Commercial Law

The pitfalls of not having terms & conditions


What are some of the pitfalls of not having terms and conditions? We hear many risky stories of companies going without terms and conditions altogether or using terms and conditions that do not belong to them and were not tailored to them.

Here we explore just some of the risks of not having terms and conditions.

1)     Payment terms: clarity on when fees and payments are due, how they are to be paid and interest charges and other feesIf it’s not clear what is included and what is excluded, you run the risk of missing out on being able to charge for (and recover cost) for goods and services provided.

2)     Risk allocation: first and foremost, terms and conditions serve to be a risk allocation document that set out the risks relevant to your goods and services and which party will bear each risk and in what circumstances.  Chances are if you don’t have terms and conditions or don’t have properly drafted terms and conditions, you’ve allocated yourself more risk than you bargained for.  For example, what time frames do you accept? Who runs the risk of timing of decision making and instructions of your client or customer? If they don’t respond in the right time frame, does your timeline or deadline push out or do you wear the risk of delayed instructions or delayed client/customer decisions?

3)     Dates: when the agreement starts and finishes.  The date that the services of goods will be provided… All key milestone dates.  These are just some of the things that are covered by well drafted, terms and conditions.  Having certainty around dates minimises the scope for a frustrated customer or client and makes it clear, upfront, what everyone has agreed to.

4)     Exposure to warranty claims: without terms and conditions, you are missing out on clearly prescribed warranty terms that make it clear to any clients, hirer or purchaser, just when you are on the hook for a warranty claim and, more importantly, when you are not on the hook for a warranty claim.  These need to fit within the legal requirements.

5)     Scoping inclusions and exclusions: good terms and conditions make it clear precisely what is included in your scope, your quote or fee and, importantly, what is not included in your scope, quote or fee.  By having certainty around inclusions and exclusions, you may avoid a claim that further goods or services were included in the original scope, quote or fee, for example.

6)     When you are on the hook, and when you are not: good terms and conditions make it clear what you will be responsible for, and the things and actions that you are not responsible for.  Typically, you will not be responsible for any use of your products or services outside of their intended purpose or scope.

7)     Title and risk: for the sale of goods, this refers to when title and risk passes to the end consumer.  For the hire of goods, this refers to when risk in the good hired passes to the other party.  These both make it clear when the other party is on the hook (and, more importantly, when you’re off the hook).

8)     Fees: good terms and conditions would make clear all components of your price or fee.  This includes additional fees such as bond or delivery, fees that apply if things go outside the scope or outside of time.  Having clearly expressed fees can make it easier for you to recover those fees.  This is particularly important for scope increase and to ensure that you are protected for your fees for any such “scope creep”.  Failure to have clear terms and conditions surrounding your fees may mean that you are required to pay for disbursements or extra fees that haven’t been properly disclosed to the customer, or, the customer not having to pay for certain additional services that weren’t disclosed upfront in your terms and conditions. 

 For tailored terms and conditions that properly address risk and allocate risk between the parties, Coutts is here to help.  For further information please don’t hesitate to contact:

Alexandra Johnstone
02 4607 2110  

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Key considerations for employment contracts


Here at Coutts we understand how important it is as a business owner to maintain positive and healthy relationships with employees. We also understand how crucial it is for an employer to protect their interests and limit their exposure to various claims by their employees.

With the combination of the Fair Work Act 2009 (Cth), the National Employment Standards and Modern Awards, entering into well written employment contracts is essential.

In fact, even if you don’t enter into a written agreement with your employees you are still entering into an oral agreement and therefore owe certain duties and obligations to your employees.

Under the National Employment Standards, whether there is a written employment agreement in place or not, a set of minimum entitlements automatically applies to employees. For example, maximum weekly hours, annual leave, public holidays and notice of termination, and these entitlements are on top of the employee entitlements already provided for under the relevant Modern Awards.

Although you do not legally need to provide an employee with a written agreement, employers often struggle if a dispute arises with an employee in the future, as there is no record of the agreed terms of the employment relationship.

So, the question arises, why not enter into a formal written agreement that clearly outlines everybody’s expectations and obligations?

Some key items to consider when it comes to employment contracts are:

1.       Does the agreement comply with current legislation?

Employment agreements will need to comply with the Fair Work Act 2009 (Cth). It is likely that any employment agreement entered into prior to 1 January 2010 will need to be reviewed to provide for the provisions in this act.

2.       Have you reviewed the relevant award?

Employment agreements must comply with the applicable modern award. Awards will often dictate:

·       minimum wages;

·       overtime and penalty rates;

·       types of employment such as casual or permanent;

·       employee classifications;

·       expenses such as travel and meal allowances;

·       breaks, hours of work and rostering;

·       leave entitlements.

It is not uncommon for employment agreements to contain a provision that is inconsistent with the award without the employer even realising, for example paying an employee less than what is required under the award for their position.

In most situations it is likely that the award would prevail and the provision in the employment contract is overridden by the award. To avoid disputes with employees or a breach of the law, it is crucial to ensure the employment terms comply with the law and in particular the relevant award.

3.       Is a restraint of trade necessary to protect your business?

Restraints of trade are very common to try and prevent an employee from working with a competitor, poaching clients or other employees.

However, restraints of trade are only enforceable where the employer can show the restraint is necessary to protect legitimate business interests such as trade secrets, confidential information and clients. The restraint can’t be against public interest, as the employee has a right to earn a living. For example, a restraint which tries to restrict employees from working for a competitor for 100 years within Australia, is unlikely to be enforceable.

Factors to be considered when determining the enforceability of the restraint include the nature of industry, the time of the restraint, the distance of the restraint and overall how reasonable the restraint is.

It is really important to have a properly constructed restraint that is clear, well-worded and reasonable to give the restraint the best chance of being enforceable.

4.       Does the employee know what is expected of them?

A written employment can clearly define the duties and role of the employee to create certainty and ensure the employee is aware of an employer’s expectations.  

5.       Does the agreement protect your confidential information?

Often a business has confidential information which may include things such as financial statements, manufacturing processes, trade secrets or client databases. It is important to ensure your employment agreement protects this information and that an employee is prohibited from disclosing confidential information as it may harm the business.

