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CONTRACTS - ANDREW’S LIST OF STANDARD CLAUSES 

The following are examples of contract terms which articulate basic concepts which arise on many commercial contracts. It is not recommended that these be used without first obtaining legal advice to see if and if so how the concept and the text should be developed to address and properly accommodate the issues in any particular contract. For example often in commercial contracts numerous terms will be defined to have particular meanings and these will have precise operation throughout a contract, and if you get that wrong, your contract won’t make any sense and won’t be enforceable the way you might intend. Legal advice is required often to ensure that the contract will work as intended. But these are some examples of issues that arise, and how they may be addressed in a contract: 

Extension of Time 

Add the following: 

"If the Consultant is delayed in performing the Services by an act or event beyond the reasonable control of the Consultant, or by an act or omission of the Principal, then the Consultant shall be entitled, without penalty, to a reasonable extension of time for the performance of the Services." 

A simple clause such as the one above should be sufficient to address any consequences of circumstances beyond reasonable control - such as the Covid 19 Pandemic 

Limitation on Liability 

Add the following: 

OPTION A - short 

“The Consultant’s aggregate liability arising out of the performance or non-performance of its services, under the contract shall be limited to 5 times the Consultant’s fee (excluding GST and reimbursable expenses) or $1 million whichever is the lesser.” 

OPTION B - long 

“Notwithstanding any other provision in this Contract to the contrary, the Consultant’s aggregate liability, arising out of or in connection with the Consultant’s performance or non-performance of the Services, whether under the law of contract, tort (including negligence), statute, equity or otherwise, shall be limited to the extent permissible by law to 5 times the fees payable to the Consultant under this Contract (excluding GST and the Consultant’s reimbursable expenses) or $1,000,000, whichever is the lesser sum.” 

Fitness for Purpose 

Add the following: 

“... having due regard to the assumptions that the Consultant can be reasonably expected to make in accordance with sound engineering practice and exercising the level of skill, care and attention required of it under this Agreement.” 

Right to Suspension/Termination on non-payment 

Add the following: 

“If the Client defaults in payment of any monies due to the Consultant, and that default continues for fourteen days, the Consultant may give the Client written notice specifying the default and the period within which that default must be rectified, which period shall not be less than seven days from the date of service of the notice. If the Client fails to rectify the breach within the period specified in the notice, the Consultant shall be entitled to suspend or terminate performance of the Services without further notice.” 

Entire Agreement 

Add the following: 

“This Agreement: 

1. Constitutes the whole agreement in relation to its subject matter and supersedes any
   previous agreement between the parties in relation to that subject matter; and 
2. Without prejudice to the generality of the foregoing and to the extent permitted by law, excludes any warranty, condition or other undertaking implied at law or by custom, usage or course of dealing; and
3. Each party confirms that this Agreement is made on the basis that, neither party has been induced to enter into this Agreement by, nor has relied on, any representation, warranty, assurance, covenant, indemnity, undertaking or commitment (“Representation”) which is not expressly set out in this Agreement; and 
4. Each party’s only right of action in relation to any Representation given or action taken in connection with this Agreement shall be for breach of this Agreement. All other rights and remedies (including those in tort or arising under statute) are excluded. 
5. This clause shall not limit or exclude any liability for fraud.” 

Exclusion Clause 

Add the following: 

1. “Neither party shall be liable to the other (whether in contract, in tort (including negligence), under statute or otherwise) in respect of any actual or expected: 

a. Loss of profits;
b. Loss of revenue;
c. Loss of goodwill;
d. Loss of use;
e. Loss of business of contract;
f. Loss of opportunity;
g. Increased costs or expenses;
h. Loss of savings;
i. Ex gratia payments or any other liability voluntarily assumed;
j. Wasted expenditure including pre-contract expenditure: or
k. Special, indirect or consequential loss of any type or pure economic loss including any 

loss arising out of either Party’s liability to any other person, and whether or not reasonably foreseeable, reasonably contemplated or actually contemplated by the Parties as at the date of this Agreement. 

2. For the avoidance of doubt, the losses referred to in the clause above include both direct and indirect loss. 

Proportionate Liability – as between the Client as Plaintiff, the Consultant as Defendant, and other Contractors as other Defendants (note some jurisdictions have legislation which will either presume or presume to exclude (unless an express statement to the contrary is made) proportionate liability) 

Add the following:

"Notwithstanding anything else in this Agreement, and to the extent permissible by law, the Consultant will be liable to the Client, whether under contract, in tort, under statute or otherwise, for any injury, loss or damage, only to the extent and in the proportion to which such injury, loss or damage is caused by the fault of the Consultant." 

ADD FOR WA 

"The Consultant will not be liable to the Client for any injury, loss or damage to the extent that it is caused by the fault of the Client.” 

