28 March 2017
Wayne Thomson

On Tuesday 28th March the Queensland ACA Branch hosted Andrew Mackintosh from Thomson Greer Law Firm. Usually talks are of a technical corrosion nature, this talk was of a legal nature.

As many ACA members are commercial practitioners, they are often faced with signing contracts, sometimes many pages long and full of legal complexity. Andrew’s talk entitled “Contractual Risk” was a welcome introduction on how to minimise risk when presented with a service or product supply contract.

Andrew explained to the audience the difference between consequential loss and direct loss, the former having far greater implications when there is a breach of contract. Andrew cited a couple of examples where a defendant successfully defended a claim and one where the claimant won. Merely stating that consequential loss is excluded is not enough to limit the contractor’s risk. Through clear wording, specifying applicable categories and by considering the issue at the outset is a far more effective mechanism to mitigate contractual risk.

Andrew also covered the concept of proportionate liability. This concept arose in response to an insurance crisis in the early 2000s. Proportionate liability refers to how damage to property and economic loss is apportioned to the extent of the responsibility for the damage suffered. It was pointed out that some states contracting out of proportionate liability legislation (NSW, TAs and WA). Queensland prohibits contracting out.

The matter of retentions and bank guarantees was explored and Andrew was quick to point out that the trend is now towards bank guarantees. Andrew offered some tips to manage risk, some of which include Australian Consumer Law, standard forms, supply of goods and services vs sale of land.
A relevant part of the talk was directed at the matter of contracting small business. Small business contracts apply to a firm with less than 20 employees, where a contract value of upfront price is less than $300,000 in one year or $1,000,000 in two years.

The talk was very informative an gave the attendees, no doubt either issuing or receiving contracts, a greater appreciation of the complexities and risk mitigation opportunities for firms in the corrosion prevention industry.

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