Commercial Contract Disputes: Lessons from Hederics v Spare Weel

Last Updated on 09/09/2026 by Damin Murdock and Malak Amgad

Commercial contract disputes frequently arise when agreements fail to clearly allocate responsibility for important future steps. The recent NSW Supreme Court decision in Hederics v Spare Weel Pty Ltd [2025] NSWSC 1171 demonstrates the consequences that can follow when contractual performance depends on future approvals, third parties and strict deadlines. The case provides important lessons for businesses about contractual obligations, causation, proprietary estoppel and specific performance, particularly in complex transactions where several interdependent steps must occur before a party can exercise its contractual rights.

The dispute stems from the breakdown of a long-stan1ding farming partnership between the Hederics family and Spare Weel Pty Ltd. When they separated, the parties entered into a series of agreements regarding the division of the farming land. One of these agreements granted the Hederics a call option to repurchase a specific parcel once it had been created through a future subdivision of the larger property. This subdivision required various steps and approvals before the option could be exercised. The option also had a time limit, meaning that it would automatically lapse if not exercised by a specific deadline, which is exactly what ended up happening. The plaintiffs alleged that they had relied on the defendant’s representations that “everything would be done”; therefore, the defendant should be estopped from denying their entitlement to repurchase the land. They also claimed that the defendant breached an implied obligation to do all things necessary to ensure performance, and their duty to act in good faith. The plaintiff sought specific performance, compensation or damages equal to the value of the land they were unable to purchase. 

The NSWSC ultimately rejected these claims, finding that the plaintiffs did not establish that the defendant’s conduct caused the subdivision to miss the deadline. 

Even though the case concerns a rural property, we think that it offers the following valuable lessons that would extend to commercial property development, shareholder restructures, and any complex commercial transactions that depend on one another. 

• Clearly Allocate Responsibility for future actions

Many commercial contracts require future events before settlement or completion can occur. This includes but is not limited to development approvals, regulatory approvals, third-party consents etc. In Hederics, one of the central issues was determining which party was responsible for taking the steps to finalise the subdivision before the option expires. The plaintiffs argued that the defendant had implied obligations to do everything reasonably necessary to facilitate those approvals. However, the Court accepted that certain implied obligations existed; that alone did not determine the outcome.

Consequently, businesses should avoid general obligations of cooperation. Instead, contracts should expressly specify roles and responsibilities. The more detailed the obligations, the more parties are protected from uncertainty and legal risk. 

• Do Not Assume Deadlines are Flexible 

The call option contained a clear sunset date. Because subdivision had not been completed before that deadline, the option expired. The plaintiffs argued that the defendant’s conduct prevented them from exercising their right, but the court found that establishing some delays caused by the defendant was not enough. They also needed to prove that the alleged breaches actually caused the deadline to be missed. The Court found they had failed to establish that connection.

For businesses, this highlights that contractual deadlines should always be treated as legally significant unless the contract itself allows extensions.

If a project is slipping behind schedule, parties should negotiate a written variation before the deadline passes rather than assuming that future flexibility.

• It’s important to prove causation

There’s a common misconception that proving that a party is in breach is sufficient to obtain compensation. However, this is not usually the case. A claimant must generally establish that the breach caused a loss, and that that loss would have been avoided had the breach not occurred to obtain compensation. 

In Hederics, the Court concluded that even if the defendant had breached implied obligations, the plaintiffs could not prove that the breach was the reason subdivision wasn’t completed before the deadline because there were multiple external factors like planning and registration which involved third parties. 

Therefore, businesses should keep comprehensive records throughout a project including consultant correspondence, council communication, project timelines, approval dates, meeting notes and progress reports. These documents may later become critical evidence in establishing causation. 

• Don’t settle for verbal assurances

The plaintiffs relied on proprietary estoppel, arguing that they were led to believe that they would ultimately be able to buy the land despite the deadline passing. 

The Court rejected this argument as the evidence did not sufficiently show clear enough representations to establish estoppel. 

In our experience, businesses often rely on verbal assurances and discussions during long projects, especially when the commercial relationship is longstanding. However, important details must be formally documented, as verbal agreements are difficult to enforce later. 

• Specific performance isn’t guaranteed

Specific performance is a discretionary equitable remedy that is awarded in a limited capacity. Even if contractual rights exist, courts will often consider whether ordering performance is appropriate. 

In Hederics, the judge indicated that even if causation was established, specific performance would likely have been refused, with damages instead being the appropriate remedy. 

Moreover, the case reinforces a recurring principle of Australian commercial law: courts enforce contracts as they are drafted, not as parties later wish they had been drafted. While implied obligations of cooperation may exist in appropriate circumstances, they cannot compensate for unclear drafting, missed deadlines or insufficient evidence establishing causation.

For businesses entering complex property or commercial transactions, careful drafting remains the most effective form of risk management. Clearly allocating responsibility, documenting variations, monitoring contractual deadlines and maintaining comprehensive project records can significantly reduce the likelihood of costly litigation and improve the prospects of successfully enforcing contractual rights if disputes arise. 

If you are currently entering into a complex commercial agreement, or are involved in litigation regarding contract performance,  feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube, LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.

DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article, and if you require specific legal advice, please contact us.