A new national business names registration system commences on 28 May 2012.
The national register of business names will replace the existing state and territory registers.
The new system will be administered by Australian Securities and Investments Commission (ASIC)
Benefits of the new national register
The national register will offer some advantages to Queensland business owners:
Transistion to the new national register
The Queensland register will be discontinued from 5pm on Friday 25 May.
As a business name holder in Queensland, you do not have to do anything during the transition. All existing Queensland business names will automatically transition to the national register in preparation for its commencement on Monday 28 May.
Duplicate names
If you have registered the same business name in multiple jurisdictions, all of your business names will transitioned to the national business names register, meaning that you may have multiple identical business names registered to you.
Under the new system, you can choose to keep one of your business names and let the rest expire. If you prefer, you can speed up this process by cancelling any business name that you no longer require. There is no fee to cancel a business name.
If the same business name has been registered by different businesses in different jurisdictions, all of the business names will still be transitioned to the national business names register. An additional identifier (such as the word ‘Queensland’) will appear on the register to assist in differentiating between identical business names.
This additional identifier will not form part of your business name, meaning that you can continue to trade using the business name you have always had.
Renewing your business name
If your business name is due for renewal before 28 May 2012, you may have already received your business name renewal form from the Office of Fair Trading. You should renew your business name in Queensland, prior to the transition to the national register. If you haven’t already done so, please ensure that you lodge your form and appropriate fee as soon as possible.
If your business name is due for renewal on or after 28 May 2012, ASIC will send you a business name renewal form and you will renew on the national register.
If your business name is due for renewal between 28 May 2012 and mid to late June 2012, you may receive your renewal notice from ASIC a bit later than you would normally expect it. If you do, you will get an extension of time in which to renew, so that you are not disadvantaged.
Fees
Once the transition to the national register is complete, fees for Queensland businesses will be cheaper. Online payment options such as BPay and credit card payment will be available. Registering an ABN will remain free.
New application for registration of a business name for 1 year – $30
Application for renewal of a business name for 1 year – $30
New application for registration of a business name for 3 years – $70
Application for renewal of a business name for 3 years – $70
Note: Fees are current as at 23 November 2011. They are subject to change at the start of each new financial year.
If your business name is due to expire before 28 May 2012, you will need to renew in Queensland and pay the current Queensland fee.
You are entitled to renew for only one year in Queensland to reduce your costs.
We think that charity should start at home. There are so many local people who are struggling and in need of help.
Two year old locals Lucy Ridoutt and Frankee-Lee Shaw both suffer from extremely rare ear conditions leaving Lucy’s hearing at 20-30% and Frankee-Lee bilaterally deaf in both ears.
Over 50 well known Sunshine Coast business identities including Joseph Riba from Riba Business Lawyers have come together to create the Shadforths Century Charity Ride, a 110km ride from Tanawah to Noosa Heads on June 16 to raise funds for two local girls who require urgent ear operations at the California Ear Institute. All of the money raised will help fund flights, accommodation, transport and medical expenses.
Each operation will cost around $34,000. Please help us raise funds.
If you wish to help these little girls pay for operations by one of the worlds leading surgeons in this area, please follow the link below to the charity website.
Almost every commercial lease will provide that before a lease can be assigned, the consent of the landlord must be obtained. If you have commercial premises associated with your business there are some very good reasons to make sure that the assignment of the lease is properly handled.
We recently acted for a commercial tenant. This client came to us with a big problem, which had only become obvious to them a year after the date of the sale of their business.
The commercial tenant had sold their business a year earlier and had assigned the lease of the business premises to the buyer. Things did not go smoothly.
The landlord set out the conditions upon which consent would be given.
Most of the conditions were satisfied but, not all of them. The landlord had required (as is normal) a deed of consent to assignment.
The seller and the buyer had apparently both signed the deed of consent to assignment and the Deed had been left with the buyer to send back to the Landlord.
The transfer of the lease was also left with the buyer so that the assignment of the lease could be registered at the titles office. The assignment was not registered. But the buyer took possession of the premises.