6.       Have you covered your intellectual property?

Employees are likely to be using your intellectual property throughout the course of their employment, so it’s important to ensure it remains your intellectual property.

Depending on the type of employment, the employee may also be developing or creating new inventions, processes or procedures whilst employed with you. If this is the case, you may want to consider ownership of these creations and covering it in the employment agreement to protect your interests.  

7.       Does it deal with the policies of the business?

You should consider if you have any policies you want to incorporate into the employment contract. For example, a drug and alcohol policy or a work health and safety policy. However, if you are including policies in an employment contract, you may also bind yourself to follow and implement those policies under contract law. Alternatively, you might want policies to be acknowledged by the employee as lawful directions. Generally, if you make the policies accessible and clearly communicated to employees you should be able to rely on those policies.


Coutts have expertise in preparing tailored employment agreements that both protect the interests of employers, as well as ensure employees are aware of their obligations. Call 1300 268 887 and book an appointment with Alexandra Johnstone or Keely Irving today.

For further information please don’t hesitate to contact:

Keely Irving
02 4607 2124

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

The importance of brand ownership: Snapshot of the UGG boot case


Brand ownership is so important for businesses of any size.  There is a common misconception that owning a business name means that you own that brand, but the reality is brand ownership in Australia is protected by trade marking of your brand, through either logo protection or words protection.

The other important basic element of brand ownership is that it is jurisdictional, meaning that trade marks are owned in each jurisdiction.  Just because you own a trade mark in Australia does not guarantee that the same trade mark is available in the USA and vice versa.  Protections are obtained for trade marks in each particular country that you wish to sell your goods and services. 

You can own your brand in one country but not in another.

The recent USA “Ugg” case highlights some important lessons learned.

This case was recently heard in the USA where Australian Leather had sold a total of twelve pairs of ugg boots in the USA between 2014 and 2016, but without having any trade mark rights in the USA to the word or logo “UGG”.  Deckers Outdoor Corporation a Delaware corporation (Deckers) alleged the sales of Australian Leather UGG boots in the USA breached the Deckers owned US trade mark for ugg boots, being the registered brand of Deckers.  On Friday 10 May, a Chicago jury found these sales of ugg boots by Australian Leather in the USA meant that Australian Leather was guilty of wilful infringement of the Deckers owned UGG trade marks.  Accordingly, Australian Leather was ordered to pay statutory damages of $450,00USD.

Lessons learned from this recent Chicago case are that before your business makes any sales (including as in this case online sales) of an Australian good in the United States, you need to ensure that any sales don’t infringe a trade mark ownership in the USA.  This means at a minimum you should check the trade mark protections in existence in the US to ensure that your Australian brand does not infringe on trade mark ownership in the USA.

Secondly, if you plan to launch your brand in the USA it is wise to check whether your brand is available or already owned in the USA, particularly if you are looking at brand continuity within many countries such as Australia, New Zealand and the USA.  Ensuring availability of brand ownership in all the countries you intend to operate is important.  Strategic planning of your intellectual property is really important.

In Australia, let’s have a brief look at the trade marks each of these brands own and what each of these brands are able to do within Australia.   To understand this, let’s briefly examine some of the formal protections that are in place within Australia between these two brands. 

The UGG Australia logo is a logo trade marked and owned in Australia by Deckers.  This was registered by Deckers from 12 February 1999 in Class 25: Footwear, including boots, shoes, and clogs.  Click here to see the logo that Deckers owns and uses in Australia.

Among its trade mark portfolio, rival company Australian Leather owns a trade marked triangular shaped logo featuring the letters U and G in Australia.  This is registered from 1 October 2009 in Class 25: Clothing, footwear, headgear.  Click here to see just one of the logos that Australian Leather owns and uses in Australia.

In Australia, each of Deckers and Australian Leather have the right to sell and brand ugg boots using their trade marks that they own, within the same class (as noted above, being class 25 including footwear and in the case of Australian Leather, extending to clothing).  Provided each of the brands is used in accordance with their trade mark ownership in Australia, each brand is selling footwear under a brand that they own and is not infringing brand ownership of the other party.

At Coutts, we regularly assist with legal advice on brand ownership, trade mark applications, intellectual property licences and intellectual property management strategies and implementation.

For further information please don’t hesitate to contact:

Alexandra Johnstone
02 4607 2110  

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Construction Contractors Beware - High Court confirm monies due to a sub-contractor cannot be withheld



Construction sub-contracts will sometimes include a provision allowing a head contractor to retain a portion of the monies due to a subcontractor until a date after the subcontractor’s works have been complete - for example, at practical completion of the head contract or when the defects liability under the head contract has expired. This delay in payment can cause real unfairness to the subcontractor - especially when there is a large time lag between the works performed by the subcontractor and the completion of the overall build. It also raises the risk of a subcontractor never receiving full payment for its works if the contingent event never occurs or if the head contractor becomes insolvent in the meantime.

Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act)

Recognising the unfairness caused to sub-contractors, the Act when introduced in 1999, included a “pay when paid” provision (section 12) which mandated that any provision in a construction contract which sought to make payment to the subcontractor contingent on the head contractor being paid by a third party, or payment to the subcontractor being made contingent on the operation of another contract, was of “no effect”. The scope of this section has previously received little judicial attention.

High Court rejects a narrow operation of the “pay when paid” provision

In Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5 the High Court upheld the finding of the adjudicator that the “retention” provisions in the subcontract fell within the operation of the Act’s “pay when paid” provision. In doing so, the High Court rejected a narrow approach to this provision which had been adopted by the South Australian Supreme Court. 

In Maxcon’s Case, the building contractor (Maxcon), and Mr Vadasz, a piling subcontractor, were parties to a subcontract under which Mr Vadasz had agreed to design and construct piling for a strata development in Adelaide. The subcontract required Mr Vadasz to provide a "cash retention" equivalent to 5% cent of the overall contract sum with the retention funds to be released in tranches as follows:

·        50% within 90 days of the occupation certificate being obtained;

·        the remaining 50% within 365 days of the occupation certificate being obtained.

Under this clause of the subcontract, Mr Vadasz would be denied a large amount owed for works performed by him at the initial construction stage until one year after the entire building was complete - lengthy period of time.

