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Commercial Risk Management: Dodging Disputes
Every commercial activity carries with it some risk of dispute. Sometimes, that risk is so slight as to be negligible. But other times, the risks associated with a commercial action are significant. To understand the risks your business may face in respect of any...IP Rights: When Does Your Business Own What Employees Create?
All businesses create value. They may do it in different ways, but the creation of value is what underpins commerce. For some businesses, a service is the source of value on which they rely. Others create products. Generally, the value created by services or...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
Confidential information may be confidential for a range of reasons. It might be a trade secret—something that must remain secret for the sake of your business. Alternatively, it may be confidential for reasons of privacy; perhaps your business stores customer data,...Criminal Anti-Competition Laws in Australia
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
Introduction It has long been recognised in Australia that companies may be held liable for the crimes they commit. That is to say, if a company commits an offence, or breaks the law, it will be punished as if it were an individual. Often, though, complications arise...What is Champerty and Maintenance?
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?
Insider trading is a financial crime. Although it does not receive quite as much attention as other financial crimes, such as fraud, it remains relatively pervasive. However, the classification of insider trading is quite complex, and below, there is a more extended...Protecting Commercial Information: Confidentiality Agreements and the Duty of Confidence
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?
Introduction In any commercial agreement or transaction, financial security is key. All parties to an agreement want to ensure that their interests are protected. However, that’s not always an easy thing to ensure. After all, there are plenty of variables to take into...How to Protect your Personal Assets as a Business Owner
Introduction As a business owner, you put a lot into your work. Time, effort, and money are the main foundations of a successful business. Often, though, operating a business is an exchange and what you put in is what you get out. As a result, you can find your...What is a Company Constitution?
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
What is it? An assignment of debt is an agreement that transfers a debt, and all of the legal rights and obligations attached to it, from the creditor to a third party. The third party may be an individual or a company, such as a debt collection agency. Application...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...Commercial Risk Management: Dodging Disputes
Every commercial activity carries with it some risk of dispute. Sometimes, that risk is so slight as to be negligible. But other times, the risks associated with a commercial action are significant. To understand the risks your business may face in respect of any given activity, it’s important to know when disputes might arise, and what is at stake when they do.
IP Rights: When Does Your Business Own What Employees Create?
All businesses create value. They may do it in different ways, but the creation of value is what underpins commerce. For some businesses, a service is the source of value on which they rely. Others create products. Generally, the value created by services or physical products goes first to the business. From there, it is distributed among employees as wages. It’s well accepted that even though an employee creates a product, the employee does not own that product. But what if an employee creates value that is neither a product, nor a service? If an employee creates intellectual property (IP), the question of ownership can become more complicated. So, let’s take a look at intellectual property rights, and how they interact with the employee/employer relationship.
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.
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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."
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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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