Two recent decisions by Courts in WA (Fuel Tank and Pipe Pty
Ltd v Integrated Fuel Services Pty Ltd [2012] WASC 71 and
Downing v Newsflash Nominees Pty Ltd [2012] WADC 26)
contain timely reminders about:
- the need to exercise caution before terminating a contract on
the basis that the other party has breached their obligations under
it; and
- the importance of letting the other party know why full
performance of the contract is important and what you stand to lose
if the contract is breached.
On the first point, the Fuel Tank and Pipe case reminds
us that terminating a contract is a serious step to take, even if
you think it is justified because of the seriousness of the other
party's breach. Where there is disagreement as to whether a
particular act or failure to act constitutes a breach of contract,
courts generally expect that the party alleging the breach will not
terminate the contract until they have:
