Breach of Contract Letter: How to Write a Notice to Remedy Breach in Australia

You need a breach of contract letter. A supplier missed the delivery date. A client hasn’t paid. A contractor walked off site. A business partner isn’t doing what they agreed. You want to hold them to the contract, or get out of it, and you know you need to put something in writing first.

You’re right. In Australian contract law, what you write, and when, determines what you can do next. Here is how to get it right.

Why the breach letter matters legally

A breach of contract letter, usually called a notice to remedy breach or notice of default, does three things:

• It formally puts the other party on notice of the breach and gives them a chance to fix it. Most contracts require this before you can terminate, and even where they don’t, courts expect it.
• It preserves your right to terminate. If you keep performing without complaint, you can be taken to have affirmed the contract and waived the breach.
• It creates the record you will rely on at the tribunal or court.

Send nothing, or send the wrong thing, and you can lose the right to end the contract, or end it wrongfully and become the party in breach yourself.

What the letter must contain

1. The contract. Its date, the parties and the clause or clauses breached.
2. The breach. Precisely what they did or failed to do, and when, with reference to the contract term.
3. The classification. Whether the breach is of a condition, an essential term or a time-of-the-essence obligation (which allows immediate termination), or a lesser term (which generally requires notice and an opportunity to remedy).
4. The remedy required and a reasonable deadline. What counts as reasonable depends on the breach and the contract.
5. The consequences if not remedied: termination, a claim for damages, withholding of payment, or specific performance.
6. A reservation of rights so the letter isn’t read as an election to affirm the contract.

Common mistakes that void the notice

Not serving it the way the contract’s notices clause requires. Giving too short a period to remedy. Purporting to terminate for a minor breach that doesn’t justify termination. Citing the wrong clause. Demanding something the contract doesn’t provide for. Any of these can make your termination a repudiation, flipping you from the wronged party into the one facing a damages claim.

If you’ve received a breach notice

The same rules apply in reverse. Check whether the notice complies with the contract’s notice clause and gives a proper period to remedy. Check whether the alleged breach is real, and whether it’s of a kind that justifies the threatened consequence. Respond in writing before the deadline, either remedying the breach, disputing it with reference to the contract, or proposing a resolution. Silence is the worst option: it is often treated as an admission and can trigger a valid termination.

Special regimes

Some contracts have statutory overlay. Residential building contracts have specific notice requirements under state building Acts. Retail leases require notices under state retail leasing legislation. Construction subcontracts interact with security of payment laws. Consumer contracts are subject to the Australian Consumer Law’s unfair contract terms regime. A letter that ignores the overlay can be ineffective.

DIY vs Claim Done vs lawyer

Put them on notice properly. Get your notice to remedy breach drafted for $49. Done in about 5 minutes. You approve it before it is sent.