The buyer did not return the Deed of Assignment to the landlord and did not stamp or register the transfer of lease.
The buyer is now in liquidation. The landlord claims that consent was never given to the assignment.
The tenant is being sued by the landlord for a very large sum of money.
The moral of the story is that all of the risk is with the seller. Therefore, it is the seller that must make sure that they have a copy of consent in writing signed by all parties before, the sale proceeds. The only substitute is a solicitors undertaking.
If the consent is not given the seller has
It is quite common for Franchise Agreements to contain clauses which have a significant effect on the way in which the sale contract should be drafted. If a contract for the sale of a Franchised business is signed without first reading the Franchise Agreement and checking any requirements, then it may be difficult to unravel the resulting mess.
There is a lengthy list of things that need to be checked. If steps are not taken to ensure compliance, then it is likely that any sale contract will be in conflict with the Franchise Agreement. This problem can be difficult to resolve because the sale contract may oblige the seller to do one thing and the Franchise Agreement may prohibit the doing of that same thing.
A simple example is a first right of refusal. If the sale contract is signed then the Franchisee may be obliged to sell to the buyer while at the same time being obliged to sell to the Franchisor.
In order to marry the Franchise Agreement and the Sale Contract it is also necessary to be sensitive to the requirements of the Franchising Code of Conduct.
It is not true however that a Franchisor should submit entirely to the wishes of the Franchisor. Some of the clauses that the Franchisor will attempt to insert in the sale contract may not favour the parties to that contract and if so should be considered carefully and if necessary avoided. The business is owned by the seller and the contract for the sale of the business must ultimately be controlled by the seller. A Franchisor cannot unreasonably withhold consent to the sale.
If all parties are reasonable and after the necessary checks are completed, the process for the sale can then be agreed with the Franchisor.
Going to court is expensive. It is so expensive that many commercially minded people would rather pay someone money that is not owed, or walk away from money that is owing, just to avoid legal costs.
While some business people take this practical approach, others want to stand up for the principle of the matter. Having principles can however be very expensive.
It is true that because legal costs are high, even a win may feel like a loss. Legal costs are sometime higher than the value of the dispute.
Lawyers have a saying that “costs follow the event”. In other words, normally the winner of legal proceedings will receive an order that their costs should be paid, by the losing party. We mention some exceptions below.
Here we should pause to think about what this means:
1. Just because a court orders that the losing party has to pay legal costs, does not mean that the losing party will actually pay. A debtor will rarely be punished for failing to pay legal costs.
2. If you win the action, but the plaintiff or defendant has no money, then a court order in your favour will not benefit you. This is something that must be considered and investigated early on, not after the proceedings are over.
3. Some people hide their assets and money in companies and trust or they just plain lie about what they own. This is so that they don’t have to make a payment. It can be costly to prove that someone owns something if they will not admit ownership. Look for Real Estate as it is not liquid, ownership must be registered and a writ can be registered on the title.
4. If the losing party does own something you might have to force a sale. This can be expensive, time consuming and risky.
5. What are costs anyway? Your actual legal costs may greatly exceed the amount of costs that a court is prepared to award to you.
5. How is the value of costs calculated? Just as you can have an argument about whatever it was that forced you into court in the first place, there may also be an argument about, how costs should be calculated. This argument about the calculation of costs can be a further source of legal costs, and frustration.
So what does all this mean?
1. It means that you should be sure to know what the other party owns before you get involved in legal proceedings.
2. If you are the defendant, you don’t get to choose if you will be involved in legal proceedings. In this case, you can however ask for a thing called “security for costs”. If you are given security for costs then the plaintiff may not be able to litigate unless they first prove that they will be able to pay your legal costs if they lose.
3. If you are a Plaintiff or Defendant you should make offers to settle early on before costs accumulate. To be effective, offers must generally be made pursuant to Part 5 of the Uniform Civil Procedure Rules.
For the reasons set out below both Plaintiffs and Defendants should use Part 5 offers as early as possible in proceedings.