“To the extent permissible by law, any claim or action by the Client against the Consultant under this Agreement, in tort, under statute or otherwise, shall be or be deemed to be an apportionable claim for the purpose of the application of any legislation relating to the apportionment of liability." 

Apportionment of Liability – between the Consultant and other Contractors as multiple Defendants 

1 Add the following: 

“The Consultant shall be liable to its Client for loss or damage suffered by the Client or any third party only to the extent that it is the fault of the Consultant.” 

2 Add the following:
“Any liability of the Consultant arising out of the performance of its Services shall be reduced to the 

extent that an act or omission of the Client contributed to that liability.” 

Indemnities 

Consider the following: 

• Clearly state the intended scope of the indemnity 
• Consider who should have the benefit of the indemnity and check interaction with third party
  rights clause 
• Expressly state if indemnity is intended to be unlimited 
• If indemnity is to be limited consider excluding any claim for common law damages for excess 

Suspension/Termination in the event of default of payment

Add the following:
“If the Principal defaults in payment of any monies due to the Consultant and that default continues for 14 days, the Consultant may give the Principal written notice specifying the default and the period for its rectification which shall not be less than 7 days from the date of service of the notice. If the Principal fails to rectify the breach within the period specified in the notice, the Consultant shall be entitled to forthwith suspend or terminate the performance of the Services without further notice.” 

Co-insured qualifications
 

Add the following to correspondence:
“The Consultant is an established company. Its insurances are appropriate for the specialist engineering services provided by the Consultant. The Consultant is unable and unwilling to amend the terms of its insurances if the Client finds them unsatisfactory. The Consultant is unable to effect insurance in the joint names of the Consultant and the Client for any insurance policy.”
 

Sub-consultant – under a Head Contract

Add the following:
“Notwithstanding any other provision in this Agreement, the Consultant shall not assume any liability, perform any obligation or fulfill any requirement under the Head Contract that is not within the Consultant’s reasonable control and which is not directly applicable, appropriate and relevant to the Consultant’s services to be performed under this Agreement” 

Liquidated Damages
 

Consider the following: 

Increased certainty and reduced litigation 

Enforcement as debt 

• Actual loss does not have to be proved 
• Rules on remoteness and mitigation do not apply 
• Rule against penalties  
• Genuine pre-estimate of loss 
• Commercial justification 

Consider: 

• whether the sum is a genuine pre-estimate of loss  
• record negotiations about liquidated damages and document commercial factors 
• whether an alternative mechanism can be offered 
• how liquidated damages interact with other contractual remedies 

Intellectual Property & Copyright

Add the following:
“Upon payment of the Fee the Consultant grants to the Client - a fee-free, royalty-free, world-wide (or within territory), non-transferable licence to the intellectual property - in any drawings, documents, computer software or any other work product developed by the Consultant for the purpose of performing the Services – for the purpose of commercialisation (or expressly not) / including a right to sub-licence the intellectual property (or expressly not) / for the purpose of use with the Client’s widget / for the purpose described in the contract details.”

[Concepts around intellectual property need to be managed with precision depending on the nature of the work that is intended to be produced under the contract, who is intended to then own that work and what they can do with it – you need to be clear what is being produced, who owns the background IP, who gets to own the new IP and what anyone can do with the new IP.]

“Unless stated expressly to the contrary in this Agreement, the Consultant retains all intellectual property in the drawings, documents, computer software or any other work product developed by the Consultant for the purpose of performing the Services.”
 

"Notwithstanding anything else in this Agreement the Consultant retains all intellectual property in all background intellectual property of the Consultant.”
 

Contract for supply of goods or services 

A simple clause such as the ones below should be sufficient to address any consequences of circumstances beyond reasonable control - such as the Covid 19 Pandemic - or some other unexpected circumstance which disrupts a party's ability to comply with their obligations under a contract to provide goods and/or to perform services.  

Extension of Time 

Add the following:
"If the Consultant is delayed in providing the goods and/or performing the Services by an act or event beyond the reasonable control of the Consultant, or by an act or omission of the Principal, then the Consultant shall be entitled, without penalty, to a reasonable extension of time in which to provide the goods, and/or to perform the Services." 

Basis for Termination 

Add the following:  

"If the Consultant is delayed in providing the goods and/or performing the Services by an act or event beyond the reasonable control of the Consultant, or by an act or omission of the Principal, then, after a reasonable period, (but in any event not exceeding 20 business days), the Consultant or the Principal, shall be entitled, without penalty, to terminate the Agreement by notice in writing." 

South Australia has a piece of legislation, which was developed out of laws aimed to address domestic violence, but which has very broad, enabling and agile language, and as a consequence is well suited to addressing on-line bullying and abuse. 

