News & Events

As of 12 November 2016, the existing unfair contract term protections for consumers have applied to standard form small business contracts. All businesses are expected to review their standard form small business contracts to ensure compliance with the new protections, and to remove or alter any contract terms which may be considered “unfair”.

What contracts are covered?

The unfair contract term protections apply to standard form small business contracts only. A standard form small business contract is entered into when at least one party to the contract employs fewer than 20 persons, and either:

  1. The upfront price payable under the contract does not exceed $300,000.00; or
  2. The contract has a duration of more than twelve months (12), and the amount payable does not exceed $1,000,000.00.

A contract will be deemed to be “standard form” when it is prepared by one party, and is not subject to negotiation.

What is considered “unfair”?

Generally a term will be considered unfair if the term would cause significant imbalance in the parties’ rights and obligations arising under the contract. That is, if the term significantly burdens or benefits one party. Alternatively, a term may be considered unfair if it is not reasonably necessary to protect the legitimate interests of a party.

Terms must also be transparent, and expressed in clear and plain language. Examples of terms that are not transparent include terms contained in fine print, or terms that use overly technical or complex language.

What do you need to do?

At Access Law Group, we recognise the difficulties faced by small businesses in dealing with large organisations. Often, contracts are offered on a ‘take it or leave it’ basis with no room for negotiation, leaving small business with the short end of the stick. If you believe that you are a party to a contract that contains unfair terms, contact Access Law Group for assistance.

Access Law Group also regularly deal with large organisations who seek to enforce terms and conditions in their contracts, yet face difficulties through the litigation process. If you are a large organisation, now is the time to review your standard form contracts to avoid this problem.

If you would like to discuss how the new law may affect you as a small business, or as a larger organisation, please contact James Welch, or our team at Access Law Group in order to arrange a free 30 minute consultation.

A recent decision in the Federal Circuit Court has found a Company liable to pay penalties of $25,500.00 for breaching Section 340(1) of the Fair Work Act. In this case, an employee asked about entitlements under the employee’s collective agreement, and was then terminated.

The Court found that the termination for enquiring about an employee’s entitlements was a significantly aggravating factor, and was deserved of a high level of penalty.

In this case, the employee obtained the benefit of the fine.

Employers must be particularly carefully when disciplining and/or terminating employees who may have raised some form of complaint or work place right as an issue in the lead up to the termination.

In another recent decision of the Fair Work Commission, the Commission found that a delay in an employer acting on allegations of theft from an employee disentitled the employer from summarily dismissing the employee. This is one of the circumstances whereby an employer was entitled to summarily terminate, but still acted harshly as the employer allowed the employee to continue working after the allegations had been made.

In a final comment, the Federal Court of Australia has recently ordered an ex-employee to pay damages for breach of copyright for taking an employer’s confidential information for his own personal use. Whilst the amount of damages was not large, the costs of the proceedings were significant, and it is appropriate to comment that in order to enforce rights, or defend the exercise of rights by others, significant resources are required by all parties when the actual dollar value of damages might be minimal.

Access Law Group is experienced in all aspects of workplace law, and if you wish to discuss any issues arising in your workplace, would be pleased to do so with you without charge in the first instance.

Many people dream of getting out of the rat race and starting their own business. While the decision to start your own business can be exciting, and even liberating, every business owner understands that the process can also be quite taxing. Perhaps the biggest issue when starting your own business is obtaining and retaining a loyal customer base. This is also known as the goodwill of the business.

Because of this, many people are deciding to take the option of becoming franchisees in renowned companies. Some examples of franchise-based businesses are McDonald’s restaurants and Caltex service stations.

There are usual two parties to a franchise, that being the Franchisee and the Franchisor. The Franchisor agrees to allow the Franchisee to use their trade marks, or other registered intellectual property, in return for royalties and other fees payable by the Franchisee. The Franchisee benefits in so far as the Franchisor usually has an established level of goodwill and there is a loyal customer base for its products.

Unlikely other business structures, such as a joint venture or partnership, the Franchisee and Franchisor are not undertaking the business activity in concert, but are governed by the terms of the Franchise Agreement. The Franchise Agreement is the important document which establishes the relationship between the parties, and will specify such items as the fees which are to be paid to the Franchisor, dispute resolution provisions and how the Franchisee is to occupy the premises from which the business will be conducted.

Franchise Agreements are regulated by the Australian Competition and Consumer Commission (ACCC) which enforces the Franchising Code of Conduct (the Code) which came into force on 1 January 2015. The Code sets out the laws which govern the permissibility of certain provisions which have been inserted into Franchise Agreements. The Code can have the effect of rendering certain clauses to a Franchise Agreement void, regardless of whether the parties have agreed to its insertion.

Furthermore, the Code has introduced compulsory disclosure requirements upon the Franchisor which must be served upon any prospective Franchisee at least fourteen (14) days prior to the Franchisee executing the Agreement. The Franchisor is required to disclose such matters as any existing franchises that they may have, their intellectual property and the supply of goods and services which are to be provided to the Franchisee under the Agreement.

The Code has also provided Franchisees with a seven (7) day cooling-off period from the date which they signed the Agreement. Should the Franchisee choose to exercise their cooling-off rights, the Franchisor must return all monies paid to them, subject to any reasonable retention of monies which have been expressly disclosed to the Franchisee. The Franchisor does not have reciprocal rights in this respect.

The parties are also required to comply with the Competition and Consumer Act (Clth) 2010 (the Act) which protects the rights of the Franchisee from, among other things, any misleading or deceptive conduct by the Franchisor.

While opening a McDonald’s or Domino’s Pizza franchise can be financially rewarding, and an exciting experience, one must be mindful of the legal issues which surround Franchise Agreements.

The professional and experienced staff at Access Law Group can assist you with respect to providing the right advice in relation to such Agreements and take some of the stress out from running your business so that you can concentrate on achieving your financial goals.