On 25 February 2016, Mr Vadasz served on Maxcon a payment claim under the Act stating that a progress payment of $204,864.55 was due (this amount included the retention monies). On 8 March 2016, Maxcon provided a payment schedule pursuant under the Act stating that it would pay only $141,163.55, ie it deducted a retention sum and administration charges. Mr Vadasz then applied for adjudication of his payment claim under the Act.

The adjudicator accepted Mr Vadasz's submission that Maxcon was not entitled to deduct the retention sum and determined the adjudicated amount to be equal to the total amount claimed by Mr Vadasz. In relation to the retention sum, the adjudicator concluded that the retention provisions of the subcontract did constitute “pay when paid” provisions and were thereby ineffective - meaning that Maxcon had no right to withhold the retention sum.

Maxcon appealed to the South Australian Supreme Court which found in favour of Maxcon. The Court considered that the retention provisions did not fall within the “pay when paid” provision of the Act on the basis that the date when occupation is achieved is not contingent on Maxcon either being paid or on the operation of the head contract.

The High Court rejected the approach of the South Australian Supreme Court. It held that the “pay when paid” provision of the Act meant that Maxcon could not withhold the retention monies from Mr Vadasz because, ultimately, the release of the retention monies to Mr Vadasz was dependent on the operation of another contract (ie the issue of an occupation certificate for the building was dependent on Maxcon performing the building works as required under the head contract).

Lessons from the Case

The High Court favoured an expansive interpretation to the “pay when paid” provision of the Act. In practice, the effect of the decision is that head contractors need to ensure that their subcontracts do not contain retention provisions which infringe the “pay when paid” provision of the Act, as interpreted by the High Court.

It is important to note that the decision does not affect the provision of “security” under a subcontract such as a bank guarantee or an insurance bond. In light of the High Court’s decision, we recommend that head contractors review their subcontractors to ensure that they are legally compliant and to consider other amendments to provide adequate protections for defective subcontractor works.

For further information please don’t hesitate to contact:

Alexandra Johnstone
02 4607 2110  

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Surcharges on card transactions – are you charging too much?


The Competition and Consumer Amendment (Payment Surcharges) Act 2016 implemented a new framework that banned surcharges by large businesses for card payments that were excessive, including surcharges for the use of Eftpos, Mastercard, Visa or American Express. Whilst large businesses have been subject to this framework since 25 February 2016, from 1 September 2017 all businesses (including small to medium sized businesses) have been banned from charging surcharges that are in excess of the caps set out in the legislative reforms.

What are excessive surcharges?

Under these reforms, a business that is charging a surcharge for credit card payments must not charge more than the actual cost for the business to process the credit card payment via Eftpos, Visa, Mastercard or American Express. If the actual cost to process the credit card payment is a percentage of the purchase amount then the fee charged by businesses to customers can be represented as a percentage, for example, “all payments made with a credit card will attract a surcharge of 0.78% of the purchase amount”.

Under the reforms, businesses can choose to charge a set single surcharge for all payments made with a credit card, although, this set amount has to be the lowest cost for processing the payment that business will have to pay to the credit card processer. This set single surcharge cannot be the average fee but must be the lowest fee. For example, a coffee shop cannot set a single surcharge fee of $0.50 and charge a customer to use a credit card to pay for a coffee worth $4.00 (being a surcharge of 12.5% of the purchase amount).

What surcharges are excluded from these reforms?

These reforms apply exclusively to:

-          Eftpos;

-          Debit MasterCard;

-          Credit MasterCard;

-          Visa Debit;

-          Visa Credit; and

-          American Express cards,

issued by Australian banks.

Imposing surcharges for payments via Diners Club, PayPal or BPAY does not fall under these reforms.

What does this mean for my business?

Businesses should, if they already haven’t, put in place processes within their businesses that require maintaining up to date records relating to actual costs for accepting certain card payments as well as monitoring the actual costs incurred by the business in comparison to the amount of surcharges imposed by the business to customers.

If the Australian Competition and Consumer Commission (ACCC) reasonably believes that a business has included an excessive surcharge on a card payment (and that card payment falls within the scope of these reforms) the business may receive an on the spot fine up to $108,000 for listed corporations, $10,800 for other companies and $2,160 for all other merchants, with these fines being per contravention of the reforms.

Case example – Red Balloon

At the end of 2017 Red Balloon Pty Ltd paid penalties of $43,200 following the issue of four infringement notices from the ACCC for alleged breaches of these reforms.

Red Balloon was found to have charged four customers excessive surcharges for payments made by MasterCard credit, Visa credit, Visa debit and MasterCard debit on 31 March and 30 June 2017.

This case is a key example of how important it is that businesses of all sizes have processes in place to ensure they are not in breach of these reforms and are not charging customers excessive surcharges.

If you are unsure about these reforms and would like more information on ensuring your business is complying with the reforms, the Australian Competition and Consumer Commission has published guidance material for businesses (and consumers) about the ban on excessive surcharges and what it means in the day to day operating of a business. These guidance materials can be found on the ACCC’s website.

At Coutts we can advise and draft appropriate commercial contracts or terms and conditions for your business that cover off the relevant legislation including in respect of credit card surcharges.

For further information please don’t hesitate to contact:

Keely Irving
02 4607 2124

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

What is a privacy policy and does my business need one?


A privacy policy is used by a business to govern how it collects personal information from customers. Privacy policies can often be found on the bottom of websites as a link or may be incorporated in physical forms that customers sign.


The purpose of a privacy policy is to outline to clients how the business appropriately handles, uses and manages privacy information.  A privacy policy should outline what information you collect in the course of conducting your business.

Australian privacy laws are governed by the Privacy Act 1988 (the Act) which, incorporates thirteen (13) Australian Privacy Principles (Principles). 

The Principles cover:

  1. open and transparent management of personal information;

  2. anonymity and pseudonymity;

  3. collection of solicited personal information;

  4. dealing with unsolicited personal information;

  5. notification of the collection of personal information;

  6. use or disclosure of personal information;

  7. direct marketing;

  8. cross-border disclosure of personal information;

  9. adoption, use or disclosure of government related identifiers;

  10. quality of personal information;

  11. security of personal information;

  12. access to personal information;

  13. correction of personal information.


