Commercial Law

14 Jun

Posted at 17:26h in Commercial Law

Earlier this year it was announced that the two remaining locations of Hog’s Breath Café in South Australia were being forced into liquidation. This resulted in outrage from the wider community, with the sudden nature of the announcement causing significant inconvenience and turmoil to employees of the franchise and those who had made prior reservations at the restaurant. In a swift turn of events, Hog’s have announced that they will re-open their doors at Glenelg under new management in hope of reigniting the success that the restaurant chain have known in the past. This incident is a stark reminder that when entering into a franchise, due diligence must be carried out in relation to any legal documents you are signing as well as the Franchise Agreement. A franchisee typically has significant obligations under the agreement in an insolvency event, and those obligations can extend to the individual through personal guarantees. A senate inquiry into the operation and effectiveness of the Franchising Code of Conduct produced a report earlier this year. This report advised that it is vital for a prospective franchisee to obtain ‘professional and informed legal and accounting advice before entering into a franchise agreement or contracts related to a franchise opportunity’. (Parliamentary Joint Committee on Corporations and Financial Services – Fairness in Franchising March...

05 Jun

Posted at 16:16h in Commercial Law

An investigation by the Australian Consumer Watchdog and subsequent interim report by the Australian Competition and Consumer Commission (ACCC), focusing on the warm climate regions such as the Riverland in SA, has revealed concerning practices. These range from disputes over quality assessments to some wine grape growers experiencing wait times of up to 9 months in order to receive payment for their grapes. There is typically a significant disparity between wineries and growers. The ACCC noted that this imbalance is restricting the growth of the Australian wine industry. 4 key points were highlighted in this interim report: Quality assessment - the lack of an objective measure for quality assessment is causing difficulty for growers on delivery. Uncertainty on pricing – the lack of certainty in pricing causes difficulty for growers in managing profitability for their vineyards. The ACCC has recommended implementing indicative pricing for growers. Nevertheless there may be legal ramifications to winemakers by way of price signalling. Long term payments - the Wine Industry Code of Conduct implements a staggered payment method, which takes into consideration both the timing for growers cash flows, and also the timing for wine production after delivery and for orders from retailers and distributors. The ACCC’s report has identified many growers are waiting for periods...

22 May

Posted at 15:19h in Commercial Law

It is common for businesses to provide a warranty against defects to consumers such as to the nature, quality or performance of the Goods or Services. Warranties can be provided in documents, advertisements in your business premises, or in discussions with the customer.  In such situations the warranty document you provide must comply with specific Australian Consumer Law (ACL) requirements. The ACL requirements override anything else you state. You may say that you will: Repair or replace goods (or part of them) Resupply or fix a problem with services (or part of them) Provide compensation to the consumer if any fault arises within 12 months of the purchase of the goods or the supply of services or a combination of goods and services by saying ‘1 year warranty’. In such circumstances the ACL may still give the consumer rights if defects occur after 12 months. Furthermore the ACL sets out what you need to state in a document about warranties, such as procedures to be followed. There is also what is referred to as the Mandatory Text requirement. This is essential for you to state. It is specified in the ACL. The text relates to the guarantees that cannot be excluded. The text specifies the circumstances when the consumer has the choice to have goods or services repaired,...

01 Mar

Posted at 15:01h in Commercial Law, General

Adelaide Franchise Lawyers - Muffin Break backlash for unpaid work Buying a franchise can be a highly rewarding venture both personally and financially. However, as we have seen in a recent incident with Muffin Break, there are a number of important factors that must be considered before signing on the dotted line. In an interview with Muffin Break’s General Manager Natalie Brennan that was posted over the weekend on www.news.com.au, comments that she made regarding Millennials and unpaid work were released. These comments have gone viral, receiving significant backlash from the community. When you buy into a franchise, you are paying for the benefits that come with that brand. Unfortunately you are also exposed to any negative publicity or other risks that the brand incurs. It is important to consider that if you want to sell a profitable business, and there is negative publicity which you have not caused, you may still have issues. We recommend buyers to research the brand, talk to current franchisees, and seek professional advice. Existing franchisees who experience negative publicity should also seek advice as to strategies to mitigate that risk and the legal options available to you. For any advice or assistance in relation to franchising, speak to one...

