Archive for 'legal'

Unfair Contract Terms, and How To Determine Them.

Whether it’s to provide a service, gain employment or even just downloading software, it is not unlikely that you would have selected “I agree” to terms of agreement without thinking too hard about it. However, sometimes the terms of a contract may be deemed to be unfair to the signer and could cause greater issues. 

Only a court can determine whether or not a contract’s term is unfair. For example, a term in a standard form  small business contract is “unfair” if it:

  • would cause a significant imbalance in the parties’ rights and obligations arising under the contract
  • is not reasonably necessary to protect the legitimate interests of the party that would benefit from the term, or
  • would cause detriment (financial or otherwise) to a small business if it were to be applied or relied on.

The court must also determine the transparency of a term when determining the unfairness of a term. A term is considered to be transparent if it is:

  • Legible
  • Expressed in reasonably plain language
  • Presented clearly
  • Readily available to any party that may be affected by the term. 

The term may not be transparent if it is hidden in the fine print or written in complex or legal language. A transparent term may still be considered an unfair term, regardless of the level of transparency in play. 

The court must also determine and assess the fairness of the term in the context of the contract as a whole. 

To ensure that your business contracts are compliant and are not at risk of having terms that are deemed unfair, ensure that you speak with a trusted legal professional today. 

Posted on 24 June '21 by , under legal. No Comments.

Unsubscribing From Emails Made Easier With New Legislation

A customer may want to unsubscribe from your newsletters in their inbox for reasons as simple as quantity (too many emails coming in) or relevance (they do not need the product as much as they once did).

Businesses must provide their customers with a simple-to-use unsubscribe function. According to the recently amended Spam Regulations 2021 Act (updated on 1 April 2021), businesses must have a simple and straightforward process in place so that their subscribers can unsubscribe when they want to without jumping through more hoops in a bid to keep them subscribed.

Businesses are also unable to request personal information or force them to log in and create an account to unsubscribe – the process must be made to be as simple as one mouse-click to unsubscribe, and they’re done.

This law aims to provide greater clarity and transparency between businesses and consumers and occurred due to consumers complaining in large number that unsubscribing has become a complicated process, particularly when it comes to being ‘spammed’.

Breaches of the newly amended regulation can result in severe financial penalties of upwards of 6 figure sums; adhering to these new strict rules promotes best-practice performance and outcomes.

Ensuring Compliance according to the new laws is as simple as the following:

  • Use a one-click process, such as an opt-out link. Do not send a follow-up email, and don’t make customers jump through additional hoops to conclude the process.
  • Provide a global opt-out option, allowing customers the opportunity to be removed from all of your business’s lists at the click of a button.
  • Make the unsubscribe link evident so that people can find it easily. Give it prominence by positioning it at the top (with colour, font or size altered to stand out more) or adding a list-unsubscribe header to ensure your customers aren’t stuck trying to find it again.
  • Sign up to feedback loops (which report back on complaints lodged, allowing you to suppress complaints and keep a clean mailing list)
  • Avoid using read mores as it can hide unsubscribe links
  • If there is a survey re-direct after the customer unsubscribes, make sure the opt-out request is already applied. The process should allow subscribers to update their preferences as a way to opt back in.

Reviewing your email programme to ensure that they adhere to the Spam Regulations 2021 Act is the best approach to ensuring compliance. Employing these tips should also establish greater loyalty with customers, as they will trust that you are providing them with a way back out (and without blocking their exit).

Posted on 9 June '21 by , under legal. No Comments.

Electronic Deeds – Are They Valid?

Legally speaking, the purpose of a deed is to transfer a title (a legal document proving ownership of a property or asset) to another person. If you are meeting with an accountant (like us) to assist you in creating a deed, you may be looking to make a trustee deed for an SMSF, or in other cases, create a deed to:

  • Assign intellectual property between related companies
  • Enter into a non-disclosure deed to ensure that any confidential information that you share with another party is not disclosed beyond you and the other party
  • Document an agreement that you have reached with another party after a dispute
  • Provide a bank guarantee or letter of credit
  • Transfer property, such as the sale of a house

Due to a common-law requirement in legislation, deeds are traditionally only able to be created/written on paper, parchment or vellum, which meant that legally speaking, deeds could not be created electronically as there was no provision for electronic means in the legislation.

When COVID-19 hit, this had a significant impact as travel restrictions and office closures made it difficult for deeds not only to be created but witnessed and signed while physically present.

To address this gap in the legal approach to creating deeds electronically, some states have addressed it by bridging it with amendments and temporary legislation.

