Proposed Protection to “Small Businesses” from Unfair Contract Terms

The Federal Government’s Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015 was tabled in Parliament in 24 June 2015.  If passed in its current form the Bill will afford “small businesses” protection against unfair contract terms in “small business contracts” in a manner similar to the protections consumers currently have against unfair contract terms in consumer contracts under the Australian Consumer Law (see clause 23 of schedule 2 of the Competition and Consumer Act 2010 (Cth)).  Amongst other things, the Bill proposes to amend the ACL to extend the prohibition on unfair contract terms (which currently only apply in relation to consumer contracts) to small business contracts.

 

Small businesses are defined in the Bill as businesses with less than 20 employees. Small business contracts are defined in the Bill as contracts for the supply of goods or services or the sale or grant of an interest in land, where one party is a small business and the upfront price payable under the contract does not exceed $100,000.00 or the contract has a duration of more than 12 months and the upfront price does not exceed $250,000.00.

 

The Bill effectively provides that a term of a small business contract will be void if the term is “unfair” and the contract is a “standard form contract”.

 

Section 24 of the ACL defines unfair terms as those that would cause a significant imbalance in the parties’ rights and obligations arising under the contract, those which are not necessary to protect the interest of the party who would be advantaged by the term and those terms which would cause detriment to the other party if they were relied on.

 

Section 27 of the ACL provides some guidance for determining whether a contract is a standard form contract.  These include contracts where one of the parties has most of the bargaining power and where a party is required to either accept or reject the terms of the contract without an effective opportunity to negotiate the terms of the contract.

 

The Federal Minister for Small Business the Hon Bruce Billson MP in March this year noted on his web page that the Australian Small Business Commissioner had observed instances of unfair contract terms in telephone and internet contracts, office equipment leasing contracts and retail premises leases.

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Due Diligence – A Tenant’s Perspective

When assisting tenants in the negotiation of a new lease for commercial or retail premises we strongly urge tenants to arrange a physical inspection of the premises by a qualified inspector before entering into the Lease. 

The inspection should cover the building structure including power and plumbing systems, air conditioning and other installations.  The resolution of problems identified in the inspection report can then be negotiated with the landlord and form part of the written terms of the Lease. 

In some instances we have seen tenants not follow our advice, only to find that after the Lease is signed the tenant is deemed to have accepted the premises in their current condition, including problems (i.e. they are deemed to have accepted the premises “as is”).  This can be a costly issue for tenants as in most instances Leases require tenants to bear the costs of maintenance and repair of the premises including such problems. We can assist tenants with the negotiation of Letters of Offer, Head of Agreement, Agreements for Lease and Lease documents.

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Revised Franchising Code of Conduct

It has now been 6 months since the introduction of the new Franchising Code of Conduct. 

As franchisors should now be aware, the majority of the changes to the Code affect franchisors, such as:

*   the inclusion of new rules regarding the management and use of marketing funds;

*   limitations on restraining franchisees’ business activities at the end of the franchise;

*   limitations on imposing significant capital expenditure requirements on franchisees; and

*   a new penalty regime for infringements. 

The new Code also introduced a new form of Disclosure Document and an additional requirement to provide an Information Statement to prospective franchisees.  Both franchisors and franchisees are also subject to the newly introduced obligation to act in good faith in relation to matters arising in relation to the franchise arrangement.

We can advise and assist both franchisors and franchisees with their obligations under and compliance with the new Code.

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Buying real estate? Do your research first

 

Buying real estate? Do your research first

 

When considering the purchase of residential or commercial property, it’s critical you do your market research so you don’t pay too much.  We often suggest to prospective purchasers to subscribe to a property market research service, such as CoreLogic RP Data (www.corelogic.com.au) or Australian Property Monitors (www.apm.com.au) on a month to month basis, for a fee.

Knowing the market is important when bidding at an auction or making an offer to purchase in a private sale campaign.  A market research service can provide you with:


1.  comparative sales information;


2.  how long a property has been marketed (i.e. number of days on the market);


3.  details of the marketing campaign, including changes made to the campaign such as changes made to the price listed, etc.; and


4.  historical sales and rental prices.

Some mortgage brokers can provide you with a report for a particular property without you needing to pay a monthly subscription cost to access this information from a market research provider. Talk to our property team today if you would like to know more.

 

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Recent Wills Act Amendment Introducing International Wills

The recent amendment to the Wills Act now incorporated International Wills into Victorian law. 

 

Those who have assets in multiple countries may consider the amendment to be a welcome change.

 

Essentially, if a will is prepared in accordance with the formal requirements of the UNIDROIT Wills Convention, then it will be taken to have satisfied all formal requirements of a will in a jurisdiction that adopted the Convention. 

 

Jurisdictions adopted the Convention include Belgium, Canada (not all provinces), France and Italy.  United Kingdom and United States are also signatories to the Convention. However, the Parliaments of those two countries are yet to ratify the Convention.

 

Prior to the amendment, if the probate of a foreign will is sought in Victoria, an affidavit of a solicitor practicing in that foreign country setting out the relevant law relating to wills is in most instances required. 

 

A key difference between the formal requirements for international wills and those for Victorian wills is that, an international will is required to be witnessed by three witnesses, one of them being an “authorised witness”.  Lawyers and public notaries are authorised witnesses in Victoria.

 

Feel free to contact us if you wish to discuss any aspects of this article or if you are considering making an international will.

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