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ARTICLE · 30 MAY 2023

Standstill Agreements Pending Negotiations

Vincent Young
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Contractors with defects claims against subcontractors often commence litigation prematurely to preserve their claims from being time-barred.

AustraliaReal Estate and Construction
Vincent Young
Vincent Young

Price v Spoor [2021] HCA 20 (Price v Spoor)

Contractors with defects claims against subcontractors often commence litigation prematurely to preserve their claims from being time-barred. This occurs despite the costly nature of litigation and its potential to undermine settlement negotiations. The High Court case of Price v Spoor has confirmed that in some cases, standstill agreements may be used to suspend limitation periods from running during settlement negotiations.

What is a standstill agreement?

A standstill agreement involves a party making a claim (such as a contractor) agreeing to hold off initiating legal proceedings against the other party (such as a subcontractor). In return, the other party agrees to suspend the running of time during the limitation period in respect of the claim.

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