Draft Advice on a Contractual Partnership Agreement Dispute Resolution

This essay presents a draft advice on resolving a dispute within a contractual partnership agreement. It examines the possibility of rescission as a remedy, considering misinterpretations alleged by a third party. The advice discusses the relevance of the Contracts (Rights of Third Parties) Act 1999 and explores the process for rescinding a contract under Australian law. It emphasizes the importance of good faith and proper notification in the rescission process. The essay concludes that the misinterpretations do not affect the rights of rescission and that both parties can proceed with rescission in accordance with Australian Law, highlighting potential imbalances in the outcome and the need for equitable fulfillment.

DRAFT ADVICE ON A DISPUTE ON A CONTRACTUAL PARTNERSHIP
AGREEMENT
NAME:
INSTITUTION:
TUTOR:

DRAFT ADVICE ON A DISPUTE ON A CONTRACTUAL PARTNERSHIP
AGREEMENT
Introduction
A partnership can be defined as a relationship between people who are carrying out a business
with a common interest, aiming to make profit. A partnership entails two persons who agree to
enter into a contractual agreement between themselves. Disputes in partnerships are normal,
especially when there is a breakdown in communication between the involved parties.
Remedies for solving this dispute
In the law of contract, rescission means to undo or unmake a contract between parties that have
entered into a contractual agreement.1
To determine this partnership dispute, the first step would be to consider the partnership
Agremnt to check if there is a dispute resolution clause. The most suitable remedy for this
challenge is for both parties to agree in a dispute resolution procedures.
Business parties, in Australia, have a mutual duty to be loyal to one another. This is irrespective
of whether their relationship is managed by a Partnership Agreement. For example, Partnership
Act 1892 may help in resolving this dispute.2
Contracts and third party rights
The third party that alleged misinterpretations involved here is not a party to this contract.
However, in this case, it could be liable for obligations under the contract. This is in accordance
to the contracts (Rights of Third Parties) Act 1999, which is an exception of the statutes that
defines the doctrine of privy of a contract.3 It is also in accordance to the contracts and third
party rights.
Rescission of a contract
Rescission is a type of non-judicial remedy in which the concerned party cuts the contract short.
Rescission can only be available as a natural response to a breach from the involved parties.
Rescission in this case may be available as a remedy for this particular case. This is because this
is because in this case:
1 Deakin, S.F., Morris, G.S. and Morris, G.S., ‘Labour law.’ 2005. (p. 386). Oxford: Hart publishing.
2 International Covenant on Civil and Political Rights, opened for signature 16 December 1966, 999 UNTS 171
(entered into force 23 March 1976)
3 Lee, J.N. and Kim, Y.G, ‘Effect of partnership quality on IS outsourcing success: conceptual framework and
empirical validation.’ Journal of Management information systems, 1999, 15(4), pp.29-61.

A third party has alleged misinterpretations, that is, the party has contracted based on a false
statement that has been made by them.
The misinterpretation will most obviously lead to the loss of rescission rights. In other words,
the rights may be rescinded, that is, restoring the parties to their former positions they were
before contracting. However, the process of rescinding must be dully followed. All the
parties must be informed of the decision first. All the grounds for rescission must be laid bare
for observance of all. In all cases, notices must be supplied when the resending parties
discovers grounds to request for cancellation of a contract.4
For example, on the basis of the Truth in Lending Act, the decision of recession is defined as
the right accorded by the people by the federal law.5 This act gives people opportunity of
three working days to reverse a loan if it is appropriate for them to do so. Within this period
of time, the client can cancel their equities despite the fact that he/she had no notice of them.
The existing law gives statements that conflict about rescission.
Process for Rescinding a Contract
Once it has been determined that the contract has to be rescinded, the contracts have to be
reviewed for clauses within them that could contain statements for rescission. If there are no
such statements, the one seeking for rescission is supposed to look for an attorney who
should confirm the statutes.6
For this case, it has been ascertained that this contract has to be rescinded because of the
noted misinterpretation. However, a rescission notice should be given to the affiliate party
before both parties negotiate to mutually rescind. Otherwise, either of the party may file a
civil law suit.
Despite the fact that the case is determined for rescission, the client has not full filled all the
requirements for rescission. She/he needs to present an equitable fulfillment form that should
be presented to an attorney for confirmation. As alternative to the already mentioned
solution, it is possible to give a remedy for suspension of performance that should be carried
out in good faith. The question whether the concerned party should present an opportunity
for remedial action before sealing the rescission process has been a case that has been of
4 Burton, S.J., ‘Combining conciliation with arbitration of international commercial disputes.’ Hastings Int'l &
Comp. L. Rev., 18, p.637.
5 Lee, Y. and Cavusgil, S.T., 2006. ‘Enhancing alliance performance: The effects of contractual-based versus
relational-based governance.’ Journal of business research, 1994, 59(8), pp.896-905.
6 Easterbrook, F.H. and Fischel, D.R., ‘Contract and fiduciary duty.’ The Journal of law and economics, 36(1, Part
2), 1993, pp.425-446.

