Tips to consider before signing a contract

A contract is a formal document between two or more parties that is legally enforceable, so it is important that all parties be aware of what they are signing.

All individuals who sign a written contract should also take the time to ensure they understand what is outlined.

Here are some tips to follow when signing a written contract:

Read the entire contract

All parties should read the entire contract- from start to finish. The contract should be consistent with any negotiations that were discussed between parties.

Do not rush

Individuals should not feel pressured to sign a contract on the spot. It is a good idea to take the contract away and read it again, ensuring they fully understand everything listed in the contract.

Negotiate

If a party is unhappy, or does not agree with any clause in the contract, it is important that they negotiate the necessary changes with the parties involved.

Ensure the contract is complete

Never sign an incomplete contract as this could run the risk that other parties will insert a clause in the contract that has not been discussed.

Consider help

Contracts are often complex and written in legal jargon, which can make it difficult to interpret. A professional can assist in explaining the issues of the contract, ensuring that the individual is aware of what they are signing.

Personal insolvency agreements

A personal insolvency agreement (PIA) is a formal way to deal with unmanageable debt without having to declare bankruptcy. It provides a flexible way for individuals to come to an agreement with their creditors to settle debts.

A PIA is a legally binding agreement in which an individual agrees to pay creditors in full or in part by instalments, or a lump sum.

For an individual to propose a PIA certain conditions must be met, they:

-must be insolvent

-must be present in Australia, or otherwise have an Australian connection

-must not have proposed another PIA in the previous six months

For a PIA to work, the insolvent individual must first appoint a controlling trustee to take control of their property. The controlling trustee examines the proposal, makes enquiries into the individuals financial affairs and reports to creditors.

A creditors’ meeting is then held within 25 working days of the trustee’s appointment, at which the creditors consider the proposal. If the proposal is accepted the creditors are then bound by the terms of the agreement if it is rejected the creditors will either vote in favor of bankruptcy or leave the decision to the individual.

The appointment of a controlling trustee:

-automatically disqualifies the individual from managing a business until the terms of the PIA have been complied with

-prohibits the individual from dealing with their property without the consent of the controlling trustee