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Skip to 0 minutes and 4 seconds LLOYD ENGLAND: What are some of the key questions you should ask when going into an agreement?

Skip to 0 minutes and 9 seconds ROSS HYAMS: What is required of me? I think that would be the first thing you’d want to ask. What am I meant to do here, how much is it going to cost me, and what are you going to be doing? So a contract is all about both people agreeing to do something for each other. What you might be doing is giving me money, but I would like to know when? I would like to know what happens if I don’t get? So I think the first thing is what of the requirements? What are the obligations on both parties? And I think that’s probably the most essential starting point.

Skip to 0 minutes and 34 seconds And then I think you’d also have to go, well, what constitutes an agreement? At what point have we agreed that we’re both going to be providing services to each other or money or whatever. So you want to ask those questions before you even start it.

Skip to 0 minutes and 47 seconds LLOYD ENGLAND: Where would you go for help, if it goes wrong?

Skip to 0 minutes and 51 seconds ROSS HYAMS: Well, there are various places. Obviously, lawyers, one place you want to go, but before you start lawyering up there are places like community advice bureaus. There are ombudsman in relation to when you’re dealing with government authorities, for example. There’s a variety of sources out there that you can go and see before you have to go and see a lawyer. And I’d start with an online search. That’d be always my starting point.

Skip to 1 minute and 15 seconds LLOYD ENGLAND: Great. Can we touch on using the internal complaints?

Skip to 1 minute and 20 seconds ROSS HYAMS: Good contracts, you’re going to find a review process within the contract itself. So there’ll be clauses in the contract, and you hope you’ll be able to see these, and if they weren’t there, you’d hope you’d be able to put them in, which deals with what happens if the contract goes wrong. So some, sort of, internal review process first. And for a lot of situations, there are internal review processes that you can go through. With somebody who’s independent, a third party can look at what went wrong and try and resolve for both parties. After that you can start going to external processes like ombudsman and that, sort of, thing.

Skip to 1 minute and 50 seconds But usually there will be an internal process built in if the contract’s a good contract.

Skip to 1 minute and 54 seconds LLOYD ENGLAND: Great. How important is it to maintain a good contractual relationship?

Skip to 1 minute and 59 seconds ROSS HYAMS: Look very important. You don’t go rushing off to the lawyer the minute something goes wrong. Part of the contract is that you’re agreeing between the parties for them to do things for each other, and so you need to keep the communication open. If money was due on a certain date and you didn’t get it that date, you don’t go racing off to a lawyer. You speak to the other party, and you say what went wrong? Can we talk about extending the time or something? So I think it’s really a matter of keeping the communication channels open. Don’t get all rigid about what’s required, and just maintain some flexibility before you start racing off and getting reviews and lawyers.

Skip to 2 minutes and 33 seconds LLOYD ENGLAND: Why is it important to keep documentation relating to our contracts?

Skip to 2 minutes and 37 seconds ROSS HYAMS: So that there’s no disagreement about what was agreed it has to be very important that you keep a record because people have different memories of things. And if you rely on your memory of what you agreed upon, it’s a recipe for disaster. So it really should– contracts should be reduced to writing. Now, you can still have contractual obligations if it’s not reduced writing, so let’s get that one straight. And you ever want to go back and say what was agreed upon, it should be in writing, some form of writing to prove who agreed to do what.

Skip to 3 minutes and 6 seconds LLOYD ENGLAND: Yeah, great. Why is it important to get advice on your rights at the beginning?

Skip to 3 minutes and 12 seconds ROSS HYAMS: Well, you can be seriously disadvantaged if you enter into the contract, and it’s formalised and you don’t know what you’re getting yourself into. There’s no way you should either sign a contract or indeed agree to any form of contract, if you don’t understand the terms, or if you feel that you’re being disadvantaged by it. And it really does come down to a power imbalance in that situation. Some situations you find yourself in when they say, well, take it or leave it. That’s the contract. Sign up. If you don’t like it, you leave it, or if you don’t want to leave it, then you get somebody to help renegotiate the terms for you.

Skip to 3 minutes and 42 seconds But you should not enter into a contract which provides for obligations on you that you don’t understand or that you think are too harsh, because you will be stuck with them. So you really need to treat that seriously.

Skip to 3 minutes and 54 seconds LLOYD ENGLAND: Great. Thanks, Ross.

The Ross Hyams Perspective

Ross Hyams is an educator and law practitioner. Here, Ross shares with Lloyd his unique perspective on the essential things you need to know before entering into a contract.

We know that it’s one thing to learn about contract law but it’s always different to apply these principles in the real world.

Whilst we can not give you any general legal advice about your particular contractual obligations, we can provide you with these helpful suggestions that could make navigating contracting more easy for you.

Want to learn more?

Go to Downloads to access a checklist of contract law essentials and See also for a list of industry regulators that may be able to help you.

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This video is from the free online course:

Law for Non-Lawyers: Introduction to Law

Monash University