If, for example, a Plaintiff makes an offer to settle and a defendant rejects that offer, then the court must order the defendant to pay the plaintiff’s costs calculated on the indemnity basis if:
1. the Plaintiff wins the proceedings and;
2. gets an order for at least as much what was offered.
An order of indemnity costs will be a significant penalty to the defendant and may be within 15% of the value of the actual costs incurred.
A defendant can also use Part 5. If a defendant makes an offer to a plaintiff which is not accepted and the plaintiff wins the action but does not get an order for a sum which is greater than the sum offered by the defendant, then the defendant will receive an order that the plaintiff pays the defendants cost, even though the plaintiff was successful.
The proper use of offers can help achieve early settlements and save all parties significant legal fees.
There is no such thing as a standard Franchise Agreement. However there are certain things that all Franchisors will try to control using their agreement. This need for the Franchisor to maintain control gives all Franchise Agreements a common flavour.
There is sometimes a misconception that the Franchise Agreement is designed to protect both Franchisor and Franchisee. There is however little contained in a Franchise Agreement which is designed to protect a Franchisee and this is often a source of disappointment to the Franchisee once the documents are reviewed. Franchisees do however enjoy significant protection given at common law, from legislation such as the Franchising Code.
The purpose of the Franchise Agreement is to set up a relationship and ensure that the Franchisee conforms to the Franchisor’s requirements. If the Franchise system is poorly run it is unlikely that the Franchisee will find any solution in the Franchise Agreement.
The purpose of this article is to list some of the more common clauses that a Franchisee will encountered when reviewing a Franchise Agreement. It is essential to understand the Franchise Agreement before buying in.
Term - The Franchisee should aim to get the longest term possible. The term needs to be at least long enough to recover the capital expended and then make a profit in each year of operation. There is no standard term, and in many systems, less than 10 years is in our opinion not sufficient. Read more
Greater certainty is wanted in relation to retail shop leasing. Changes are sought by Lawyers in relation to certain aspects of the Retail Shop Leases Act 1984 so that both tenants and landlords can operate with greater certainty. The following matters are being suggested as areas in need of improvement :
1. When an office tower forms part of a retail shopping centre there is doubt about when this has the effect of deeming all tenancies to be a retail shop leases. Retail shop lease tenants enjoy legislative benefits and protection that other commercial tenants do not.
2. Unlike residential conveyancing there is no mechanism by which disclosure periods can be shortened. This means that settlements of business sales must sometimes be delayed in order to allow disclosure periods to expire.
3. It is very difficult to comply with the disclosure of outgoings when there is an agreement for lease and no set commencement date.
4. Certain minimum lease standards are unclear including
a. the release of outgoing tenants and guarantors upon an assignment of the lease
b. relocation and demolition requirements
We will keep you informed of developments.
When it is time to sell your business, how sure are you that you will receive good value for what you have created?
From my experience in business sales, the importance of planning for the future of your business can not be underestimated. A business plan will ensure that you stay firmly on track and focussed, but of equal importance is the Exit plan. How are you going to optimise the value for the business you have created?
You are probably familiar with the saying “you get what you pay for” – in selling a business it is “you receive the value for what you create”.
To plan for your exit continue to run the business as you normally would but, always ask yourself how a new owner might view the business you have built, and respond to the decisions you make.
Each business has its unique selling points and no two businesses will necessarily have the same market value. As a guide there are seven things a buyer will pay a premium for: Read more
For all businesses, it is inevitable that the time will come when there will be a ‘changing of the guard’. But what happens when this is unexpectedly forced upon us?
In the event that a director or key person was to suffer an unexpected departure from the business due to death or disability, there are several important factors that every business needs to consider.
For the purpose of this article we will assume ABC Pty Ltd has 3 directors, Allan, Bart,and Cindy, and director Allan has recently passed away unexpectedly.
Upon Allan’s death, his equity within ABC Pty Ltd, has passed directly to his estate, and Bart & Cindy are now in Read more
Firstly would a franchise system based on your business model be likely to succeed? Secondly, even if it could succeed is it the most attractive option for you and your business? If you have a great business model which would assist others to succeed in business then there are obviously plenty of options open to you, if you have the resources. In considering whether to franchise what factors should be considered?
