Recent News
Product Liability: What Manufacturers, Importers, and Vendors Need to Know
Product liability is an area of law with some unusual features. In fact, there’s relatively little awareness of product liability and its reach among many manufacturers, importers, and vendors. There’s good reason for that, too: it’s quite complex! So let’s start...Dealing With Disputes: Some Helpful Hints
Disputes are commonplace in the business world. Whether between suppliers, clients, customers, or competitors, most disputes are capable of early and informal resolution. But not all disputes will come to an end that way. In the life of every business, there are...Misleading Conduct and Marketing: The Rules of Proper Promotion
Marketing: it’s effectively the basis of all successful businesses. Whether you’re selling goods or services, your success depends on your customer or client base. And building that client base is impossible without some form of publicity. Often, the best marketing...Service Agreements: A Service Provider’s Perspective
Service agreements are an important part of business. Often, they are considered from a purchaser’s perspective. But service agreements are just as important for service providers. A well-drafted service agreement will ensure that both parties in a service...Directors’ Duties: How do They Affect your Business?
As a small to medium business owner, you’ve no doubt got a lot of regulations to contend with. Almost all commercial conduct is regulated in one way or another. However, some regulations are a little more complex. Take directors’ duties, for example. Directors’...Social Media Marketing and the Law: The Small Business Guide
Starting a new business requires careful planning. It also requires publicity. Publicity is what connects you to your consumers, regardless of your chosen field. Whether you offer good or services, you need consumers. Fortunately, in the digital age, reaching them...Partnership and Shareholders’ Agreements: What You Need to Know
Businesses often start as an idea. Sometimes, they start as a personal idea that you have cultivated and pursued over the course of your career. More often, though, they start as an idea between friends, colleagues, or professional acquaintances. After all,...Starting a New Business: Companies, Trusts, Partnerships, Sole Traders, and Joint Ventures
Starting a new business is exciting. It’s an opportunity to weave your commercial ideas into something tangible, and productive. But it’s not without its challenges. The formation period allows you to lay the foundations of your future success. However, there’s a...When a Director Departs: What Executives Need to Consider
In a previous article, we spoke about restraint clauses. But we didn’t cover restraint clauses in relation to company directors, who want to start their own companies. Like most employees, company directors have access to the inner mechanisms of a business. Unlike...Restraint of Trade Clauses and your Rights
Almost everyone has signed an employment agreement or contract before. Usually, it’s an experience filled with budding opportunity. After all, employment is the gateway to a long and fulfilling career. However, for some people that agreement can gradually become a...Fraud in Business: Recognising the Signs
In terms of business-related crimes, fraud is among the more common. However, recognising fraud is more challenging than most realise. All fraud offences are predicated on an element of dishonesty. But that is generally the extent of their similarities. Fraud offences...Confidentiality Agreements: Protecting Your Information
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Business and competition go hand in hand. For a business to grow, that business must compete with others in its field. However, there is a limit on what conduct is permissible in terms of remaining competitive as a business. Conduct that exceeds that limit risks...Bribery of Government Officials: An Offence in the Commonwealth Criminal Code
Bribery is a widely accepted and well-known crime. It is not unique to Australia, and most consider it a pretty easy crime to identify. However, as with all crimes, there are grey areas. Occasionally, during the course of business, company owners or representative...Tax Crimes in Australia
Introduction Tax crimes are many and varied. There is a diverse and wide-ranging spectrum of tax crimes in Australia, all of which attract different penalties. And, while most business owners are aware of their obligation to pay tax, navigating the system itself can...Corporate Criminal Liability: Criminality and the Divide Between Individuals and Companies
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Introduction Champerty and maintenance is an unusual term; it doesn’t receive much attention, for the most part. Of course, its name is derived from archaic terms. Those terms were used to describe the maintenance of legal proceedings by a disinterested third party,...The Tort of Intimidation: When is it a Crime and When is it a Tort?
Introduction The idea of intimidation in a business context is concerning to any business owner. It’s not common, but when it occurs there is more than money at stake. Intimidating conduct can have a serious personal toll. That is why the law is positioned to...When Does Defamation Affect your Business and What Can you do About it?
