After losing his job as an Assistant Chef at a small restaurant in Brisbane, Jeff embarked on a plan to operate a small caf that would offer crepes, pastries and coffee. He would call it Brayzee Caf.

Jeff realised that he would need a commercial coffee machine for his new business and contacted the Elkwood Distributors Pty Ltd (hereinafter Elkwood) which supplies Magganu commercial coffee machines. (Elkwood has about 40 employees in Australia.)

Jeff found out that a Magganu base model sells for $8,500. Elkwood offered to provide Jeff one of its brand-new Magganu base models on the condition that Jeff take delivery of $500 worth of coffee supplies from the company each month for a period of 24 months. After that period, ownership over the coffee machine would be transferred to Jeff. In the event, however, that Jeff failed to take delivery of $500 worth of coffee supplies from the company in any month, he would be in breach of his obligations. Failure on his part to remedy the breach within 30 days from demand by Elkwood would enable Elkwood to demand payment of the full cost of $8,500 for the coffee machine plus $2,500 in termination fees and interest.

Jeff orally agreed to the above terms. The parties also orally agreed that in the event of a dispute arising from their agreement, they would submit their dispute to arbitration.

A dispute arose between the parties in relation to their agreement. Advise Jeff about any relevant arbitration law that will apply to their dispute on the basis of their oral agreement to submit their dispute to arbitration.

Commercial Arbitration Act 2013 (Qld)