Dealing firstly with whether it is possible to franchise your business.
If your business:
then you are probably not ready to franchise. Read more
What kinds of fees should a franchisee expect to pay? We have listed below some of the most common fees. It is not always true that you get what you pay for! In the case of franchising the best question may be to ask what you are getting (in the franchise agreement) rather than focus too heavily on what you are paying. But don’t be fooled! The answer to this pertinent question can only be found in the franchise agreement. A franchisor who offers the world but, cannot back this up with written promises, in the franchise agreement is worth very little and should be paid accordingly.
1. What fees are payable? Consider royalties, promotion and advertising funds, initial fees, renewal and sale fees, legal fees, start -up costs – required equipment etc
2. How are fees calculated – are fees fixed or percentage?
3. When are fees Payable? Are you required to make payments before you sign and if so how is any refund given in the event that you do not proceed?
4. How are fees paid? Eg direct debit
5. What are fees paid for? Is the franchisor required to provide any identifiable level and quality of service in return for the payment?
6. How are fees reviewed and are there likely to be substantial increases?
7. What other start up costs will you incur? Uniforms, equipment, fit out, occupancy costs.
8. Are you required to expend money on advertising in addition to any advertising levy.
Many franchisors impose a sale fee which in some cases can be tens of thousands of dollars. It is important to know at the point of entering the franchise what it will cost to escape the arrangement when, in the future, that becomes necessary.
If you are required to contribute to a marketing or other cooperative fund, the franchisor must prepare a financial statement of the fund=s receipts and expenses and the amount spent on administration, production, advertising. Unless 75% of the franchisees agree otherwise, this statement must be audited within three months of the end of the financial year. The franchisor must give you a copy of the statement within 30 days of your request.
If you require help checking your Franchise Agreement before you purchase or if you have a concern contact us.
If you are a commercial tenant you probably already know that retail shop tenants have a higher level of protection than do other commercial tenants. A retail shop landlord is restrained from doing certain things.
You may be a retail shop tenant even if you do not operate a retail shop. It is essential that you are able to determine if you are entitled to the benefits of the act. A link to the Retail Shop Leases Act is set out here.
Landlords are not permitted to pass on the cost of preparing a lease to their retail shop tenant.
There are rules about the maximum proportion of outgoings that a landlord can ask a retail shop tenant to pay.
The landlord is restricted in the way that increases in rental can be imposed.
There are other benefits also. Read more
It is important to know if your lease is classified as a retail shop lease as there are advantages for this kind of tenant. In order to determine if your lease is a retail shop lease see please follow this link. RSL
I attended a seminar held by the Franchise Council yesterday. The speakers were Ralph Edwards and Phillip Chapman of Lease 1. A link to their website is http://www.lease1.com.au/contact.html
There were a number of good points made which have caused me to consider the process of negotiating a lease. We suggest that you always obtain legal advice before proceeding to any negotiation. Here are some suggestions:
1. Pressure on a tenant builds as the date for renewal approaches. Tenants are well advised to Read more
A dilemma which often faces commercial and retail shop tenants in Queensland is whether or not they should register their Lease with the titles office.
It is common in practice for the Tenant to bear the costs of and incidental to the registration of the Lease. This can include the costs of having a Premises surveyed and plans prepared, lodgement fees and requisitions. This can all be a very costly process.
The question that often confronts a Tenant is: do the risks associated with not registering the Lease justify the initial costs of registration?
So what are the risks? Read more
If you are buying into a franchised system, it will be important to ensure two things:
1. that the Franchisor is performing well
2 that the Franchisee’s existing business (if any) is performing well, within the franchise system.
Franchisor Performance
These investigations are part of your due diligence. There is more to due diligence than having your lawyer check the contracts and your accountant check the figures. Obviously these things need to be done and it would be foolish to consider a purchase without these checks however, you, also have a role to pay.