Introduction Of the economic torts, defamation is emerging as one that we see more frequently than others. It is also one of the more widely known and referenced. However, often, references to defamation don’t do justice to its complex nature. Recognising defamation...Deliberate and Direct Interference: The Tumultuous Tort of Inducing Breach of Contract
Introduction A contractual relationship is not often considered within the scope of torts law. In fact, it is a distinct area of the law, governed by a series of well-established principles. It is well-known, as well, that contractual relationships give rise to...Economic Torts: Limits on the Conduct of Business
Introduction The world of business is inherently competitive. Often, business owners can feel as though they’re on the defensive, with other commercial entities constantly growing around them. Of course, for many, that is simply the nature of business. But there are...What is Insider Trading?
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Introduction Confidential information may not be something that most people associate with ordinary business. However, most businesses deal with information that demands a certain degree of confidentiality. That information may not necessarily relate to daily...What is a Guarantor?
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Introduction Most people are familiar with the term constitution. However, that’s normally in the context of countries and governments. Far fewer people are familiar with the laws surrounding company constitutions. That’s understandable, too; company constitutions are...Manufacturing Agreements – What You Need To Consider
What is it? A manufacturing agreement is a contract between the developer or owner of a product and the person or company who makes the product. Application for small business people Small business people will often come up with the idea for a product that they want...Assignment of Debt
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What is it? A service agreement typically refers to the contract between an employer and a person or company hired by the employer to perform a specific task. Application for small business people Service agreements are essential for small businesses that need...Testimonials
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Joe Kafrouni has been our company’s lawyer from the beginning and has been instrumental in our journey as company owners and directors. When dealing with both complex and sensitive company issues, Joe is able to provide us with clearly articulated strategies that are well thought‐out and with the bigger picture in mind. He genuinely cares and is always willing to share his personal views, which are both honest and just. Joe is highly professional and knowledgeable in his field. You will definitely benefit having him on your team.
News & Publications
Social Media Marketing and the Law: The Small Business Guide
Starting a new business requires careful planning. It also requires publicity. Publicity is what connects you to your consumers, regardless of your chosen field. Whether you offer good or services, you need consumers. Fortunately, in the digital age, reaching them...Australian Company Law – Small Business Guide
The laws applying to Australian companies are substantial and complex. The key to Australian company law is the Corporations Act 2001 (Cth), as amended from time to time. It is a delight that a recent amendment created a “plain English” guide to company...A Practical Legal Guide to Starting a Business
This Guide is designed for use by business people and professional advisers when starting a business. The purpose of the Guide is to explain some of the key issues, specific risks and the potential for getting things wrong and some opportunities where professional...A Practical Legal Guide to Buying A Business
This Guide is designed for use by buyers of businesses, business brokers and professional advisers when buying a business. The purpose of the Guide is to explain some of the key issues, specific risks and the potential for getting things wrong and some opportunities...Product Liability: What Manufacturers, Importers, and Vendors Need to Know
Product liability is an area of law with some unusual features. In fact, there’s relatively little awareness of product liability and its reach among many manufacturers, importers, and vendors. There’s good reason for that, too: it’s quite complex! So let’s start with its definition. Product liability essentially refers to the duty existing between the producer or seller of a product, and the purchaser or user of that product. When you buy an item, you are entitled to use it under the expectation that it will fulfil its purpose effectively and safely. If you buy something that fails to meet that basic standard of functionality and safety, you might face a risk of harm. read more…
Dealing With Disputes: Some Helpful Hints
Disputes are commonplace in the business world. Whether between suppliers, clients, customers, or competitors, most disputes are capable of early and informal resolution. But not all disputes will come to an end that way. In the life of every business, there are sure to be times where disputes rise to the next level. So what do you do if a serious dispute is threatening your business? There are a few options available to you, but the first is the easiest: remain calm. Business disputes can be frustrating, and they can drive us to take steps or make comments that we wouldn’t usually make. The first thing you need to remember is that those early stages may one day be put before a court. So, before you respond to a party with which you’re in dispute, ask yourself this: how would this sound in court?
