By Simon Abraham

2 August 2016

Michael Caine was asked by a journalist about a 1987 movie in which he starred called ‘Jaws: The Revenge’.
He said “I have never seen it, but by all accounts it is terrible. However, I have seen the house that it built, and it is terrific”.

Mr Caine clearly had a good lawyer representing him. A business paying for services needs to have appropriate contractual documentation in place – or else it could just be paying for somebody’s terrific house. The services sector including IT, Education, Finance, Tourism, Construction and Professional Services are a major part of the Australian economy. Most businesses enter into agreements for the supply of services every day. Whilst most people appreciate that there are detailed laws regulating businesses and consumers in relation to the supply of goods, few give much thought to laws relating to the supply of services.

Under the Australian Consumer Law, suppliers are required to provide certain guarantees for services they provide to consumers. In order to obtain the benefit of such statutory protections, the services typically need to be under $40,000, or services which are normally used for personal, domestic or household purposes. It should be clear that many services will not fall into these categories.

Some industries have their own codes (both mandatory and voluntary) that may serve to set out specific standards of conduct for an industry including how to deal with members and customers. Examples include the Franchising Code, the Food and Grocery Code of Conduct and the Code of Banking Practice. A consumer of services can take advantage of standards set out in such codes.

The starting point in any dispute relating to the provision of services is to look at the contract between the parties. In any battle of the forms, a consumer of services needs to be in a position to leverage their negotiating position to ensure they are protected. Conversely, a service provider will typically want to minimise liability to the extent that they are legally able to do so.

The war is typically won by the party that has the best legal advice. Courts don’t generally show a great deal of sympathy for commercial parties that fail to adequately protect their own interests.

The bottom line is to put appropriate documentation in place to protect your interests before engaging any services. If you don’t, the law may not be able to assist later.

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