Every Franchisor is obliged to keep a current disclosure document. That disclosure document is a very useful source of information for you. It should, if properly written tell you if the Franchisor has been terminating franchises and if franchises have been failing or disputes have been brewing. It will tell you the experience level of the Franchisor and much more. If you do not understand the disclosure document then you should get assistance. If the disclosure document is not well written this should be a warning to you.
The disclosure document should also provide you with contact details for past and present franchisees. The purpose of this is to allow you the opportunity to make contact with franchisees so that you can make enquiries in relation to how well the system works and what the Franchisor and its representatives are like. Try to read between the lines. Franchisees do not like to openly criticize the Franchisor as they sometimes fear that this may impact on their business.
You should consider the age of the franchise system, the age of the underlying business and the number of Franchisees within the system and their history. A young franchise system may have additional risk as it will not have a track record and the experience of the Franchisor will then be of particular importance. This experience should be tested rather than accepted on face value. A new franchise system may be more flexible with the arrangements that they are prepared to offer, so perhaps you can twist an arm, to get an advantage but, beware of a Franchisor who is too flexible and is prepared to make a lot of changes. This may be a sign of inexperience at best and at worst, is desperation to make a sale.
Take note of the recruitment process and how professionally it functions. A Franchisor who is prepared to take on anyone who is prepared to hand over some cash may be putting the whole system at risk and your business along with it.
Get details in relation to how the training process will work. The training process will be used by the Franchisor to assess you.
Do not underestimate the importance of personalities. You will have to work with the franchisee and its representatives. Find out who will be your direct contact within the franchise system. A franchisee who likes the Franchisor and their representatives is far more likely to succeed. So it is important to make sure that you believe that you can relate to both individuals and the culture in the Franchisor organization.
Actively ask yourself “what is the Franchisor promising to do for me”. The Franchisors obligations should go beyond renting a name. In a well run system the benefits of the system to the franchisee should be obvious – the list is not exhaustive but may include: group advertising and websites, referral of work, a respected brand, training, buying power, centralized phone number and a manual that sets out a unique systems that gives the brand its character.
In a well run system there should be annual events and opportunities for Franchisees to meet with the Franchisor and other Franchisees.
Franchisee Business Performance
Your accountant will obviously deal with issues related to business performance.
You should however also consider some additional matters. Where does the performance of the franchised business sit within the system. In any existing business the Franchisor should be able to provide this information. Does the business perform better or worse than the average franchise within the system? What can be done to improve performance? What risks are there to the continuing performance of the business? You might also ask your accountant to let you know what the benchmarks are within the industry as a whole. Does a franchisee with an average performance within the system outperform the industry average?
Ask these questions of your Franchisor and you will get a feeling for how well the Franchisor knows the industry and how well they understand their own franchise system.
The cost of preparing legal documentation to turn a business into a franchised system is between $8000 and $20,000 plus GST . This cost may be recovered by the sale of franchises. Once the template documents are prepared the franchisee should pay the franchisor’s costs to prepare and issue the documents, as well as the cost of negotiations. We set up franchise systems for clients throughout Australia. Please contact us for an instant quote. The task of preparing this documentation is a routine legal engagement for us however it is a lengthy process where each step in the process must be respected. We can usually provide draft franchise documentation within 2 weeks of receiving instructions.
The cost and time involved is determined by the complexity of the system, and the extent to which the client has resolved issues relating to the workings of the system. For example if the franchise system relates to a home or vehicle based system, then the cost is generally not much more than $8000 plus GST. When it is necessary to incorporate procedures relating to retail shop leasing then this would normally add another level of processes and cause cost increases.
Riba Business Lawyers aim to build an understanding of your concept and system at an early stage so that we can be of use to the franchisor throughout the life of the franchise system.
The standard documents that Riba Business Lawyers prepare are:
We also prepare the first letters, which introduce the franchisee to the documentation in the manner required by the code. We suggest that Riba Business Lawyers are employed to issue the first disclosure documents and Franchise Agreements so that we can ensure that the required certificates are obtained and that time frames are adhered to. It is of little use complying with time frames, if it is not possible to prove that the time frames have been respected. Dairies, telephone notes, and documentation must be kept meticulously.