Generally, a privacy policy should be accessible in any reasonable requested form, free of charge, displayed on the business’ website and include the following:

  • The kinds of personal information you collect and hold;

  • How you collect and hold that personal information;

  • The purposes which you collect, hold, use and disclose personal information;

  • How an individual may their access personal information held by you and seek the correction of such information;

  • How an individual can complain about a breach and how you will deal with a complaint; and

  • Whether you’re likely to disclose personal information to an overseas recipient and if so, to specify the overseas counties if it is practicable.


When outlining what kinds of privacy information a business collects it is important to distinguish between:

  • Personal information: which relates to information/opinions that identify an individual such as contact and financial details (whether they are true or not); and

  • Sensitive information: which relates to information/opinions about things like health, religion, political opinions, race or ethnicity.


The Act and Principles apply to:

  • organisations and companies with an annual turnover over $3 million;

  • all private health service providers; and

  • some small businesses.


If your business meets the relevant criteria, you will need to have a privacy policy. Coutts can assist you in determining whether you need a privacy policy. The Office of Australian Information Commission also has a checklist to assist small businesses to assess whether they need to comply with the Act.


Entities required to have a privacy policy must not breach the Principles. There could be consequences for businesses such as a fine where the business does not have a privacy policy when required to or if the business breaches the policy, the Act or Principles.


Coutts have experience in reviewing and drafting privacy policies to meet the requirements of the Act and the Principles. Coutts recognise the importance of understanding your business and your specific processes and procedures to ensure the policy reflects how you do business. For further information on privacy policies please contact the Commercial Law team.

For further information please don’t hesitate to contact:

Keely Irving
02 4607 2124

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Disastrous mistakes in contracting


Having worked in the legal industry for over 23 years, I’m often asked what are some of the more disastrous mistakes that I’ve seen clients make in contracting. Here’s a round up of just some of them:

1) Relying on a handshake deal: whether it’s because the relationship is going so well at the start or one stage or another (honeymoon phase, anyone?) or whether it’s because you’ve been mates for so long... or family... or like family. Every contract is there for your worst case scenario and while it’s hard to envisage anything ever going wrong, let’s remember best laid plans... Time and time again I’ve provided legal services where only one party kept up with their handshake deal or the relationship is falling apart and so the other party isn’t adhering to the handshake deal (among other things). Not putting things in writing, upfront can have a disastrous roll on effect.

2) Relying on past experience or a good track record: because surely when nothing has EVER gone wrong in the past, this time round it’s going to be a repeat of the same... right? Many times I’ve dealt with aggrieved parties who can’t believe the hand they have just been dealt because it’s never happened to them before or never happened with this other party. It only takes once bitten to be twice shy and ensure that you never want to deal with a repeat of what’s in front of you. Not taking the time to prepare a timely agreement, upfront is always a risky move.

3) Starting work when the contract isn’t finalised or signed: Pretty much a classic move by the other party. Once you’ve started work even in the absence of a contract you’ve lost a good deal of your ability to put genuine pressure on the other party to hear out your issues and address them to your satisfaction. Near enough isn’t good enough and you could end up being bound to the draft or, as noted above, losing genuine negotiation ability once you start work. Take the time to work out the lead time and time needed to get the agreement right and at least cover off your top/high risks and get them started before the start date.

4) Signing a contract that’s incomplete: Often there are multiple authors or contributors to a contract- someone else is pulling together the attachments or the scope of work or the KPIs and that part of the contract has been blank every time you’ve reviewed it. Point blank you don’t have certainty of what you’re signing up to. Ask for a complete contract. Review it and be sure it makes sense to you and is in the form and contains the terms you’ve agreed to.

5) Not tailoring the contract: The contract is an allocation of risk between the parties. If you haven’t turned your mind to the risks for a contract, you have missed an opportunity to properly allocate the risks and work out the party best to manage and control the risk. If you haven’t tailored the contract, have you even turned your mind to and covered off the worst case scenario for your project or contract? How is this contract going to work best for you? More often than not a short time investment and a brief risk allocation meeting at your end can identify at least your top five risks and you can weave these into the draft contract and look at who is going to bear those risks in the current version. You have an opportunity to make sure you ensure the contract works to respond to your risks and consider the project/contract at hand, rather than hope that your generic template (or the contract you used last time) does what you want when you need it to.

6) Finding something on the internet: Sadly I hear this one too often. “I got this from the internet”- first of all- you don’t own that document. Secondly, you haven’t turned your mind to whether the document assists you, covers of your risks or is even remotely suitable to you. You’re rolling the dice big time with this approach.

At Coutts, we provide practical, simple and focused legal advice and solutions. We can prepare short and simple contracts right up to the most complex. We can advise you regarding any range of things- risks and issues in the whole contract right down to the top 5 risks only. We can conduct risk allocation workshops and prepare tailored contracts. Rest assured, we are here to help and our advice and solutions are always effective, commercial and clear.

For further information please don’t hesitate to contact:

Alexandra Johnstone
02 4607 2110  

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Unfair Contract Terms Update



The introduction of unfair contract laws has visited a major change in the law relating to standard form commercial agreements. When first introduced in July 2010 the laws only applied to consumer contracts - however from November 2016 the laws were extended to cover small businesses. 

Review of Unfair Contract Laws

There is presently a statutory review being conducted in relation to the extension of the unfair contract laws to small businesses. The time for submissions closed in December 2018 and the review findings are likely to be known by mid 2019.

The review is considering most aspects of the operation of the unfair contract laws including:

  • the definition of a “small business” which is currently defined as a business which employs less than 20 people and the upfront price payable under the contract is less than $300,000 in a single year or $1 million if the contract extends for more than 12 months. Concern has been expressed by a variety of stakeholders that the “head count” aspect of the definition has practical difficulties. The review is also considering whether the amount of $300,000 is an appropriate threshold. The ACCC has indicated that it will submit to the review that the definition of a “small business” be expanded so that more businesses are brought within the regime;

  • whether further clarification should be given in the legislation as to what constitutes a “standard form contract”;

  • whether it is appropriate to continue to maintain the exemptions in the legislation which apply to terms that define the main subject matter of the contract or set the upfront price payable under the contract;

  • whether further examples or clarification should be provided in the legislation as to what constitutes an "unfair" term.


