The devil is in the detail! Before signing on the dotted line, make sure that understand what you're agreeing to!

There are a number of key aspects that should be considered and covered in a well-drafted supply contract. Some of these items may not necessarily be included in standard contracts and therefore you should understand the terminology before considering signing.

Key terminology and how they can form a supply contract:

Price: Is the price fixed during the term of the contract or can the supplier increase the price in certain circumstances (i.e. increased price in raw materials, fluctuation of foreign currency exchange rates)?

Product: Define the type/model, quantity and other specifications of the product to avoid dispute on whether the right product is delivered.

Warranty: The contract often sets out the supplier's obligations in relation to product liability, defects and other warranties. Businesses which import goods from overseas should note that they may still be liable for manufacturer warranties. They should therefore ensure the products are of acceptable quality from the outset or request indemnity from the supplier.

Delivery: If the delivery time is critical for the customer, it should be set out clearly in the contract. The customer may also consider whether compensation from the supplier is necessary if the delivery is not on time. The contract should also clarify when the risk in the goods passes to the customer (especially for international supplies).

Payment: The supplier should specify the timing and method of payment required, as well as the right to charge interest, cease delivery or terminate the contract if the customer defaults in payment.

Retention of Title: If customers are to take possession of the goods before making full payment, the supplier should consider a retention of title clause so that ownership of the goods remains with the supplier until full payment is received.

PPSR: The supplier should also request a PPSR clause allowing the registration of a security interest on the Personal Properties Securities Register over the customer's assets to secure outstanding payments. This will allow the supplier to take priority over other unsecured creditors in recovering the debt if a customer becomes insolvent.

Director's Guarantee: In any event, both the supplier and the customer (usually companies) should request the other side to provide a director's guarantee for the respective obligations under the contract.

There may well be additional, important issues to be included, business by business. When entering into any supply contract, it is always important that you consult a legal practitioner who can guide you through the process. This may save you considerable time and stress in the future.

What if a party wishes to terminate the arrangement?

Usually each individual contract will stipulate terms outlining how each specific contract can be brought to an end. However, if you are seeking to end a contract, then it is definitely advisable to seek legal advice prior to exercising this option. This is because it can become incredibly costly if you fail to end a contract properly and for good reason.

Under contract law, if you purport to end an agreement but do so incorrectly, then the other party may claim that you are illustrating an intention not to fulfil the contract (called a repudiation of the contract). This might then make you liable for damages that you otherwise may not have incurred if you had correctly ended the contract.

How Can Sharrock Pitman Help?

It is important to understand your legal rights when negotiating and entering into supply contracts. For expert legal assistance with supply contracts, please feel free to contact Mitchell Zadow (Accredited Specialist in Commercial Law) on 1300 205 506 or complete the form below.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

Mitchell Zadow

For further information contact

Mitchell Zadow

Mitchell is the Managing Principal of our law practice.

He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.

Repudiation and Termination of a Contract

Changes to Unfair Contract Laws – Be Prepared!

Debt Collection

The devil is in the detail! Before signing on the dotted line, make sure that understand what you're agreeing to!

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

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What to consider when entering into a supply contract

The devil is in the detail! Before signing on the dotted line, make sure that understand what you're agreeing to!

Key terminology and how they can form a supply contract:

What if a party wishes to terminate the arrangement?