Currently, New South Wales, Queensland and Victoria are the only states to pass legislation that allows for the creation of deeds electronically. Still, Victoria is the only one to have permanently enforced this is in its legislation. Queensland’s legislation will expire 30 September 2021, and New South Wales’s legislation will expire 1 January 2022.

The lack of express wording concerning the common law requirement in state legislation does raise concerns about the enforceability of electronically created deeds which could invoke validation of the documents.

Queensland’s legislation provides an example of ensuring that the common law requirement is addressed appropriately without alienating the common law requirement for deeds. Section 12N(2) of the Justice Legislation (COVID-19 Emergency Response — Wills and Enduring Documents) Amendment Regulation 2020 (Qld Regulations) states that:

An instrument takes effect as a deed… even if —

  • it is not written on paper or parchment; or
  • it is not an indenture or stated to be an indenture; or
  • it is not sealed or stated to be sealed.

It is important to note that a separate legislative instrument temporarily that modified the Corporations Act 2001 (Cth) (CA) to allow companies to execute documents electronically expired on 21 March 2021. Accordingly, for a company to execute a document electronically, it should have express provisions in its constitution.

If a company wishes to execute a deed electronically, it should only do so if the following requirements are met:

  • The company’s constitution has an express provision that allows for it to execute documents electronically; and
  • It is being executed in a state or territory that has made legislation to allow for a deed to be executed electronically.

To ensure that your deed is in compliance with Australian law, ensure that you speak with a professional (if it’s to do with trusts, you can also come speak with us).

Posted on 2 June '21 by , under legal. No Comments.

The Ugg-ly Debate About Trademark Infringements

Installing a trademark within the business world is a common practice employed by businesses in establishing and distinguishing between competitors with the same products or services. A trademark can become synonymous with a product or service and be the means with which consumers can quickly identify the business.

A trademark can be a brand or a name, a recognisable symbol, a catchphrase, a figure or mascot, or even lyrics. Any of these trademark types can be a vital addition to a marketing strategy for a business. For instance

Registering a trademark grants additional legal protection for businesses from their rivals copying or imitating their work. The purpose of a trademark being registered is to:

  • Grant exclusive rights for using the brand name and authorise others to use the trademark (this is useful for franchisers and franchisees of a trademarked company)
  • Create an asset that can be sold to others
  • Protect against trademark infringement

Trademark infringement occurs when a business knowingly infringes on the intellectual property owned by another business that had been registered as a trademark. There are three circumstances where a trademark may be infringed.

  • The sign is substantially identical to or deceptively similar to the existing trademark
  • The goods or services are closely related or in the same description.
  • The trademark is well known and indicates a link between the owner of the business and the product or service.

Knowing that infringing on a trademark can have legal consequences for your business where you may have to cease trading the product or service altogether

Legal Precedent

Infringing on a trademark can have legal consequences for you and your business, from costly damages to an injunction on the cessation of the trademark by the offending party.

A recent trademark infringement case was settled between an American company called Deckers and a shoe manufacturer in Australia regarding the sale of Uggs by the Australian business.

Ugg is currently a registered trademark to Deckers, who bought the trademark from its original registration owner in the 1980s. However, the term ugg is a colloquial term that Australians have used since the 1930s to describe sheepskin boots. The legal issue that arose is that the Australian manufacturer sold several pairs of “ugg” boots to American customers, infringing on the trademark rights of Deckers.

The outcome of the court case was in favour of Deckers, despite the Australian manufacturer’s defence that the term “ugg” should never have been a trademark in the first place. The court ruled that, while ugg may be a generic term in Australia, it had no such meaning in the United States. It also ruled that the term was not subject to the “doctrine of foreign equivalents,” a legal guideline in the United States that says foreign words for categories of items cannot be trademarked, and that Mr Oygur had willfully infringed on Deckers’s trademark.

Posted on 27 May '21 by , under legal. No Comments.

What You Need To Know About Company Takeovers

Did you know that Australia prides itself on maintaining a competitive business market?

It does this through the use of specific legislation that limits the effect that some mergers or acquisitions of businesses may have on market competition. By maintaining a diverse market of businesses for services, products and goods, competition is improved and the flourishing economy is supported fiscally speaking.

A merger is a legal consolidation of two business entities into one, whereas an acquisition occurs when one entity takes ownership of another entity’s stock, equity interests or assets. They may be completed to expand a company’s reach or gain market share in an attempt to create shareholder value.

Generally speaking, the distinction between the two becomes a little less clear as both types of transactions may result in consolidation of business (and thus a shrinkage in market availability of diversity) but both are legally defined and structured to do different things. They may also have different requirements to be adhered to when it comes to legal compliance.