The cost of the documentation can move toward the higher end of the range as the system becomes more complex. Complexity can be added for instance by:
The costs of preparing franchise documentation is usually reduced if the client is able to provide a well written operations manual which makes clear the way in which the franchise system is intended to operate. The operations manual will usually set out more detail about operations than will the Franchise Agreement itself.
Please contact Riba Business Lawyers for a no obligation free quote. If you are in the early stages of considering franchising your business please contact us and we can set you on the right path. You may be eligible for a free thirty minute consultation.
Most transactions whether for the sale of property or a business include at least two or three important dates. These dates are:
1. The date that the contract is signed by the parties to that contract
2. The date that special conditions are satisfied
3. The date that the contract reaches settlement or completion. The completion date and the settlement date are different words, used to describe the same thing.
Which of these dates do authorities rely upon when determining the date of the sale? Read more
Many people wrongly believe that if an agreement is not put in writing they are not required to honour the agreement. This is incorrect (except for some exceptions, one of which is noted below). A verbal agreement may be enforced by either party to the agreement regardless of whether that agreement is in writing. So be careful what you agree! The difficulty you may have guessed is, proving what was agreed. Indeed we see many agreements, even written agreements that are very unclear. There is sometimes so little detail or, so little care taken, that it is difficult to know what the parties are intending. Read more
Do you lease premises for your business? Many business owners do not realize that when they sell their business and assign their lease, they may remain liable to the landlord for many years after the assignment. If the buyer (the new business owner) can’t pay the rent then the landlord may come looking for the previous tenant to cover the loss. Is that you?
Many leases actually provide that an assignment of the lease does not release the previous tenant from liability to the landlord.
Don’t despair! Read to the end of this article where we make reference to some legislation that may assist if you are a retail shop tenant. Read more
There is lot at stake for an employer who incorrectly identifies a relationship as one between contractors when in fact the relationship is properly defined as one between employer and employee. An improper assessment of the relationship can lead to the financial ruin of a business. The improper assessment may result in a requirement for the unexpected payment of many years of award payments, sick leave, holiday leave, long service entitlements and superannuation. It is essential to get this right.
It is necessary to note at the outset that you cannot agree that a person is a contractor if in fact that person is an employee. An agreement between the parties of this kind is of no effect. The payments due to employees are required by statute and cannot be waived by anyone, not even the employee.
If it looks like a duck and quacks like a duck it is probably a duck. It should be no surprise that the courts don’t place any weight upon the “title” given to a worker. To assess whether a worker is an employee or a contractor the whole of the relationship must be examined.
Since the High Court decision in Hollis V Vabu (2001) 207 CLR 21 the common law distinguishes employees and contractors by considering various indicators under seven headings: Read more
You cannot own a business name!
Before you even commence business you must understand the difference between each of these very different business tools - Business Names, Trade Marks and Company Names.
Anyone considering the sale of their business should also consider these things carefully. If trade marks, domain names, business names and business structures are not all in order, then seek legal advice as early as possible. We have seen business sales fall over because intellectual property including the business name is not registered.
The registration of the name is a process, nothing more, and that process does not guarantee exclusivity. The business owner having registered the business name has no legal right to prevent others from using that name, nor does completing the registration process provide any entitlement to compensation if the name is used by someone else without authority.
So what do you own after registration of your business name? It may surprise you that, you own nothing. Read more
If your Tenant has failed to pay rent or is in breach of some other essential term of the Lease, you may decide that terminating the Lease and searching for a new Tenant is the best way for you to limit your losses. It may be, for instance, that the tenant is impecunious.
Before you will be able to “change the locks” and re-enter your property, Section 124(1) of the Property Law Act provides that you must first serve on your Tenant a notice which states the breach complained of and what the Tenant has to do to remedy the breach.
It is in your best interests that any breach notice is issued correctly the first time. You must ensure that the breach notice is factually accurate and complies with the technical requirements imposed by law.
Providing a defective notice can be costly.