01 Jun

Posted at 10:47h in Commercial Law

We're wishing our own Eugene Reinboth a big congratulations for being one of the very few solicitors recognised by Doyles Guide as a leading solicitor practicing in both contentious and non-contentious intellectual property matters within the South Australian legal market Doyles guide develops a guide to lawyers each year based on independent research. Upon conclusion of the research stage, individuals and firms are ranked according to volume and quality of positive feedback.  The distinction between tiers of firms and bands of individuals is performed by way of editorial discretion. More information on Eugene Reinboth and his specialist areas can be found below. Areas of Practice Business & Contract Law Commercial & Property Law Intellectual Property Franchising Building and Construction Wills & Estates Licensing, Gaming & Hospitality   About Eugene Eugene joined Belperio Clark in 2009. In addition to his Law degree, Eugene holds a Masters of Business Administration from the University of Adelaide and a Masters of Intellectual Property Law from the University of Melbourne. Eugene has an enormous amount of experience across several areas of practice. Before joining Belperio Clark, he ran his own firm, ‘Reinboths – Business and Intellectual Property Law’ and before that enjoyed working as the managing partner of a long-standing Adelaide law firm. As well...

29 May

Posted at 12:18h in Commercial Law

Written by Eugene Reinboth The High Court recently rejected an appeal by Valve, a US-based company involved in online sales of computer games in Australia. Valve were appealing a three million dollar penalty for non-compliance with the Australian Consumer Law ("ACL"). Despite Valve only having an online presence and no retail outlets in Australia, the critical issue was that sales were to Australian consumers. Valve incurred a $3 million penalty for non-compliance. Your rights as an Australian consumer as protected by the ACL. The ACCC provides this summary of the ACL, which since 2011 has ensured consumer guarantees on products and services. Products Products must be of acceptable quality, which factors in what would normally be expected for the type of product at its cost. For products to be of acceptable quality, they must: Be safe, lasting, and with no faults. Look acceptable Do all the things you would normally expect them to do. Products must also: Match descriptions made by the salesperson on packaging, labels, and in promotions or advertising. Match any demonstration model or sample you asked for. Be fit for the purpose the business told you it would be fit for, and for any purpose that you made known to the business...

01 Nov

Posted at 00:00h in Commercial Law

Written by Eugene Reinboth The Australia-wide law protecting consumers from unfair terms in standard form consumer contracts came into effect on 1 July 2010. That law was extended to business to business contracts entered into or renewed on or after 12 November 2016. So, if a business prepares and offers you a contract on a ‘take it or leave it’ basis (i.e. you have little or no opportunity to negotiate the terms), it is likely to be a standard form contract. The business-to-business unfair contract terms law applies to contracts for the supply of goods, services, or the sale or grant of an interest in land, where: at least one of the parties is a small business (that employs less than 20 employees, including casual employees) and the upfront price payable2 under the contract is no more than $300 000 (or $1 million if the contract is for more than 12 months). To be unfair, a term must: cause a significant imbalance in the parties’ rights and obligations, and not be reasonably necessary to protect the legitimate interests of the party advantaged by The term, and cause detriment (e.g. financial) to a small business if it were applied or relied upon. As a business, you may be...

01 Jun

Posted at 00:00h in Commercial Law

“It is quite common these days for various restraint clauses to be inserted in agreements such as for the sale of businesses and employment contracts. The intention is that the purchaser of the business does not wish to lose the clients of the business to the former owner and therefore lose some of the income from the business. Similarly, employers attempt to prevent departing employees from taking clients of the business or fellow employees with them. This is done by the use of what is commonly referred to as non-competition and non-solicitation clauses in the employment contract. These clauses generally deal with the scope of work or activity which the person is prevented from undertaking. They also set out the period and area in which the activity is prohibited. As a general rule, restrictive trade covenants are unenforceable because they impede freedom of trade and the individual liberty of action in trading. There are exceptions to the rule. Care needs to be taken with the drafting of such clauses. In a recent case, the employer sought to enforce the restraint of employment and non-solicitation covenants. At the end of a nine-day trial, the employer was fortunate the Court limited the application of...

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