Other potential changes

The ACCC is pushing for changes to the Competition and Consumer Act 2010 (Cth) to allow the pecuniary penalty and other enforcement provisions of the Act to apply to unfair conduct breaches as they do for other breaches of the Australian Consumer Law, such as misleading deceptive or unconscionable conduct. So far the government has resisted those calls. It will be interesting to see if the present review process makes any recommendations on this issue. A change to the law in this area will apply significant added pressure to businesses to ensure their standard form contracts are compliant with the unfair contract laws - especially given the recent increase in the maximum pecuniary penalty order from $1.1 million to $10 million per breach.

Investigation Powers Strengthened

In October 2018, the ACCC’s investigative powers were boosted to enable it to compulsorily obtain information, documents and evidence to determine if a contractual term may be unfair. These new powers apply only in relation to contracts entered into on or after October 2018.


Unfair contract laws have visited a major change on consumer and commercial transactions throughout Australia - especially since November 2016 when the laws were expanded to cover small businesses. The present review process may make recommendations which further expand that reach and potentially result in breaches of the laws being subject to financial penalty orders. We will report further once the recommendations of the review are made public. In the meantime, it would be prudent for businesses to keep their standard form contract terms under review to ensure that they remain compliant with the unfair contract laws.  

For further information please don’t hesitate to contact:

Daniel St George
Senior Associate
1300 268 887

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Do I need to pay stamp duty on a family transfer?


Often a Contract for Sale will not be entered when property is transferred between family members. Such transactions include when property or a portion of a property is gifted, sold (often for less than market value), or when one person is removed from the title of a property that was originally purchased together. Instead, a Memorandum of Transfer will be entered into.

It is a common misconception that no transfer duty (formerly known as stamp duty) is payable on family transfers, however this is not the case. Revenue NSW requires transfer duty to be paid by anyone buying or acquiring property. Therefore, family transfers are still subject to transfer duty even if no Contract for Sale is entered or there is no purchase price. If only a portion of the property is being transferred, then transfer duty will be payable on that portion only.

Revenue NSW calculates transfer duty on the dutiable value of the property. The dutiable value is the higher of the purchase price (consideration) and the market value of the property. Revenue NSW requires an independent valuation to be carried out for a property being transferred between people that are related to determine the property’s market value. This means that an independent valuation will be required for family transfers. In family transfers the market value will often be higher than the purchase price and accordingly transfer duty would be payable on this amount.

It is important to take transfer duty into consideration when planning a family transfer to ensure that the family member buying or acquiring the property has sufficient funds to pay the transfer duty before settlement when the Memorandum of Transfer is lodged with Land Registry Services. If a property is being gifted or sold for less than market value, the family member receiving the property may not have saved for the same and this may mean that finance may need to be sought for payment of the transfer duty.

There are some concessions and exemptions from transfer duty when property is being transferred between family members. These include:

-          Break-up of marriage or domestic relationships

Court Orders or a Financial Agreement made under the Family Law Act 1975 are required to receive an exemption from transfer duty for matrimonial property which is being transferred due to the dissolution, annulment or breakdown of a marriage. For a domestic relationship, a Court Order or a Termination Agreement made under the Property (Relationships) Act 1984 is required for relationship property.

-          Deceased Estates

Nominal transfer duty in the sum of $50.00 only is payable where property is transferred from a deceased family member to a beneficiary in accordance with the deceased’s Will or the rules of intestacy.

-          Transfers between married couples and de facto partners

An exemption from transfer duty is available when the principal place of residence is transferred to add a spouse or de facto partner so that the couple will own the property equally (either as joint tenants or tenants in common in equal shares).

Please note that other eligibility requirements may apply to the above concessions and exemptions.

Should you wish to discuss a family transfer further or determine whether you are eligible for a concession or exemption from transfer duty, please don’t hesitate to contact:

Natali Vujica
Licensed Conveyancer and JP
02 4607 2108

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

The Basics of Business Structure


Whether you are taking on a new challenge and looking to open your own business or purchase an existing business, it’s important to think about what business structure is right for you. You may even be running a business already and considering changing the current structure. Either way you should know the options available to you.

There are four common types of business structures with lots of different pros and cons for each structure.

Sole Trader

A sole trader refers to an individual running a business in their personal capacity. There is no separation between the personal assets of the individual and the business assets of the business.

This is a simple structure and one of the easier structures to set up. Often the sole trader just needs to obtain an ABN and register to business (although some trades/professions will have regulations or licensing requirements governing the sole trader). A sole trader is most common in small businesses such as tradies or home businesses.

A sole trader can employ staff, enter into contracts and usually just lodges a personal tax return.

One of the biggest risks as a sole trader is that you are liable for the debts of the business. Essentially, you could be putting your personal assets at risk as your personal assets could be used to satisfy the liabilities of the business.

If you pass away, the business assets are inherited by your beneficiaries, but the business does not continue to run.


If two or more people want to operate a business together, they can establish a partnership. The maximum amount number of partners is usually 20 with some exceptions such as law firms. Similar to a sole trader, a partnership is not a separate legal entity.

The partners can enter into contracts, own assets and borrow loans.

Most commonly the partners will enter into a partnership arrangement to govern the terms of their partnership. The agreement should set out the rights and responsibilities of each partner, the division of profits, how to deal with a dispute and termination of the partnership. Depending on the terms of the partnership agreement, generally, if a partner dies or exits the partnership, the partnership is terminated, and the remaining partners are in a new partnership.

The issue with partnerships is that all the partners are responsible for the partnership. This means that one partner could be liable for debts of the partnership incurred by another partner so it’s important to think about who you want to partner up with. Partnerships put the personal assets of the partners at risk as their personal assets could be used to pay debts of the partnership.


A company is a separate legal entity which is established to run a business. The company is governed by the Corporations Act 2001(Cth) (Corporations Act) and a company constitution is created to dictate the procedures for meetings of directors and shareholders. Alternatively, a company could use the replaceable rules under the Corporations Act instead of preparing a constitution or use a mixture of both.

