Is an Oral Contract enforceable In Queensland

Is an Oral Contract enforceable In Queensland : Mubin Ul Haider

HYPOTHETICAL CASE STUDY: the fight of the building contract under the Queensland Building and Construction Commission Act 1991.

The following assessment was based on a hypothetical whereby the application of the Queensland Building and Construction Commission Act 1991 (QBCC) (the Act) was analysed in accordance with a previous caselaw. The main point of analysis was made on section 67G of the QBCC Act 1991.

Under section 67G of the QBCC Act 1991, it states that all building contracts must be in writing if the building work is more than $10,000. If the building contractor fails to put these building arrangements in writing prior to carrying out the required building work, they will be liable for committing an offence. However, there are exceptions under the QBCC Act 1991 that allows for a building contract to still be valid if the building is not in writing. The court in the case of Nichols v Earth Spirit Home Pty Ltd took into consideration this exception under section 67E (while interpreting a decision on 67G), and concluded that contract which are wholly oral can be enforceable, despite it being an offence pursuant to the QBCC Act 1991 (Qld) (the Act). But there are certain requirements the Court is to consider when checking the validity of the building contract in questions, and this will depend on a case-by-case basis.

The purpose of the Section 67G of the QBCC Act 1991[5] is to ensure that all building contracts (more than $10,000 before carrying out or less than $10,000 before finished ) is to be in writing otherwise the affected parties can be liable for committing an offence. To further understand the interpretation of the section, it also explains the formal requirement of what is to be stipulated in writing in a building contract including when the contract does not have to be in writing. Although this is the purpose of the section, there are exceptions which apply. An example, is Section 67G (6) of the QBCC Act 1991where a building contact does not have to be in writing if the work required urgent attention. In addition to this, section 67E also further states that a building contract can still be enforced if a condition of the contract is inconsistent with the QBCC Act 1991. Therefore, these sections of the act including relevant case law should be read together to assist in interpreting and understanding section 67G of the Act.

In the case Nichols v Earth Spirit Home Pty Ltd,  the applicant argued that due to the builder’s offence of failing to put the oral agreement in writing to which he committed an offence. Therefore, the contract should not be considered an enforceable contract. For this reason the applicant argued due to public policy, a person who commits an offence should not be able to enforce a contract whereby they committed an illegal act.  In addition to that, the applicant also argued that the oral agreement is an offence which is consistent in applying with the 67G of the QBCC Act 1991.

On the contrary the respondent argued that there is no mention in section 67G of the QBCC Act 1991 that the wholly oral building contract was illegal, or that public policy will conclude it to be unenforceable. Further to this the respondent argues that regardless of the contract not being in writing (which 67G consider as an offence) it should not defeat the purpose of an oral contract being valid and therefore, the respondent should be entitled of the payment on a restitutionary basis.

Overall, in the court coming to a decision they concluded that, although the respondent committed an offence this was not enough to constitute that the oral contract is still being enforceable. This is because the court found that there is no legislation (specifically in section 67E (2)) to suggest that the oral agreement building contact is unenforceable. Therefore, it is contrary to the public policy argument raised by the applicant and respondent is eligible to raise their rightful claim.

DISCLAIMER : HSC Legal provides hypothetical assessments, articles and newsletters on its website for general and informative purposes only. This hypothetical is based on a previous assessment task which was written by a student for university purposes and was happy to share their analysis of the Nichols v Earth Spirit Home Pty Ltd (2015) case. Please note, any information from these assessments, articles and newsletters should not be taken as constituting to professional legal advice. If you do require legal advice, we recommend that you seek assistance from our legal professions.

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