General Regulations

To ensure that there is not total market domination with regard to ownership of the primary businesses, Australia’s Competition and Consumer Act (CCA) prohibits those mergers that would diminish the competition (or have the effect thereof) in the business market. Under its merger guidelines, the ACCC encourages merger parties to notify the Australian Competition and Consumer Commission in advance if completing a transaction if

  • The products of the merger parties are either substitutes or complements and
  • The merged company will have a post-merger market share in those products of greater than 20% in any Australian market.

The Corporations Act regulates the acquisition of direct and indirect interests in both Australian listed companies and companies with more than 50 members and listed managed investment schemes (usually unit trusts, like REITs). In particular the laws prohibit the acquisition of an interest which results in any person’s voting power in a Widely Held Entity increasing to more than 20% (or any person’s voting power increasing between 20% and 90%). There are exceptions to this rule, including:

  • acquisitions under a formal takeover bid in which all target shareholders can participate
  • schemes of arrangement
  • acquisitions with the approval of a majority of the shareholders who are not parties to the transaction
  • acquisitions of no more than 3% of the voting rights every six months (known as the creep rule)
  • acquisitions under rights issues and underwriting arrangements
  • “downstream” acquisitions of shares in Australian companies that result from “upstream” acquisitions in companies listed on the Australian Securities Exchange (ASX) or on certain foreign stock markets approved by the Australian Securities and Investments Commission (ASIC).

The ACCC may seek injunctions to prevent closing or penalties and divestiture orders for completed  transactions if acquisitions contravene the competitive diversity of the market established thus far.

Foreign Investment Regulation

The Foreign Acquisitions and Takeovers Act (FATA) contains complex provisions regulating the acquisition directly or indirectly by foreign persons of, among other things, shares in australian companies. Foreign investment must be consistent with australia’s national interest, otherwise it may not pass the clearance requirements.

Civil penalties can be imposed if a foreign person undertakes certain transactions without first obtaining the relevant clearance. The general rule is that a foreign person needs approval to acquire a “substantial interest” (20% or more) in an Australian corporation (or holding company of an Australian corporation) where the target is valued above certain thresholds.

If you are looking to acquire another company, organisation or business in the field, but are uncertain about your clearance for doing so, speak with us today. We can assist you in ascertaining whether or not you may be legally able to do so.

 

 

 

 

Posted on 5 May '21 by , under legal. No Comments.

Employer liability in remote working conditions

Now that businesses must have a better idea of the working conditions they will be adopting in 2021, it’s ideal to consider how employer liability changes. 

The health and safety of employees in the workplace is the responsibility of the employer. Employers must protect their employees’ well-being, by taking into consideration the risks involved on the premises where employees work.

If there are employees who will be consistently working from home, or who usually work remotely, then there are some things that employers can do: 

  • Ensure that the work expected of employees from home can be done so with safety
  • Consider making changes to the task so that it can be done safely from home
  • Employees are equipped with the tools and equipment necessary to complete the work safely (this could also include ergonomic computer equipment)
  • Arrangements are made to instal heavy company equipment into the employee’s workspace safely rather than be left to the responsibility of the employee. 
  • Employees have been given the relevant information or been trained to operate all equipment provided to the employees with safety. 
  • Reasonable accommodations have been made for employees who might have disabilities in relation to the work employees are expected to perform. 
  • More steps are taken to ensure employees’ mental welfare

Employee welfare is particularly important when remote working is involved. This is because employees might have no contact with their co-workers and have limited scope. Try to find ways through which employees can interact with one another whilst working remotely. Further, ensure that employees can access mental health support easily if they need it.

Keeping these things in mind will not only protect employers from liability but ensure that employees are being productive. 

Posted on 24 February '21 by , under legal. No Comments.

Customer service strategies to avoid liability lawsuits

Implementing these customer service strategies will help your business avoid liability lawsuits

Conduct follow-ups during the project

During a project, both you and the client can get busy with running the business and making sure everything goes to plan. This means that your client may not have the time to contact you when an issue arises. Setting time aside that is allocated to checking in with them and verify that things are running smoothly will be beneficial in the long run. It will let you address any problems earlier rather than later so that you can take the right steps to avoid a lawsuit down the line. 

Keep clients updated about their project

Keeping your client in the loop helps build trust and means that you might have some leeway if something goes wrong. For example, consider a scenario where you have done all the work but one of your suppliers is late and prevents you from meeting a deadline. If your client has been kept up to date and knows that you have taken all the necessary steps, then not being able to meet a deadline is likely to be received better than abruptly telling them you’ll be late due to a third party (a lot less believable).

