Contract and commercial disputes: resolving them in and out of court

Most commercial disputes turn on the contract, the evidence and the money at stake. The right first step is rarely a court claim. It is a careful read of the agreement and a strategy that matches cost to value. Most litigated cases settle at mediation.

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Key points

Contract claims must generally start within six years (Limitation of Actions Act 1974 (Qld), s 10). Contractual notice periods can be much shorter.
Misleading or deceptive conduct under s 18 of the Australian Consumer Law is actionable without a contract.
Claims go to the Magistrates Court to $150,000, the District Court to $750,000, then the Supreme Court.
Courts can freeze assets, restrain conduct and order security for costs before trial.
A winner usually recovers only part of its legal costs. Formal and Calderbank offers change that.

General guidance only – not legal advice. Please obtain independent legal advice before relying on any of this information. The law is stated as at September 2026.

What kinds of commercial disputes do we handle?

We act on both sides of these disputes:

Breach of contract: supply, services, distribution, construction and business sale agreements, including warranty and earn-out claims.
Payment disputes: unpaid invoices, retentions, set-off and counterclaims. For an undisputed debt, see debt recovery and statutory demands.
Misleading or deceptive conduct under s 18 of the Australian Consumer Law, Schedule 2 to the Competition and Consumer Act 2010 (Cth). Unconscionable conduct under ss 20 and 21. Example: a business sold on inflated figures.
Joint venture, partnership and franchise disputes, which often raise shareholder and fiduciary duty issues.
Guarantee and security enforcement, including defending claims under personal guarantees.
Disputes with insolvent counterparties, where a liquidator changes the strategy (see insolvency).

We also act in cross-border disputes, including enforcing foreign judgments and awards.

What should you check before suing?

Start with the contract. Look for clauses requiring negotiation, mediation, expert determination or arbitration before court. Check notice provisions, termination rights, time bars and liability caps. If there is an arbitration agreement, the court must refer the parties to arbitration on request (Commercial Arbitration Act 2013 (Qld), s 8).

Preserve evidence early: emails, messages, accounting and delivery records. A well-drafted letter of demand often resolves the matter, and frames the case if not.

A simple contract claim must start within six years of the cause of action arising (Limitation of Actions Act 1974 (Qld), s 10). Many contracts require notice within weeks, and a missed notice can be fatal.

Where are commercial disputes heard, and how does litigation work?

Claims up to $150,000 go to the Magistrates Court and claims up to $750,000 to the District Court. Larger claims go to the Supreme Court of Queensland. Legislation introduced in 2026 would lift the District Court limit to $1.5 million from 1 January 2027.

The Supreme Court’s Commercial List (Practice Direction 1 of 2023) actively manages commercial cases. The Federal Court also hears Australian Consumer Law and Corporations Act claims.

Courts grant injunctions under s 9 of the Civil Proceedings Act 2011 (Qld). Freezing and search orders are made under Chapter 8 Part 2 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR). See our article on recovering assets. A defendant can seek security for costs from a plaintiff company unable to pay them (UCPR Chapter 17).

A claim then moves through pleadings (Chapter 6), disclosure (Chapter 7), evidence, mediation, trial and any appeal. The court can order mediation whether or not the parties agree (UCPR r 320; Civil Proceedings Act, s 43). A contested claim commonly takes a year or more to reach trial.

Costs usually follow the event (r 681). But standard basis costs (r 702) typically recover only 60 to 75 per cent of what you pay. Indemnity costs (r 703) are the exception. A formal offer under UCPR Chapter 9 Part 5 (rr 360–361), or a Calderbank offer, shifts costs onto a party that unreasonably refuses it. Keep litigation proportionate: the UCPR’s stated purpose is resolution “at a minimum of expense” (r 5).

Can you terminate the contract, and what can you recover?

A party may terminate for breach of an essential term, a sufficiently serious breach of an intermediate term, or repudiation. See Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115. Terminating without a proper basis is itself a repudiation, which the other side can accept and sue on.

Damages aim to put you in the position you would have been in had the contract been performed. Specific performance, injunctions and restitution are also available. An agreed sum payable on breach is an unenforceable penalty if it is out of all proportion to the innocent party’s legitimate interests. See Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525.

What should you do when a commercial dispute arises?

Gather the contract, variations and all relevant communications.
Do not terminate, suspend performance or withhold payment without advice.
Preserve documents and devices, and suspend routine deletion.
Follow any contractual notice and dispute resolution steps.
Quantify the loss and the other side’s capacity to pay.
Diarise limitation and contractual deadlines, and decide your objective.

How Taylor David can help

We act for companies, directors, financiers and insolvency practitioners in Brisbane and across Queensland. We can:

advise on rights, risks and strategy
prepare demands, notices and termination advice
run negotiations, mediations, expert determinations and arbitrations
obtain or resist injunctions, freezing orders and security for costs
run proceedings in the Queensland courts and Federal Court, and enforce judgments.

This work sits within our litigation and insolvency practices.

Frequently asked questions

Questions we are often asked

How long do I have to sue for breach of contract in Queensland?

Generally six years from when the cause of action arose, under s 10 of the Limitation of Actions Act 1974 (Qld). That usually means six years from the breach, not from discovery. Australian Consumer Law damages claims also have six years (s 236(2)). The contract may require notice much sooner, so check it first.

Do I have to mediate before going to court?

Not by statute for most commercial claims in Queensland. But many contracts require negotiation, mediation or expert determination first, and a court may stay a claim that skips those steps. An arbitration agreement will be enforced on request. Once proceedings start, the court can order mediation whether or not you agree.

Will I recover my legal costs if I win?

Only part of them. Costs usually follow the event, but the standard basis typically returns around 60 to 75 per cent of what you paid. Indemnity costs are the exception, usually after the loser rejected a formal or Calderbank offer and did no better. A well-judged early offer protects your costs position.

Can I terminate a contract because the other side is late or in breach?

Sometimes. You can terminate for breach of an essential term or a serious breach of an intermediate term. Repudiation, where the other party shows it will not perform, also qualifies. Lateness alone is often not enough unless time is of the essence. A wrongful termination is itself a repudiation and can expose you to damages.

What is misleading or deceptive conduct?

Under s 18 of the Australian Consumer Law, a person must not engage in misleading or deceptive conduct in trade or commerce. Intent is irrelevant, and businesses can sue businesses. Claims often arise from pre-contract representations, financial figures or silence about a material fact. Remedies include damages (s 236) and orders varying or setting aside the contract (s 237).

General guidance only – not legal advice. Please obtain independent legal advice before relying on any of this information. The law is stated as at September 2026.

Related expertise

Litigation →Insolvency →Reconstruction & Turnaround →

The earlier we talk, the more options you have.

To discuss your situation in confidence, call Scott D. Taylor on +61 7 3229 9800, email [email protected] or send us an enquiry online.

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