The second step you need to take is to get in touch with an experienced commercial lawyer. Managing disputes is a speciality of any good business lawyer, and your lawyer’s insights will give you an early advantage. Essentially, a lawyer will be able to assess your position and the risks currently surrounding you. With that knowledge, you can make a more reasonable decision on how to progress. Most importantly, though, a good lawyer will help you ensure that you do not make your position worse. From the moment you engage a business lawyer to help you, your dispute will move closer to resolution.
Dispute resolution generally takes two forms – here’s what they entail
As far as the law is concerned, there are two forms of dispute resolution. The first is known as alternative dispute resolution, or ADR for short. The second is known as litigation, which involves judicial intervention. As a general rule, ADR is far preferable to litigation. There are plenty of reasons for that, and we will examine them in some more detail shortly. But the primary takeaway, when it comes to ADR, is this: it’s generally cheaper and faster!
Pre-litigation settlements: the preferred form of dispute resolution
Alternative dispute resolution is a blanket term that encompasses things like mediation, conciliation, arbitration, and other informal methods of dispute resolution. In a business dispute, you’re likely to encounter mediation more than anything. Mediation involves the disputing parties coming together to consolidate their positions. In an overwhelming majority of cases, business disputes are partly attributable to breakdowns in communication. In a mediation, you will be given a chance to put forward your position in a calm and reasonable environment. So will your counterpart, and you may find that you share some common ground. In a mediation, parties are able to admit their mistakes, if any, and sometimes agree on terms by which the dispute may be settled to everyone’s satisfaction. Mediations involve the disputing parties, their lawyers, and an impartial mediator who will see that the mediation runs smoothly. Good commercial mediators generally possess a lot of experience in the field of business, and have a background in commercial law.
Of course, there are plenty of times where ADR doesn’t quite work. Sometimes, a mediation can be a fulfilling and worthwhile experience, but still leave some gap between what either party is prepared to accept by way of settlement. In other scenarios, one party may simply refuse to engage, or become combative. In either case, the next step is usually litigation. Keep in mind, though, that there is no limit to the number of mediations that can occur in the context of a dispute.
Litigated settlements or trial: here’s what this involves
Litigation is the term used to describe a dispute that has become the subject of court proceedings. Litigation is commenced when one party to the dispute – the plaintiff – lodges a statement of claim in court. Once that has been served, the other party – the defendant – needs to file a defence within 28 days. If you are served with a statement of claim, it is vital that you seek immediate legal advice.
However, when a claim is litigated informal dispute resolution is still possible. You can continue to negotiate with the other party in an effort to resolve the claim. You can also continue to mediate. If you initiate mediations during a dispute, a judge is likely to look favourably on your conduct if the matter proceeds to trial. The courts prefer matters to be settled without trial, because of the time and money involved in running them.
Understanding litigation as a form of dispute resolution
To understand the value of pre-litigation settlement, you need to understand what litigation involves. Before you seek to litigate, consider the value of the claim, and the commercial implications of succeeding or failing. Is the claim going to yield greater value than the money you spend on legal fees? Will a loss in court damage your commercial reputation and relationships? Those are all factors to consider. Then there’s publicity; court decisions are generally made public, along with all the evidence and documents involved.
There’s also a serious practical element to litigation. A common mistake made by litigators is to pursue legal action against a party that is not able to pay the damages being sought. Such situations can result in a victory at trial; but that victory may not count for much if the losing party can’t pay what they’ve been order to pay. Finally, and perhaps most importantly, there’s the unpredictability of litigation. Sure, you can mount a strong case if you are pursuing a legitimate legal cause. But to prove your case in court can still be challenging. The rules of evidence mean that only certain types of evidence can actually be admitted before the court. And even when admitted, there’s the possibility that your evidence won’t convince the judge. Ultimately, you can’t control the outcome of litigation. And although it’s necessary at times, it’s best avoided for that reason.