A company will consist of a director/s and shareholder/s. A director is responsible for managing the company, whilst a shareholder holds an interest in the assets of the company, usually with a limited liability as to the debts.

A director has a number of director duties under the Corporations Act and can be subject to civil and criminal penalties for breaches of their duties.

As the company is a separate legal entity, the company can enter into contracts, hire employees, and has perpetual succession, which means the operation of the company does not end if a director or shareholder passes away.

A company is meant to be responsible for its own assets and liabilities. However, in some cases directors may be personally liable for example if they signed a personal guarantee when the company entered into a loan agreement.

A company may be more expensive to establish and may have ongoing auditing and reporting requirements.


Trusts are another way to run a business, the most common trusts are unit trusts or discretionary trusts. The trust will have a trustee who holds the property on trust for the beneficiaries.

A trustee of a trust could be a company or an individual. The trust will be established with a trust deed which governs the trust.

Trusts can be flexible with how they distribute income to beneficiaries which may have some tax advantages. For example, the trustee could distribute income to all or some of the beneficiaries (who can be family members).

There is no public disclosure requirements of the finances of the trust so this structure can offer more privacy.

Due the complex nature of a trust it may be more expensive and difficult to set up.

Choosing the right structure

Each structure has its different advantages and disadvantages so it’s important to consider what option works best for you and your business. Coutts can assist in guiding you to find the right fit which factors in protecting your assets, the costs and complexities of setting up the business and maintaining the structure. Coutts can collaborate with financial advisers so that you can ensure you also chose a structure which has the most advantageous tax implications for your business.


For further information please don’t hesitate to contact:

Alexandra Johnstone
02 4607 2110  

Keely Irving
02 4607 2124

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Can My Business Send Any Promotional Emails Without Restriction?


No, there are restrictions on businesses sending promotional or other emails.  Such emails cannot be sent without complying with the relevant legislation and without your business covering off certain steps.

This is a simple starting summary for the requirements your business must comply with in sending promotional or other emails.

The requirements apply to commercial emails. The Spam Act 2003 (Spam Act) broadly prevents the sending of commercial emails except for emails that contain “consent, identify and unsubscribe”. 

Although the legislation has been in force for quite some time, the issues around commercial emails and consent have become popular and in focus this year, particularly with a refocus on other privacy related laws in 2018.

Is my email a “commercial email”?

It is important that businesses understand the nature of a “commercial email” and the exemption under the Spam Act for “commercial electronic messages” and the practical considerations.

A commercial email is a “commercial electronic message” for the purposes of the Spam Act.  The definition is very broad in section 6 of the Spam Act, including:

(a)         to offer to supply or to advertise or promote goods or services;

(b)         to advertise or promote a supplier or prospective supplier of goods or services;

(c)         offer to supply or advertise or promote land or an interest in land or a supplier or prospective supplier of land or an interest in land;

(d)         To offer to provide or to advertise or promote a business opportunity or investment opportunity.

A commercial email includes promotion, advertisement or offers regarding supply of goods, services, land or business and investment opportunities. 

What are the requirements for “consent, identify and unsubscribe” generally?

Commercial emails must contain “consent, identify and unsubscribe”.  This can be summarised as follows:

(a)         Consent- means that the email recipient has consented to getting the email.  Express consent must come first (you can’t email to get consent, as this email may be a breach of the Spam Act itself).  Consent can be from a form, a box on website, verbal… as long as the person actually consents.  Generally, consent cannot be given on behalf of another. (section 16 of the Spam Act).

(b)         Unsolicited commercial electronic messages must not be sent: Section 16(1) of the Spam Act provides that:

a person must not send, or cause to be sent, a commercial electronic message that:

(i)           has an Australian Link; and

(ii)          is not a designated commercial electronic message.

Relevance of consent- Section 16(1) of the Spam Act does not apply if the email account holder consented to the sending of the message. (If you are saying the email recipient has consented, then you need to prove that the recipient has consented)- section 16(5) of the Spam Act

(c)         Identify- means the email must have accurate information about the person or organisation that authorised sending the email (section 17 of the Spam Act).

(d)         Unsubscribe- means the ability to click “unsubscribe” (section 18 of the Spam Act).  This needs to be functional.

Are there any exemptions from complying with “consent, identify and unsubscribe”?

Yes, there is a (fairly limited) exemption from your business complying with the Spam Act requirements of “consent and unsubscribe”, but generally no exemption from complying with “identify”.  Basically, if your business is sending a “designated commercial electronic message” then the requirements for consent and unsubscribe do not apply.

So what is a “designated commercial electronic message”? This is found in Schedule 1, section 2 of the Spam Act.  “Designated commercial electronic messages” are not considered “commercial emails”.

A designated commercial electronic message is (emphasis added):

The message is ONLY factual information (with or without directly related comment) and any or all of the following additional information:

(i)           the name, logo and contact details of the individual or organisation who authorised the sending of the message;

(ii)          the name and contact details of the author;

(iii)        if the author is an employee – the name, logo and contact details of the author’s employer;

(iv)        if the author is a partner in a partnership – the name, logo and contact details of the partnership;

(v)         if the author is a director or officer of an organisation – the name, logo and contact details of the organisation;

(vi)        if the messages sponsored – the name, logo and contact details of the sponsor;

(vii)       information required to be included by section 17;

(viii)      information that would have been required to be included by section 18 if that section had applied to the message; and

-assuming that none of that additional information had been included in the message, the message would not have been a commercial electronic message; and

-the message complies with such other conditions or condition as specified in the regs.

The “Australian Link”

The Spam Act is intended to have broad application including covering any email sent within Australia, sent on behalf of an Australian organisation or accessed from a computer service or device in Australia.

Generally speaking, the application of the commercial email provisions come back to the notion of an “Australian Link”.

