Townsville Community Legal Service Inc
About Townsville Community Legal Service
Areas of law and how we deliver our services
News
Contact us

Contractual issues

Community organisations have the ability to enter contracts through their members (usually the committee or executive) or to those who have delegated authority to do so (usually staff members). These transactions are transactions of the association. Those who seek to enter contracts or transact on behalf of the association must be authorised to do so otherwise no valid contract exists.

There is potentially an action for breach of warranty of authority against persons who purported to have authority. There is no need to provide evidence of authority in Qld as the doctrine of constructive notice operates such as to assume that everyone has notice of all documents on the public register in the case of Queensland held by the Office of Fair Trading.

The Associations Incorporation Act provides:

28 Contracts

(1) Contracts entered into by an incorporated association shall be made as followsó

(a) a contract which, if made between private persons, would be required by law to be in writing and under seal shall be made in writing and under the common seal of the incorporated association;

(b) a contract which, if made between private persons, would be required by law to be in writing signed by the parties to be charged therewith shall be made in writing signed by any person acting under the express or implied authority of the incorporated association;

(c) a contract which, if made between private persons, would be valid in law although made by verbal agreement, and not reduced into writing, may be made by verbal agreement on behalf of the incorporated association by any person acting under authority of the incorporated association.

(2) All contracts made according to the provisions contained in this section shall be effectual in law and shall bind the incorporated association and its successors and all other parties thereto, and may be varied or discharged in the manner in which it is authorised to be made.

(3) A document or proceeding requiring authentication by the incorporated association may be signed by the secretary and need not be under its common seal.
The terms of the contract are most likely to be contained in the retainer between the parties.

The Retainer