The de minimis rule prevents intervention from the law when a particular matter is considered insignificant. The rule can be found in many parts of the law and is a useful tool when you want to make sure trivial matters or breaches won’t cause unnecessary trouble for you. 

In order to use the de minimis rule accurately, it’s important to understand the meaning of the term and how it can be applied throughout various areas of the law. Keep reading to find out more. 

What Is The Meaning Of De Minimis

The word de minimis itself refers to something that is so unsubstantial or insignificant it should be disregarded. The term is derived from the Latin phrase de minimis non curat lex which translates to ‘the law does not care about the smallest matters’. 

What Is The De Minimis Rule?

As the term indicates, de minimis means the law will not concern itself with matters that are of little consequence. The de minimis rule can be applied in multiple areas of law, such as contracts, taxes, criminal matters and copyright claims. 

We often see the de minimis rule at work in tax law, where an individual whose yearly income is less than the minimum threshold amount is not required to pay income tax until they earn above the line. 

Even when traveling, certain items only need to be declared at border security if an individual is carrying more than a certain amount of it. Anything less than the minimum amount can be regarded as de minimis (too minor to be concerned with the law). 

If something determined so miniscule in its relevance for the rule of law to apply, is likely to be considered a de minimis exception. 

Example
For instance, if an employee gets a paper cut from a file at work, they likely will not have grounds to sue for negligence resulting from a lack of a safe working space as the matter is trivial at best. 

The de minimis rule can rule that there was very little consequence resulting from the incident. 

When Would I Add A De Minimis Provision In My Contract? 

A de minimis provision can be used in contracts to prevent a party from pursuing legal action when a minor breach of the contract has occurred. 

Example
Stan and James have a month-long contract where Stan is to arrive at James’s place of business each weekday at 10am to aid with software programming. One morning, Stan arrives at 10:15 am. 

Technically, Stan has breached his contract with James. However, the de minimis rule can apply here where James cannot seek legal action against Stan for evading the rules of their agreement as the breach was extremely minor. 

The de minimis rule can also be used as a ceiling for warranty agreements. A fixed, minimum amount can be set so for a warranty to apply to ensure the manufacturer or seller isn’t under any financial obligations for minor incidents. 

Example
Lisa sells phone cases that come with a warranty for any major damages or breaks. In her contract with her customers, Lisa has made use of a de minimis clause. As a result,  any minor damages that are worth less than $30 cannot invoke the warranty agreement. 

Therefore, if a customer approaches Lisa with a minor scratch on their phone case, she likely will not need to provide a refund, repair or replacement. 

The De Minimis Rule In Civil Law

One of the most prominent cases regarding the de minimis rule is the case of Comcare v Sahu Khan 2007. For the de minimis rule to be overcome, the incident or breach in question need to have had an impact to a material degree. 

The courts, in assessing whether there was damage to a material degree to Mr Khan, established that material degree in this context meant the event had to have influenced the course of events.

The case has now set the precedent in determining whether the de minimis rule is applicable or not to a particular case, as the threshold requires the incident to have impacted the course of events in a notable way for de minimis not to apply. 

How Does De Minimis Work With Copyright Laws?

Copyright laws protect the owners of an original work from others who may be using their work without their permission – this is known as a copyright infringement

The de minimis rule can apply when a breach of copyright has been minor. This can get tricky in the area of copyright law because a lot of things are automatically copyrighted, so it can be very easy to accidentally use copyrighted material without realising. In such cases, can legal action still be taken?

Despite the de minimis rule existing, you should still be aware and do your best to avoid infringing any copyright laws, as it’s best to avoid that kind of scenario all together. Chat to our intellectual property lawyers if you need help. 

Should I Get A Lawyer To Review My Contract?

Yes, it’s always important to seek the professional advice of a legal expert when entering into contracts. As simple as they may seem, contracts can get pretty complicated fast – it’s always best to have someone who knows what they’re looking for on your side. 

If you have any concerns about your contracts or questions, don’t hesitate to reach out to us! 

How Else Can I Make Strong Contracts?

There are a number of ways to make your contract stronger. In essence, the provisions of the contract should be catered to the unique needs to the parties to it. 

A strong contract can foresee any potential disputes or scenarios which can cause distress and makes provisions for this so the parties to it can remain protected. A few ways a contract can be made stronger is by: 

  • Creating internationally enforceable contracts, if the provisions need to be extended to more than one jurisdiction (this is particularly important if your business conducts activities overseas)
  • Make sure it’s in writing – verbal agreements are still legal, however they are much harder to enforce without any tangible evidence
  • Be as clear as possible on the most basic terms such as dates, parties and purpose of the contract – even the smallest ambiguities can be a concern (initialling your documents can help in this scenario!)
  • Include a dispute resolution process
  • Be specific – leave little to no room for alternative interpretations as this can lead to miscommunication and even conflicts 

Ultimately, it’s always a good idea to have a legal professional write or review your contracts before signing. 

Key Takeaways

The de minimis rule is a useful part of the law that can be utilised to make sure minor matters don’t cause you any trouble. When applying the rule to contracts, it’s always advisable to seek the advice of a legal professional. 

To summarise what we’ve discussed: 

  • The de minimis rule is a latin term used in law to describe the concept of the law not interfering in matters that are considered insignificant
  • De minimis can be used in tax law, contracts, criminal matters and even everyday rules society follows
  • In civil law, it was determined for a matter to be excluded from the de minimis rule it must be proven the consequence was to a material degree
  • De minimis us used in contracts to prevent minor breaches of contractual terms becoming a legal issue
  • The concept can also be used to place a cap on when a warranty can apply
  • Minor copyright infringements can also be protected by the de minimis rule 
  • Despite the existence of the rule, contracts should always be reviewed by a legal professional to make sure they are strong 

If you would like a consultation on the de minimis rule, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

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