(a)         Australian Link (per section 7 of the Spam Act) includes:

(i)           the message originates in Australia- section 7(a) Spam Act;

(ii)          the individual or organisation who sent the message or who authorised sending the message is physically present in Australia when the message is sent or has central management and control in Australia when the message is sent- section 7(b) Spam Act;

(iii)        the computer, server or device used to access the message is located in Australia-7(c) Spam Act;

(iv)        the relevant electronic account holder is-7(d) Spam Act:

(A)        an individual who is physically present in Australia when the message is accessed; or

(B)        an organisation that carries on business activities in Australia when the message is accessed; or

(v)         if the message cannot be delivered because the relevant electronic address does not exist- assuming that the electronic address existed, it is reasonably likely that the message would have been accessed using a computer, server or device located in Australia- section 7(e) Spam Act.

What if my business is just offering or promoting land?

Generally, your business needs to comply with the requirements of the Spam Act if the email is offering to “supply or advertise or promote land or an interest in land” or offering to “supply or advertise a supplier or prospective supplier of land or an interest in land”.

What if my business is just offering or promoting a business or investment opportunity?

Again, generally your business needs to comply with the requirements of the Spam Act if the email is offering to provide or advertising or promoting a “business opportunity or investment opportunity.”

Steps for businesses to tick off for each email

(a)         Consider whether your email is a commercial email.

(b)         If your email is a commercial email, or you will err on the side of caution, have you:

(i)           obtained (prior) consent from the email recipient to send the email?

(ii)          accurately and properly identified your organisation?

(iii)        Included a functional unsubscribe feature in the email?

Exemptions for Government bodies

Government bodies have an exemption from compliance with this Spam Act in some cases (see Schedule 1, section 3). There are number of limbs that Government bodies should ensure are satisfied to obtain coverage of the exemption.   Each of the limbs below must be “ticked off” for each particular email sent without the requirements of “consent, identify or unsubscribe”:

(a)         authorisation: the sending of the message must be authorised by a Government body; and

(b)         goods or services: the message must relate to goods or services; and

(c)         supplier or prospective supplier: the Government body (must be the supplier or prospective supplier of the relevant goods or services.

If each of the three limbs set out above are satisfied by the Government body, then the relevant email will be considered a “designated commercial electronic message” and will not have to comply with the “commercial electronic message” provisions in the Spam Act section 16 (consent) and section 18 (unsubscribe).

As noted above, the Government body will still have to comply with section 17 (identification of accurate sender information).


At Coutts, we can provide legal advice regarding whether or not your proposed emails are commercial emails, as well as tailored advice for your business regarding complying with the Spam Act.  On a related note, we also draft privacy policies, website terms and conditions and disclaimers and privacy statements.

For further information, please contact:

Alexandra Johnstone
02 4607 2110

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Copyright 101


‘Copyright’ is a phrase most people have heard or used, but do we actually know that much about it?


What is Copyright?

Copyright is an exclusive legal right given to a creator for a certain amount of time over material they have produced. Copyright is usually given to people who produce creative work like authors, artists or musicians.

Copyright will protect work such as:

  • Music;

  • literature;

  • artistic work like paintings;

  • sound recordings and broadcasts;

  • films;

  • computer programs.


Copyright will not cover:

  • ideas, techniques and information;

  • names, titles or slogans;

  • images of people.


Copyright generally means that other people need permission to use the work which is protected. It is possible to provide licenses for other people to use copyrighted material.


When does someone get copyright?

Lucky for the creator of the work, copyright automatically applies once the work is written down or recorded in some way.

There is no way to register copy right in Australia, it is not necessary to apply to receive the protection of copyright.


How do I let people know I have copyright?

As there is no way to register copy right there is no database to check in the same way as other intellectual property such as trademarks.

Some people will choose to use the copyright symbol © and a copyright notice which consists of the owner’s name and year of publication.

A copyright notice and the symbol are optional and not mandatory in Australia. 


How long does copyright last?

Generally, copyright will last for the life of the creator plus 70 years. In some situations, the length is based on the year of publication, so copyright will last 70 years after it was first published.


Infringement and Disputes

If there is a dispute about who owns copyright it will usually be heard by a court to make a determination.

Copyright means people need permission to use the work. If somebody commits a copyright infringement it may be necessary to issue a letter to demand to request the infringing act stops or to commence legal proceedings.  


How does Copyright work internationally?

There are a number of international treaties which mean that material created in Australia is recognised and protected in most countries overseas.

Due to the international treaties and the Copyright Act 1968 (Cth), Australia protects majority of copyright material produced overseas.


Coutts has experience in dealing with Intellectual Property and invites you to contact us if you have any enquiries.


For further information please don’t hesitate to contact:

Rebecca Watts
02 4607 2148


This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Liability for Company Directors & Officers: Work Health & Safety


The case of SafeWork NSW v Harris Holdings NSW P/L; SafeWork NSW v Harry Zizikas [2017] NSWDC 299 is interesting for a number of reasons.  This case in highlights the important responsibilities of directors and officers in terms of ensuring the work, health and safety of employees.  The case also highlights the importance of putting even simple, straightforward and reasonably practical safety measures in place in the workplace.


The relevant workplace in this case was that of Harris Holdings, being a business processing domestic and commercial weight including disposal and recycling of waste product and demolition and building site waste. 


At the workplace, Mr Mohammad was responsible for sorting and processing commercial and domestic waste.  Tragically, Mr Mohammad was hit by and caught his foot in the excavator tracks when that excavator moved.  Mr Mohammad was wearing his high visibility clothing at the time of the incident. Mr Mohammad was not responsible for operating the excavator but worked nearby the excavator.  The operator of the excavator was initially unaware of the actual incident because he was facing forward and could not hear the commotion surrounding the incident.  Mr Mohammad was dragged about a metre forward.  After Mr Mohammad was freed from the tracks he unfortunately suffered cardiac arrest and tragically and avoidably died on the site.


To note

There was no documented system of work in place for the tasks undertaken at the site.

Manuals had not been provided to the site workers on the actual site.  The manuals provided to SafeWork NSW did not specifically address the excavator.  (Generally speaking, the content of the manuals was generic in many respects).

No formal work health and safety procedures were developed for the site or implemented.

The four (key) site workers were unaware or unclear as to what a risk assessment, safe work method statement and tool box talk were.

There was no documented risk assessment for the excavator.

The relevant Australian Standard regarding Powered Industrial Trucks had not been implemented, including failure to create a safe zone around the excavator.