If a dispute is looming for your business, here are some preliminary steps
If a dispute looks imminent between your business and another party, there are some early steps you can take. First, consider how your conduct will look if described in court. Is there any chance that it could have an adverse effect on your prospects of success? During a dispute, it is important to act reasonably and courteously. You should always assume that your dispute will end up in court, but work hard to prevent that from occurring. Secondly, get in touch with a lawyer. Even if you only get some initial advice, you’ll still be better off for it.
Commercial lawyers are skilled in dispute management and resolution. They will guide you through the ADR process, and ensure that everything is done to avoid going to court. And remember, if your dispute goes to court, all your conduct will be scrutinised by a judge.
If you receive correspondence from a lawyer, you should seek your own legal advice
There are some general hints that a problematic dispute may be coming your way. If you’re alert to them, you can take steps early. A common precursor to a commercial dispute is correspondence from lawyers. If you’ve had a disagreement with another party, you may start receiving emails or letters from their lawyers. If that occurs, you should always seek your own legal advice before responding. Even if the correspondence seems relatively innocuous, it’s always best to get independent advice. Again, that’s where an experienced business lawyer will offer you an edge.
Developing rapport with your lawyer will give them an insight into your business, and operating style. With that insight, your lawyer will be better placed to tailor solutions to your needs, and those of your business. So get in touch with an experienced commercial lawyer today if you are facing disputes relating to your business. The more you try and resolve it now, the better your prospects in the long run.
Disclaimer
The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.
Liability limited by a scheme approved under professional standards legislation.
Misleading Conduct and Marketing: The Rules of Proper Promotion
Marketing: it’s effectively the basis of all successful businesses. Whether you’re selling goods or services, your success depends on your customer or client base. And building that client base is impossible without some form of publicity. Often, the best marketing and advertising campaigns are creative. They give products some distinction – an edge that stands out from competitors. A lot of the time, successful marketing campaigns encourage some imagination. But when does that creative licence cross the line into misleading conduct?
When it comes to marketing and promotion, the law has drawn a line. On one side, there is creativity. The law has no issue with promotion that encourages consumers to use their imagination a little. On the other side, though, there is deception. Promotional activities that have any element of misleading or deceptive conduct are unlawful. But, as with so many legal lines, there can be a little ambiguity. And for small business owners, such ambiguity can present certain challenges. If you’re planning a promotional campaign with a little flair, how can you tell if your creativity has gone too far? The best way is to get a professional opinion. But before you do, there are some signs that can guide you. So let’s have a closer look at the law surrounding misleading and deceptive conduct.
Misleading or Deceptive Conduct: Where Does the Law Draw the Line?
Australian Consumer Law is the source of laws regulating misleading and deceptive conduct. It’s designed to protect consumers against dishonesty. It aims to do so by ensuring that consumers are presented with accurate and reliable information regarding goods and services. The law prohibits a person, in trade or commerce, from engaging in conduct that is misleading or deceptive.
If we break that down, we can get a feel for what the law is attempting to achieve. Firstly, it is limited to trade or commerce. That means those fishermen’s tales your uncle tells are safe for now! Secondly, it applies to ‘a person.’ But in this context, that includes corporations and individuals. And thirdly, it prohibits conduct that is misleading or deceptive. It doesn’t stop there, though. Australian Consumer Law also prohibits conduct that is likely to mislead or deceive. So that narrows the scope of permissible conduct a little. To understand more, let’s consider the definitions.
Misleading Conduct – Here’s How to Pick it
Australian Consumer Law has maintained a deliberately broad view of what is misleading or deceptive, under sections 18 and 29. That means most cases of misleading or deceptive conduct are determined by the court, which considers all the surrounding circumstances of a transaction. The definition of misleading is to be an objective one, too. That means it is a question of fact. So, what is to be considered in assessing whether conduct is misleading? Generally, a court will consider whether the relevant conduct induced, or was capable of inducing error. Did the purchaser think he or she was getting a different product at the time of transaction? If so, was that a result of the vendor’s conduct? In each case, the law will look a little deeper than those questions alone permit. However, they’re useful questions to ask when you’re developing your own marketing campaign.
