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People intending to enter into contractual agreements need to ensure that they are familiar with the terms of the contracts they agree to and the rights and obligations they have.

In the case of Inghams Enterprises Pty Limited v Hannigan [2020] NSWCA 82, Inghams agreed to provide Hannigan with young chickens, who would raise them to adulthood before returning them to Inghams for processing. Inghams had later attempted to terminate the agreement and refused to supply anymore chickens. Hannigan sought damages for a breach of contract. The contract’s dispute resolution clause, which had unfortunately lacked clarity in its terms and intentions, ultimately did not create an obligation for a party to pay damages for a breach. An oversight made in the initial stages of contract formation resulting in a poorly worded dispute resolution clause meant that Hannigan could not attain damages from Inghams for a breach of contract, no doubt impacting his business interests.

From this, we learn that clarification and certainty need to be present when constructing contractual clauses, especially dispute resolution clauses. Contact Morgan + English for assistance.

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