawyer: Which is Best for You?

For large corporations, an in-house legal team might make sense. An In-house Legal Counsel is employed by the business to be a full-time or part-time lawyer just for that business.  

But most small and medium  businesses and startups do not have the resources or legal need to employ a In-House Legal Counsel. The problem is these businesses still have a need to have a dedicated lawyer who knows and understands their business and unique contracting needs. That's where  a dedicated external business contract law lawyer can  provide a similar service to an In-House Legal Counsel, but on a flexible and as needed basis which does not require employing an extra staff member. 

When Should You Hire a Contract Law Lawyer for your Business Contracts?

Some ideal times to seek legal help:

• Drafting a new agreement or your terms of supply to sell your own services or products

• Signing a retail or commercial lease 

• Negotiating a  supplier or vendor contract

• Buying or selling business assets or shares

• Hiring employees or engaging subcontractors

• Setting up a new company or entering a shareholders arrangement

• Exploring or entering a joint venture or partnership

• Reviewing and updating old agreements

This is just to name a few. If you are about to enter a business transactions, chances are a contract is required, so it would pay to seek the advice of a business contracts law lawyer.

Case Study: How a Victorian Business  Avoided a Costly Mistake

A local Melbourne IT Service Provider and Product Reseller business requested assistance with their online terms and conditions. The terms of supply had been created from templates and other free online conditions. The contract seemed like it was doing the job - until a contract law lawyer from SLB Legal was asked to review the terms. It turns out that the terms and conditions were unclear, lacked key protections, and were at risk of breaching consumer law guarantees and unfair contract term legislation requirements. SLB Legal created a new set of online terms and conditions that created a legally enforceable and compliant contract that protected the business and could be understood by the customers. Now the business has avoided potential consumer law penalties of millions of dollars and reduced the risk of commercial disputes in the courts, which can cost hundreds of thousands of dollars. 

FAQs About Contract Law Lawyers

For common topics, please see our Frequently Asked Questions page

Conclusion

Contracts are the foundation of nearly every business deal. That's why having an expert to assist is vital to the success of your next business transaction. Whether you're just starting or having been running a growing company in Victoria, the right contract legal advice can save you time, money, and sleepless nights.

If you're ready to protect your business and ensure your contracts work for your business, not against it, consider reaching out to Sarah Burke from SLB Legal. With years of experience helping Victorian businesses, Sarah offers practical, personalised legal support business owners can trust.

Ready to get your contracts sorted? Contact Sarah Burke at SLB Legal today.

Disclaimer: The content in this article is not advice of any kind and is provided for general information and interest purposes only. You should always obtain independent legal or other professional advice, based on your own circumstances.

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