Collect and respond to feedback

At the end of a project, conduct formal or informal surveys to give your customers the opportunity to give you feedback. If you end up implementing feedback, let your customers know that you have done so!

Know when to invest time in hyper-personal contact

Not every customer that experiences an issue is going to bring a lawsuit against you. Some customers will need to be given more attention – follow them up, talk to them, carefully listen to their comments, etc. 

Posted on 3 February '21 by , under legal. No Comments.

Protect your business’ intellectual property

Intellectual property (IP) is a valuable asset to any business. It can be anything from a manufacturing process to a trade secret – it is essentially intangible proprietary property. Protecting IP has become increasingly important and the following steps are the minimum precautions you should take to keep your IP safe.

  • Know what intellectual property your business has: Understanding what needs to be protected will help you understand how you can protect it.
  • Know where your intellectual property is: Various devices in the office and outside of the office could contain IP. This includes input/output devices such as printers, cloud-based applications, employees personal devices, third party systems shared with other businesses. 
  • Prioritise your IP: Some of your IP is more valuable than others. Assess the risks associated with losing different types of IP and take steps to protect the high-risk IP first.
  • Label valuable IP: If for whatever reason your business ends up in court, you should be able to demonstrate that a particular piece of IP was protected. This is much easier to do so if it is labelled appropriately. 
  • Physical and digital protection: Use passwords and only distribute them to relevant employees for digital protection. Lock rooms where sensitive data is stored for physical protection. 
  • Educate employees about IP: Inform your employees about IP and what sort of practices they should adopt to prevent leaking IP. 

Posted on 27 January '21 by , under legal. No Comments.

Protecting your small business from legal fallout

Protecting your business from legal fallout isn’t at the forefront when you are focussing your efforts on growing your small business. However, it is necessary. You can take the following simple steps so that you are protected from potential legal issues:

  • Use written agreements: Don’t rely on the aural agreements on their own, confirm what is said in writing. This applies to any new relationship you establish as a business. This also ensures that all terms are clearly understood as there is less scope for misunderstanding.
  • Keep up-to-date paperwork: Having updated documentation and record-keeping whenever changes are made is integral. Maintaining paperwork is important for taxation and auditing purposes.
  • Do your research: Having a basic grasp of legalities associated with your business will be beneficial. Although there may be other industry-specific ones, general areas to build some legal knowledge include intellectual property, finances, employment and labour, marketing and advertising.
  • Register intellectual property: Protecting your intellectual property is vital. You need to protect your creative ideas and designs by registering trademarks and copyrights where possible.
  • Obtain legal advice: Legalities can be complicated and it is important to seek advice to clear any doubts you may have. You could opt for a one-time consultation or continued representation – depending on what your business needs.

Posted on 6 January '21 by , under legal. No Comments.

Partnership Agreements: What you need to know

A partnership agreement formalises the business relationship between two partners. It can cover everything from low-level processes, up to how dispute resolution will take place in the business.

Business partners are personally liable for the business in a partnership, therefore, determining the finer details is extremely important and can prevent complications down the line. The agreement will help allocate the responsibilities and obligations of each partner. It will also help establish the rights of each partner and how profits and losses will be distributed amongst partners.

An agreement should take the following into consideration for it to be an effective piece of documentation:

  • Percentage of ownership: How much will each partner contribute to the business? This contribution could be in the form of capital or equipment and service – regardless, this will determine how much ownership of the business the partner has.
  • Division of profit and loss: Allocation of profits and losses might simply follow the ownership percentages or simply be equal between partners. Regardless of how the division will be allocated, it is important to clearly identify this in the agreement.
  • Length of partnership: The agreement could be for an unspecified amount of time, or the design of the business could lend itself to be dissolved after a given period of time. This should be in the agreement – including if the time frame is unspecified.
  • Decision making and dispute resolution: Outlining a decision-making process and instructions on how disputes between partners should be resolved is extremely important. A meditation clause will help with resolution without the interference of the court.
  • Authority: A ‘binding power’ should be included in the agreement which allocates partner authority. If a business is bound to a debt or other contractual agreement, this can expose the company to unmanageable risks. Including terms that state which partners hold the authority to bind the company and what would need to be done in those situations will assist with reducing or avoiding these risks.
  • Withdrawal or death: The procedures for handling the departure or death of a partner should be stated in the agreement. This could involve how the valuation process will take place and might need each partner to maintain a life insurance policy as well as a designated beneficiary.

Posted on 2 December '20 by , under legal. No Comments.