Case Study 1 - Restaurateur Vs Event Organiser
A provider of specialised foods contracted with an event organiser to sell their dishes from a marquee/ food stall at a 3-day cultural event that was held in the CBD. The final day of the event was cancelled due to severe storms. The event organisers declared a ‘‘Force Majeure’’ in line with the event contract.
To protect the safety of all patrons and staff involved, the organisers of the event heeded warnings of storms and severe weather and advertised widely through social media that the last day of the event was to be cancelled.
The contract between the stallholder and the event organisers contained a ‘Force Majeure’ clause that could be invoked in case of an extreme event subject to stallholders being notified and the organisers taking all reasonable steps.
A ‘Force Majeure’ clause typically allows one party to a contract to suspend or terminate the performance of its obligations when certain circumstances beyond their control arise. Such a clause operates to suspend the contract temporarily. It can terminate an event if the ‘Force Majeure’ continues for a certain length of time.
Under this particular contract, ‘Force Majeure’ was quite broadly defined as an “act or omission or circumstance over which the party could not have reasonably exercised control or taken steps to anticipate or avoid.”
Potentially then, a severe weather event might have triggered its effect in this case. This contract also contained a clause that “indemnified” the event organisers and anyone associated with them against all liabilities whatsoever.
In all likelihood, the indemnity clause may have operated to protect the event organisers from any losses that arose out of any exercise of the ‘Force Majeure’ clause.
Due to the wording of the contract for the event, the Office of the Small Business Commissioner was unable to assist the stallholder in its dispute with the event organiser.
The lesson arising out of this dispute is for those that are considering entering into these types of contracts to carefully consider the wording of exclusion clauses such as those covering indemnity, as well as clauses that might be helpful such as ‘Force Majeure’.
Case Study 2 – Photographer Vs Machine Repairer
A regionally based photographer raised a dispute with a machine repairer who failed to communicate in relation to the repair of an expensive Large Format Printer.
The photographer had invested a considerable sum of money into a Large Format Printer to print his professional photographs for his clients. This complex machine formed the backbone of his production.
The machine developed a problem that meant that the photographer could not produce his work at his premises. He therefore needed to outsource his production work until his machine was repaired.
After a few site visits, the repairer could not diagnose the fault and took the machine back to its workshop where the machine stayed for more than 10 weeks. The photographer however, had been unable to obtain any meaningful information from the repairer as to what the fault was, or when he as likely to get his machine back.
The photographer lodged a dispute with the Office of the Small Business Commissioner. A Case Manager was able to open talks with the repairer’s State Manager, who conceded that neither the repairer, the Australian branch of the printer company, nor its overseas parent company could identify the fault. None of this had been communicated to the photographer.
The Office asked the repairer to liaise directly with the photographer, and suggested that perhaps the national company might consider offering the photographer a significant discount on a new model that would function properly.
The machine importer’s National Office agreed to the suggestion put forward by the OSBC and also offered the photographer an extended 3 year warranty. On top of that, the Adelaide repairer offered to deliver and install the new machine at the photographer’s premises at no cost.
The lesson arising out of this dispute is that regardless of the issues that are encountered over repairs, maintaining communications with your customer should remain a key focus for all small businesses.
Case Study 3 – Retail Tenancy Bond Dispute
A (former) Lessee of a retail premise was seeking to negotiate the release of their bank guarantee with the Lessor.
A former Lessee, with the assistance of a translator, contacted the Office of the Small Business Commissioner seeking assistance in communicating with the Lessor. Unfortunately the Lessor did not clearly understand when he needed to release the bank guarantee to his former Lessee.
After a period of facilitated negotiations, the Lessor agreed to release the original of the bank guarantee back to the Lessee, via the Office.
The Office then contacted the former Lessee who was able to attend and take possession of the original bank guarantee and return it to their bank.
This series of facilitated communications led to the successful resolution of a complex dispute. It was overseen by the Office and successfully resolved at no cost to the parties.