How to enforce a contract in NSW: a practical guide for businesses

Contracts are the foundation of business. Whether you’re a supplier, service provider, or customer, a written contract is supposed to give certainty. But what happens when the other party doesn’t keep their end of the bargain?

In New South Wales, contract enforcement is possible through a mix of negotiation, formal dispute resolution, and—if necessary—court action. Understanding the steps can help you protect your rights and improve your chances of a successful outcome.

WANT TO DISCUSS YOUR CONTRACT DISPUTE WITH A LAWYER? CONTACT US TODAY

Confirming that a breach has occurred

The first step is always to check the contract itself. You’ll need to identify:

The obligations of each party.
Whether the other party has failed to perform a key obligation.
Whether there are conditions or time limits attached to performance.

For example, late delivery may not be a breach if the contract allows “reasonable extensions.” But failure to pay an invoice by a specific date is usually a clear breach.

Gathering evidence

You will need proof that the breach occurred. Useful evidence may include:

The signed contract.
Emails or correspondence between the parties.
Invoices, receipts, or payment records.
Notes of phone conversations or meetings.

Keeping clear records strengthens your negotiating position and makes it easier to take legal action if required.

Considering remedies

Once a breach is established, think about the remedies available under NSW law. These may include:

Damages: financial compensation for your losses.
Specific performance: an order that the other party actually performs the contract.
Termination: ending the contract and seeking compensation.

The remedy that’s most appropriate depends on the circumstances. For example, if you purchased custom equipment, damages may not be enough — you may want an order requiring delivery.

Attempting resolution before litigation

NSW courts expect parties to attempt resolution before starting proceedings. This may include:

Sending a formal letter of demand.
Engaging in negotiation.
Using mediation or arbitration if the contract requires it.

Often, well-prepared negotiation or a solicitor’s letter is enough to prompt compliance. Litigation should be a last resort.

We can prepare a letter of demand for you – call us today

Court proceedings in NSW

If resolution fails, you may need to commence proceedings. Options include:

Local Court: disputes up to $100,000.
District Court: disputes up to $750,000.
Supreme Court: disputes over $750,000 or complex matters.

Court proceedings can be time-consuming and expensive, which is why many businesses prefer to settle beforehand.

Time limits

In NSW, the general limitation period for enforcing a contract is six years from the date of breach. Missing this deadline can bar your claim entirely.

Final thoughts

Enforcing a contract in NSW requires a mix of strategy and legal knowledge. Getting advice early can preserve your rights, strengthen your position, and often resolve the dispute without going to court.

Call 1800 000 566 to discuss your contract enforcement matter. You can also book a free consultation using our online calendar, or fill in the form below.