The Intervention Orders (Prevention of Abuse) Act 2009 (SA):

o Is an Act, which provides for intervention orders, in cases of abuse and for other purposes.

o The objects of the Intervention Orders (Prevention of Abuse) Act 2009 (SA) are to assist in preventing non-domestic abuse, by providing for the issuing of intervention orders (Section 5). 

o There are grounds for issuing an intervention order against a person (the Defendant) if it is reasonable to suspect that the defendant will, without intervention, commit an act of abuse against a person; and the issuing of the order is appropriate in the circumstances (Section 6).

o An intervention order may be issued for the protection of any person against whom it is suspected the defendant will commit an act of abuse (Section 7). 

o Section 8 provides that:

• § Abuse may take many forms including psychological abuse;
• An act - is an act of abuse - if it results in, or is intended to result in, physical injury, emotional or psychological harm, or damage to property in the ownership or possession of the person; 
• Emotional or psychological harm includes distress, anxiety fear, that is more than trivial;
• Examples of emotional or psychological harm include: 
  1. Publishing or transmitting offensive material by means of the Internet or some other form of electronic communication in such a way that the offensive material will be found by, brought to the attention of the person
  2. Communicating with the person, or to others about the person, by way of the Internet in a manner that could reasonably be expected to cause emotional or psychological harm to the person
  3. Keeping the person under surveillance 
  4. Directing derogatory taunts at the person
  5. Otherwise threatening to cause the person emotional or psychological harm or an unreasonable denial and non-consensual denial of financial or social autonomy or to cause damage to property in the ownership or possession of the person or used or otherwise enjoyed by the person

o If a defendant commits an act of abuse against a person, or threatens to do so, in order to cause emotional or psychological harm to another person, then the defendant commits an act of abuse against the other person (Section 8 6)).

o An act of abuse may be committed by a defendant against a person with whom the defendant is not, and was not formerly, in a relationship and such an act of abuse is an act of non-domestic abuse (Section 8 9)). 

o A person against whom it is alleged the defendant may commit an act of abuse may make an application to the Court for an intervention order (Section 20 1) b)).

o At the preliminary hearing the Court may issue an interim intervention order against a defendant if it appears to the Court that there are reasonable grounds for issuing the order (Section 21 3) a)). 

Section 21 3 b) also provides that the Court may dismiss the application on grounds that it is frivolous, vexatious, without substance or has no reasonable prospect of success or any other grounds considered sufficient. 

Once a hearing takes place the Magistrates’ Court may then confirm the interim intervention order issued against the defendant as a final intervention order (Section 23 1)). 

A breach of an intervention order, either interim or final, is subject to penalties including a fine and/or imprisonment. 

In about 2005-2007 I worked on a project for the Victorian Government Department of Primary Industries around Carbon Capture and Storage (CCS). The task for this project was to review and recommend amendments for legislation and policy which was or could be touched by all of the component parts of the CCS process - this included laws and policies around: petroleum exploration, mining, transportation of dangerous goods, chemical processing, environment and planning, and injection of material into the water table. The objective was to guide amendments necessary to enable the State Government to progress legally and safely with the projects. The intention being to use CCS as one of the many carbon reduction and climate change abatement projects which the Government hoped to progress over the decades to come. Victoria has vast quantities of black and also brown coal and has a number of coal-fired power plants. Victoria also has large oil reservoirs off the Gippsland coast. At the time Victoria was progressing a pilot project in the Ottway Basin and this was used as a practical example for proof of concept. 

I conducted the review and provided a number of reports. But I always had a nagging feeling, given the rising quantities of carbon dioxide in the atmosphere and the trouble that is causing, that CCS was simply a toxic waste dump by another name, and CCS also came with a substantial risk of release of that gas at some time in the future, for example in the event of a geological movement of the formations in which the gas had been injected. 

However, an article in Science (10 Jun 2016 Vol 352 Issue 6291 pp 1312-1314) - Rapid carbon mineralization for permanent disposal of anthropogenic carbon dioxide emissions - by: Matter, J; Stute, M; Snæbjörnsdottir, S; Oelkers, E, Gislason, S; Aradottir, E; Sigfusson, B; Gunnarsson, I; Sigurdardottir, H; Gunnlaugsson, E; Axelsson, G; Alfredsson, H; Wolff-Boenisch, D; Mesfin, K; Fernandez de la Reguera Taya, D; Hall, J; Dideriksen K & Broecker, W - traces radioactive particles injected with carbon dioxide in Carbon Capture and Storage and reviews progress of the materials. The report indicates that in about two years after the injection of carbon dioxide in a liquid form, the material has transformed to limestone, which is solid, non-toxic, inert and no longer presents any risk. I think that is great and addresses the risks I saw with CCS projects. 

A link to the article which describes the process, the records obtained and the analysis is here - https://science.sciencemag.org/content/352/6291/1312 

I hope this provides you with some comfort.