Executory contracts in insolvency: The Australian perspective

This research considers the treatment of executory contracts in Australian law. More specifically, it considers the intersection of contract law and corporate insolvency law by detailing the treatment of executory contracts in circumstances where a party to the contract has become subject to external administration or insolvency proceedings. The research gives particular attention to the enforceability of ‘ipso facto’ clauses within such contracts, being contractual clauses empowering a termination or modification of contractual party rights which are triggered by the occurrence of an insolvency related event. While ‘ipso facto’ clauses had been upheld as valid in Australia, the enforceability of such clauses was subject to review and legislative reform, including as part of the Treasury Laws Amendment (2017 Enterprise Incentives No 2) Act 2017 (Cth), commencing 1 July 2018. The resulting changes to Australian law are considered throughout this research