Risks in Pre-Contract Talks

UNDERSTANDING HOW EARLY STAGE DISCUSSIONS – BEFORE ANYTHING IS SIGNED – CAN LEAD TO COSTLY LEGAL DISPUTES UNDER AUSTRALIAN LAW

In this episode, Fiona Henderson—commercial lawyer and founder of Argyll Law—looks at how legal risk often begins long before a contract is signed.

It’s a common misconception that legal exposure only arises once the paperwork is in place. But some of the most expensive disputes we have worked on began much earlier—during informal conversations at trade shows, in sales meetings, or over coffee.

This episode explores:

• How casual chats can become binding legal promises
• Why “entire agreement” clauses don’t always protect you
• What Australian Consumer Law looks for in early-stage conduct
• What you can do to reduce risk without slowing down deals

If your team is pitching, demoing, or managing client expectations early in the sales cycle, this video will help you spot risk before it escalates.

 

VIDEO SCRIPT

This is the first in a new six-part video series we’re recording on the road across the Nullarbor. It’s about how to spot contract risks early — and stay out of legal trouble before anything is even signed.

Peter and I are driving back to Sydney after visiting clients in Western Australia.

Peter is kindly behind the wheel. I’m offering occasional — let’s call them helpful — driving suggestions from the passenger seat.

We’ve stopped in Esperance, which is one of my favourite places in Western Australia. Honestly, Lucky Bay — not this bay — is the best beach in Australia. There’s no contest.

Between roadhouses and coffees, I’ve been thinking about one of the biggest misconceptions I see in business:

That legal risk only starts once a contract is signed.

It doesn’t.

In fact, some of the most expensive, time-consuming disputes I’ve ever worked on didn’t come from the contract itself. They came from what happened before.

Those early-stage chats — whether at a trade show, over a coffee, or during a product demo — feel informal.

But in the eyes of the law, they can still count.

And that’s what I want to talk to you about: pre-contract risks.

Think about how deals often start.

You’ve got your sales team, your business development lead — or maybe it’s you, as the managing director. You’re being helpful, commercial, flexible.

You say things like:

“Yeah, that won’t be a problem. We’ll get it done within six weeks, easily.”

Or:

“That machine will give you at least 90% uptime.”

The conversation is friendly, helpful, collaborative — and meant to move things forward.

But here’s where it turns into a trap:

Those casual remarks can later be reframed as binding legal representations.

Especially if the deal goes sour.

And that’s exactly where things get tricky.

Because even if your contract has all the right clauses — “this is the entire agreement”, “no reliance on prior statements” — a court can still look at what was said, shown, or implied before the contract was formed.

Under Australian Consumer Law, it’s not about what you meant to promise.

It’s about whether what you said or didn’t say was misleading or deceptive.

And you don’t need to end up in a courtroom for that to hurt you.

Just having to defend yourself burns time, money, and energy.

In the next video, I’m going to walk you through a real case we ran in the Supreme Court.

It started with a good-natured chat at a trade show — and ended in a multi-week Supreme Court hearing, all because of what was implied in those early conversations.

So here’s my message today:

If your team is regularly in front of clients — demoing, pitching, or just answering questions — it’s worth asking:

Are those conversations leaving you exposed?

At Argyll Law, we don’t just draft watertight contracts.

We help businesses spot legal risks early — right back at the conversation stage — so they stay in control before anything is signed.

If that sounds useful, head over to www.argylllaw.com or direct message me on LinkedIn.

I’ll take a practical look with you at how to protect your business — without slowing it down.