A recent review of contract law cases has outlined several practical lessons for in-house lawyers involved in drafting and managing commercial contracts in 2026. The review examines key decisions from courts in Australia and the UK, offering guidance on payment clauses, multi-party agreements, discretionary powers, contractual machinery, material adverse change (MAC) clauses, and teaming agreements.
In Shao v Crown Global Capital Pty Ltd (in prov liq) [2025] HCA 44, the High Court of Australia clarified that damages can be awarded for breaches of payment mechanisms even if a debt has been discharged. In this case, after a couple separated, the borrower repaid a loan to an account nominated by only one lender instead of both as required. The court found that while the debt was discharged, damages were still available due to breach of the specific payment clause. The court explained that “substantive performance and manner of performance are conceptually distinct.”
Meanwhile, the UK Supreme Court decision in King Crude Carriers SA v Ridgebury November LLC [2025] UKSC 39 emphasized that certain payment-related obligations may be interpreted as conditions precedent. In this case concerning an unpaid deposit for a ship purchase, the buyer failed to provide documentation needed to open an escrow account. As a result, the obligation to pay never arose because confirmation of account opening—a condition precedent—was not met.
The Western Australian Court of Appeal addressed variation of multi-party contracts in Mirabela Nickel Ltd (In Liquidation)(Receivers and Managers Appointed) v Mining Standards International Pty Ltd [2025] WASCA 82. The court confirmed that some parties can agree to vary their rights among themselves if such changes do not affect other parties’ rights or obligations.
In Netdeen Pty Ltd (t/as GJ Gardiner Homes) v Lindfield NSW Pty Ltd [2025] NSWCA 196, the New South Wales Court of Appeal examined discretionary renewal clauses within franchise agreements. The court ruled that broad discretionary language does not automatically grant unlimited freedom; contractual structure and purpose may limit how powers are exercised. It also noted that internal decision-making records could become critical evidence during disputes.
Alphington Developments Pty Ltd v Amcor Pty Ltd [2025] VSCA 48 focused on machinery provisions and notice requirements in contracts related to remediation work at a development site. The Victorian Court highlighted factors influencing how strictly notice clauses should be interpreted: commercial purpose, contract language, and function of the notice itself.
The Mayne Pharma case—In the matter of Mayne Pharma Group Limited [2025] NSWSC 1204—dealt with MAC clauses and warranties in M&A transactions. The court clarified how quantitative thresholds should specify baselines for measuring adverse changes and stated that acts affirming a contract may extinguish termination rights.
Finally, Cirrus Real Time Processing Systems Pty Ltd v Jet Aviation Australia Pty Ltd (2025) FCAFC 85 addressed enforceability issues around “teaming agreements” during tender processes. Despite detailed discussions between parties regarding software supply for a defense contract tender, the court held there was no intention to create legal relations due to unresolved essential terms and non-committal language.
These cases highlight recurring themes: ensuring compliance with payment mechanisms; clarifying conditions precedent; specifying who can exercise contractual rights; maintaining accurate records; considering risks associated with teaming agreements; and defining clear MAC thresholds in M&A deals.
Legal experts recommend reviewing standard contract templates regularly to ensure clarity regarding accrual triggers for payments or deposits tied to escrow arrangements or similar structures.