WA Termination clause of contract - Do "Group members" include sole trader/company?

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pb3

New Member
7 June 2021
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In a supply/distributor agreement with a manufacturer the following termination clause is included -

The distributor represents and warrants that neither it not any of its group members (if any) is insolvent or is deemed or presumed insolvent under any applicable law....

The agreement is between supplier (company) and sole trader. The sole trader owns a pty ltd service company, which was used to provide staff for it's business. The service company was put into liquidation, with no suggestion of the sole trader or business being or presumed to be insolvent or otherwise activating this clause.

The distributor repudiated the distributor agreement for several months (refused to supply goods) after providing the liquidator of the company with all documentation and express authority over the distributor agreement, in an apparent confusion over which entity they were dealing with.

Finally the distributor terminated the agreement under the following clause

Distributor may terminate this Agreement immediately for reasons of non-payment or material breach by the Distributor.

The material breach sited was that the service company (as a group member) was put into liquidation. There were no relevant conflicts between parties during long trading history, and the distributor was aware that the service company was going to be wound up, and was supportive of distributors actions in this regard, providing confirmation that trading would continue.

From the sole traders point of view it appears that the supplier had made a privacy breach, and instead of admitting fault/liability decided to affirm this action as correct, and when pushed to provide a response on the status of agreement consequently terminated.

My questions are
  1. In this context (no definition of "group" present) can the term group members in this agreement bind a contracting sole trader, to the performance of it's service entity (whether or not a related entity) ?
  2. Whether by ipso facto regulations or otherwise, is it a legally effective termination clause where an insolvency event (liquidation) of a company that is related but a non-party to an agreement is the trigger for the termination of the contracting parties agreement?
  3. Given this is a standard form contract (take it or leave it) with the supplier being by far the dominant party, could these clauses, or the use of them in the above example be an example of unfair / deceptive or unconscionable conduct?
Thankyou..