False Representations – When do they Become Misleading?
We see false representations all the time; they’re on TV, in newspaper ads, and on billboards. Some might show cars driving themselves, following their owners. Others might show talking animals or other similarly impossible things. They’re all designed to entice us to products. However, they’re not misleading under the law. Why is that? Well, it’s pretty simple: they’re not designed to induce us into buying a car that we think will follow us around. They’re simply examples of creative marketing campaigns, which are designed to get us thinking a certain way or making positive associations between feelings and products. A promotion will become misleading when it is designed, or even has the effect of inducing a reasonable person into buying something that is presented as having qualities that it doesn’t have.
Misleading the Public vs Misleading the Person: A Legal Distinction
Australian Consumer Law has an unsurprising focus on the consumer. A lot of consumer law principles are directed at the protection of individuals, against misleading commercial conduct. However, consumer law expresses further provisions to protect the public more broadly. Those can be found in sections 33 and 34. Under sections 33 and 34 of Australian Consumer Law, conduct likely to mislead the public is prohibited. So how does that differ from sections 18 and 29, for example? Well, they all share a lot of similarities. Ultimately, they share similar intentions as well. However, sections 33 and 34 don’t have the same transactional focus. Their perspective is more of a broad one.
The earlier sections have a primary focus on consumers, specifically, people who are misled into making a purchase. The later sections, on the other hand, are designed to prevent companies from fostering an inaccurate image seeded in public deceit. In doing so, the provisions intend to foster a better commercial environment for consumers more broadly. That is illustrated, for example, by the section 33 prohibition of conduct that misleads the public in relation to the manufacturing process of goods. In that example, the law prevents companies from claiming social credibility for their ‘environmentally friendly,’ or ‘fair trade’ manufacturing, without proper basis. In doing so, it gives consumers a greater peace of mind in relation to the provenance of their goods.
Keep the Energy but not the Embellishment: Some Tips for Proper Promotion
Advertising, marketing, and promotion all require a creative edge to help you get ahead. After all, their purpose is to make you stand out. But honesty is of even greater importance. In every promotion your business undertakes, there’s a balance to be struck. Get some help walking the tightrope of proper promotion. Contact Kafrouni Lawyers. We understand consumer law, but more importantly, we understand business. Better still, we know how the two can co-exist for everyone’s benefit.
Disclaimer
The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Company directors should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.
Liability limited by a scheme approved under professional standards legislation.
Service Agreements: A Service Provider’s Perspective
Service agreements are an important part of business. Often, they are considered from a purchaser’s perspective. But service agreements are just as important for service providers. A well-drafted service agreement will ensure that both parties in a service relationship receive fair treatment. So, what is the trick to drafting a strong and reliable service agreement? Generally speaking, there are many tricks. Service agreements needn’t be overly complicated, but they can still be complex. In this guide, we’ll take a look at some of the features that distinguish the more effective service agreements, from their counterparts. Hopefully, that will help answer the question: do you need a service agreement between you and your consumers?
Before we go any further, though, let’s break down the purpose of service agreements. As a service provider, your business model is based on an exchange. Your company provides services to clients and customers, in exchange for payment. A service agreement is designed to ensure that the exchange between you and your consumers remains fair. In that sense, service agreements can be collaborative; when you draft one, it’s important to think of your clients’ needs as well. After all, satisfied clients are the key to a successful business. But that doesn’t mean your needs have to take a back seat. It is important that your service agreement is firm in setting boundaries where necessary. Service relationships often change, so agreements need to be dynamic. But they also need to ensure that your business has some assurance of stability, going forward.
What are some common provisions found in most service agreements?
A service agreement needs to have certain provisions. The precise nature of those provisions will vary, depending on the services your company offers. For that reason, it’s difficult to offer a one-size-fits-all agreement template. However, if you were to look at a broad spectrum of service agreements, you may notice that some provisions appear quite frequently, albeit with various alterations. Essentially, the more common service agreement provisions form a backbone of sorts. With them, you can find a broad structure for your service agreement. So, let’s take a look at some of the most common service agreement provisions.