Firstly, a defective notice may give the Tenant the ability to have the notice set aside. This would force you to re-issue the notice thus delaying your efforts to terminate the Lease. This may allow the Tenant to continue to occupy the Premises while in breach until such time as the notice is re-issued correctly. Read more
In our last article we described how it is necessary for a Queensland landlord to issue a form 124 notice before taking any steps to retake possession of premises from a tenant who holds those premises under a Queensland Commercial Lease.
A commercial tenant will always have the right to apply to the courts for something called “relief against forfeiture”. The relief may be given even if the tenant is in default of the lease and even though the lease specifically provides that the landlord has the right to terminate.
Courts have a wide and unfettered discretionary power to take into account all of the circumstances before deciding if the Court will allow a landlord to retake possession from a tenant. Therefore a landlord may not have the ability to terminate a lease even if the tenant is in default.
A tenant cannot claim relief against forfeiture before the landlord has commenced proceedings for possession or has taken possession.
If the tenant anticipates that the landlord is making preparation to take possession then the tenant may apply for an injunction. The tenant may do this once the section 124 notice is served.
So how does the court decide if it will grant this “relief against forfeiture”? Read more
When a retailer purchases from a wholesaler or a manufacturer the retailer must ensure that they know the limitations of the goods purchased. If the goods are faulty then the retailer may be liable to any subsequent buyer.
Whenever a retailer sells goods to a consumer there is a sale agreement and conditions are implied into that agreement. Consumers may make use of these conditions to successfully claim against a retailer.
The stakes can be high! If a product is not fit for a purpose it may cause damage and necessitate rectification works the cost of which may go well beyond the cost of the goods supplied. A glue that doesn’t stick may cost the user more than a tube a glue.
What kinds of conditions may be implied into a contract between a retailer and a consumer?
In some instances a supplier may wish to undertake their own testing in order to ensure that they are not exposed to risk.
If a retailer is told, or it is implied that goods to be purchased by a consumer will be used for a particular purpose there is a condition implied into the contract that the goods will be suitable for that purpose. This is so, even if the purpose is not a purpose for which the goods would normally be used. See section 55 of the Competition and Consumer Act 2010, Schedule 2.
The most obvious way to rebut this implied condition is to show that the consumer did not rely upon, or it was not reasonable for the consumer to rely upon the skill and judgement of the supplier. The consumer may for instance have been obtaining expert advice from some third party who was better placed than the retailer to determine if the goods are suitable for the purpose.
There is an implied condition in section 54 of the Competition and Consumer Act 2010, Schedule 2 that good are of acceptable quality. In making this determination the following matters are considered:
(a) the nature of the goods; and
(b) the price of the goods (if relevant); and
(c) any statements made about the goods on any packaging or label on the goods; and
(d) any representation made about the goods by the supplier or manufacturer of the goods; and
(e) any other relevant circumstances relating to the supply of the goods.
Obviously defects which are known or ought to be known by the consumer are not caught by this implied condition.
This implied condition places the onus on the retailer to know the quality of goods sold.
New National System for Business Names
Local Charity
What happens if a lease is assigned without Landlord Consent?
Selling a Franchised Business? Check the Franchise Agreement First!
Court Proceedings are all about Legal Costs – Use it to your advantage.
What clauses might you expect to see in a Franchise Agreement?
Queensland Law Society Propose Retail Shop Lease Changes
Increase the Value in your Business! By Linda Harley
Business Succession Planning
Should I franchise my business?
Due Diligence – Franchising- Money Issues
Is your Queensland lease a Retail Shop Lease?
Some Things To Consider Before Buying A Business
Selling Your Business – What information do you need to complete the transaction successfully?
Protection for Retail Shop Tenants.
Lease Negotiations – Some Hints
Should a Commercial Lease be Registered?
How to tell if a Franchise System is well run?
What does it cost to Franchise your Business?
What is the legal Date of a Sale
Do Contracts Need to be in Writing?
Still liable under lease when business sold?
Employee or Contractor?
Do you own your business name? No, you don’t. Register a Trade Mark!
How to remove a defaulting tenant.
Tenant Breach may not mean termination!
Retailers, beware of implied conditions!
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