conflicting interests.7 Should this decision not be exercised in good faith, there would be a
failure to form a good breach of contract. This remedy would be more conformable to
international standards.
Conclusion
In summary, the misinterpretations involved in this case have left the rights of rescission
unaffected because of the following reasons:
i. The third party was in time placing for a rescission decision. Therefore, there was no
lapse of time. The Unidroit rule will still apply in this performance.
ii. There is no reason to doubt that the rescission right can be lost just like any other
waiver.
iii. Both parties met their requirements for recession, in which notices were supplied too
either parties.
Often times however, the effect of rescission is an unbalanced condition in which one of the
parties gets more advantaged at the expense of another.8 The rule that rescission may not affect
rights of individual parties addresses unhealthy situations which cannot solve all the problems.
The contract might be ended by recession when benefits may be received to one party but in
which no accrued rights may be accrued to one side.
However, in case a contract is breached, that party concerned for aggression on damages may in
addition, be clearly entitled to restore part or all of the price that may have been paid.
It is a law that under the law, the party that may rescind a contract but cannot retain installments
that he has received. However, it is required that purchaser needs to be paid a payment that can
be regarded as a deposit. The overall decision for this problem is recession of the contract. There
is no loss of right of rescission. The two parties can rescind in accordance to Australian Law.
7 Harrison, D., ‘Is a long‐term business relationship an implied contract? Two views of relationship disengagement.’
Journal of Management studies, 2004. , 41(1), pp.107-125.
8 Hagedoorn, J. and Hesen, G.,. ‘Contract law and the governance of inter‐firm technology partnerships–An analysis
of different modes of partnering and their contractual implications.’ Journal of Management Studies, 2007, 44(3),
pp.342-366.

BIBLIOGRAPHY
Harrison, D., ‘Is a long‐term business relationship an implied contract? Two views of
relationship disengagement.’ Journal of Management studies, 2004. , 41(1), pp.107-125.
Hagedoorn, J. and Hesen, G.,. ‘Contract law and the governance of inter‐firm technology
partnerships–An analysis of different modes of partnering and their contractual implications.’
Journal of Management Studies, 2007, 44(3), pp.342-366.
Burton, S.J., ‘Combining conciliation with arbitration of international commercial disputes.’
Hastings Int'l & Comp. L. Rev., 18, p.637.
Lee, Y. and Cavusgil, S.T., 2006. ‘Enhancing alliance performance: The effects of contractual-
based versus relational-based governance.’ Journal of business research, 1994, 59(8), pp.896-
905.
Easterbrook, F.H. and Fischel, D.R., ‘Contract and fiduciary duty.’ The Journal of law and
economics, 36(1, Part 2), 1993, pp.425-446.
Deakin, S.F., Morris, G.S. and Morris, G.S., ‘Labour law.’ 2005. (p. 386). Oxford: Hart
publishing.
International Covenant on Civil and Political Rights, opened for signature 16 December 1966,
999 UNTS 171 (entered into force 23 March 1976)
Lee, J.N. and Kim, Y.G, ‘Effect of partnership quality on IS outsourcing success: conceptual
framework and empirical validation.’ Journal of Management information systems, 1999, 15(4),
pp.29-61.