Your service agreement needs a description of services – here’s why
A description of services often appears early in a service agreement. It may seem a little pedantic, too; surely both parties are clear on the services being offered? Often, yes – but there’s more to it than that. Describing the services you offer places parameters around the service relationship. Like any relationship, service relationships are robust. They can change, and often do. By agreeing on the services you will offer, you can create clearer expectations in your service relationship. Sometimes, that can be useful in situations where your client requires additional services at short notice. It might also be useful if expectations arise in terms of value-add services, or other commercial incentives. With clearly defined, and agreed parameters, your service relationship stands a better chance of staying fair.
Standard of performance: your service agreement should set the standard
Fairness goes both ways, of course. Your client is entitled to a satisfactory standard of service. Further still, your client is likely to want some assurance that they will receive a certain standard of service. That’s why a lot of service agreements include a standard of performance clause. As its name suggests, this clause establishes the standard by which your services must be carried out. A common standard imposed under service agreements is that of ‘reasonable care and skill.’ That standard is adopted from the field of negligence law, in which a duty of care is imposed on the same terms. However, standard of service provisions can also be implied. That means your service agreement may bind you to a standard of service, even without an explicit provision to that end.
However, some service agreements go further. Sometimes, customers seeking premium services may want a higher standard. In such cases, a service agreement can respond by imposing stricter terms. A clause similar to the following may be helpful: ‘a standard of skill, care and diligence to be expected from a qualified, competent and experienced provider of services of a similar scope and complexity.’ That’s just an example, but provisions like that can be useful – especially for specialised services. Before adopting one, though, it’s best to seek some professional advice.
Costing and charging: make sure your service agreement covers you!
Another important provision in a service agreement is one concerning costing and charging. These provisions are another example of the double-sided protection service agreements offer. On the one hand, a costing and charging provision will help you manage the terms of your payment. They can help you get paid the right amount, in a timely manner. On the other hand, such provisions help your clients. They offer them some degree of certainty as to the price of your services, and the terms of payment. If well-constructed, these provisions can lay the foundation for a fulfilling and straightforward service relationship between you and your clients.
Service agreements need to cover a lot of topics – here’s how to pick yours
Service agreements need to traverse a wide range of topics, from commencing a service relationship, to terminating one. And everything in between! As a result, you may be faced with the question of which provisions to include. For a lot of business, that can be a challenging question to answer. It can also be complicated for those who are starting a business, and have yet to gain a great deal of experience.
In those cases, the best place to start is at the start. We suggest carefully thinking through your business model. What services do you offer; how much do they cost? What will your clients be expecting? Simple questions like that can help you build a general framework around your services. Ultimately, service agreements are important when it comes to managing expectations, setting standards, and maintain fair and amiable service relationships. For that reason, it’s worth taking the time to draft a strong one.
Get professional help to obtain a fair and enforceable service agreement
Service agreements are complex; they’re a legal document. For that reason, we recommend getting some legal help to put yours together. At Kafrouni Lawyers, we have longstanding and wide-ranging experience with service agreements. We have drafted them for many different businesses, in relation to many different services. We can help you draft a service agreement that will contribute to a fair relationship between you and your consumers.
Disclaimer
The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Company directors should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.
Liability limited by a scheme approved under professional standards legislation.
Leadership
Our firm is led by Joe Kafrouni, with over twenty years' experience in law. Joe is a Queensland Law Society Accredited Specialist in business law. “I am driven to help my clients succeed."
Expertise
We are business law specialists focused on the smaller end of town - SME, private and family companies only. We help business people start, buy, grow and exit businesses and solve business disputes.
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We are based at:
Newstead: Level 2, Lobby 1, Gasworks Plaza, 76 Skyring Terrace, Newstead, Qld, 4006.
Parking: 2 hours free parking available at Newstead offices.
Our office is only one option – we are not attached to them. Here is how we regularly meet our clients. Tell us what suits you.
Contact us at:
- Phone: +61 7 3103 3199
- Email: info@klaw.com.au