The actual manual for the particular excavator had not been followed.

The procedures on the warning sticker within the cabin of the excavator will also not followed.

There was no traffic management plan in place.

Order against the Company

Harris Holdings was convicted.  SafeWork NSW ordered the company, Harris Holdings to pay a $300,000 fine, 50% of which was paid to the prosecutor.  Prosecutor’s costs were also required to be paid.


Order against the Sole Director

The sole director was convicted.

It is important to note section 27 of the Work Health and Safety Act 2011 (Act) which provides for the duty of officers to exercise due diligence.  In this section of the Act, due diligence is listed as “taking reasonable steps” that include the following as noted in the Act (shown directly from the Act in italics):

a)    To acquire and keep up-to-date knowledge of work health and safety matters,

b)    To gain an understanding of the nature of the operations of the business… Or hazards and risks associated with the operations,

c)    To ensure that the person conducting the business or undertaking has available for use, and uses appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out..,

These are noted to include, specifically:

  • Reporting notifiable incidents

  • consulting with workers

  • ensuring compliance with notices under the Act

  • ensuring the provision of training and instruction to workers about work health and safety

  • ensuring that health and safety are presented either received their entitlements to training.

d)    To ensure the person conducting the business has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information, 

e)    To ensure that the person conducting a business undertaking has, and implements, processes for complying with any duty or obligation of the person conducting a business or undertaking under the Act.


The sole director (Harry Zizikas), had failed his duty under this section 27 of the Act to ensure that Harris Holdings hard complied with its primary duty of care under section 19 (1) which can be summarised as ensuring, so far as is reasonably practicable, the health and safety of workers.


To note, Mr Zizikas was actually responsible for all of Harris Holdings’ training and the development of systems for the site operations


Mr Zizikas was required to pay personal fine of $60,000, 50% of which was paid to the prosecutor.  Again, prosecutor’s costs were also required to be paid.


Key lessons learned:

Clearly, both companies and their directors and officers should not underestimate the importance of putting even simple, straightforward and practical measures in place to address, work health and safety risks.  Practical measures can be implemented to (at least partially) address, work health and safety risk.  For example, practical measures such as following the warning sticker, reading and understanding and implementing measures from the manual, purchasing the Australian Standard and implementing it.


Training and education of staff is very important.


Considering and addressing risk upfront, as well as having the right systems and processes in place is paramount to ensure the work health and safety of your employees.


At Coutts we provide legal advice in respect of compliance with your obligations under the legislation.  Further, we are here to workshop risk allocation for each of your projects and to ensure that that risk allocation importantly filters through to your contracts in a clear and practical way.  We ensure that your important work, health and safety processes and procedures are adequately dealt with in your contracts and subcontracts.

For further information, please contact:

Alexandra Johnstone
02 4607 2110

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

I'm only loaning money to family or friends. Surely I don't need a loan agreement?


There are many different situations where people might loan family or family friends money for lots of different reasons.


Even though loaning money may be a very supportive thing to do, it’s important to consider how you can minimise risk to yourself, what could go wrong and what could help prevent issues arising.


A Loan Agreement is definitely helpful for your worst-case scenario if the relationship with the person you have loaned money to goes sour or if things go off course.  Like all other contracts, the Loan Agreement is designed to set out risk allocation and responsibilities and be helpful when things go wrong.


So, what might go wrong?

Some people may be gifting the money but if you are expecting to be repaid either in full or in part you should put the agreement in writing. There are countless ways for issues to arise if it is unclear without a Loan Agreement in place, including that the loan was a loan to begin with and on what terms the money was to be repaid, whether interest is repayable and so on.  


Below are some examples where loans to family and friends can result in a legal predicament:

1.     Disagreement that there is even a loan

If you don’t have an agreement clearly outlining the terms of the loan you may find yourself having to argue that the loan even existed in the first place. This hypothetical situation became a reality for an elderly couple in the case of Berghan & Anor v Berghan [2017] QCA 236 when their son denied there was a loan between the parties and instead said that the money was a gift to him.


Whilst the couple ended up being successful with the Court of Appeal declaring that there was a loan and it was not a gift, the couple had to endure several court hearings (and plenty of costs) to achieve this outcome.


This demonstrates the issues caused by informal loan transactions between family members and proves that it is better to be safe than sorry. 


2.     Demands to be repaid in full

Whilst many people may focus on how much money is being loaned, it’s important to consider exactly when the money should be repaid. It is possible that the parties will end up with different expectations of when the money should be repaid if the payment terms are not clearly outlined in a Loan Agreement. Without the existence of a loan agreement the lender may be expecting and relying on a repayment and the unclear deadline is missed.


On the other hand, if there’s no agreed repayment dates in writing, the lender may make a demand that the entire amount is repaid immediately, and the borrower may not be able to do this. 

It is very easy for a disagreement to occur and result in a party needing to threaten legal action. A written Loan Agreement can prevent this situation and the unnecessary stress that may come along with it.


3.     Family Law Property Settlements

It is not uncommon for loans from family members or friends to become an issue of dispute in Family Law proceedings. For example in the matter of Liakos & Zervos & Anoy [2011] FamCA 547 the husband argued that he owed his father a principal amount of $587,000.00 plus interest which was loaned to him in separated transactions over a number of years. However, the wife disputed these loans. 


The Court found that the loans were not previously enforced by the father (the lender) and were not expected to be. The steps taken by the father to enforce the debts appeared to coincide with the wife’s application to the Court to divide the assets between the wife and husband.


Normally, in Family Law a court will distribute the net value of assets between the parties after the debts have been deducted. In this situation the loans from the father were not included as a debt to be deducted. Therefore, there was a significantly larger amount of money to be divided between the husband and wife without repayment to the husband’s father. Basically, the wife received a share of the money the husband believed was owed to his father.


Loans can have implications on Family Law proceedings, so it is important to have the right documents in operation to avoid this as much as possible.


4.     A Loan in exchange for living in a property

Sometimes people will come up with an arrangement where the lender will give a loan and the borrower will then let the lender live in their property. For example, a mother may sell her property and give some of the proceeds to her daughter with the intention that the daughter will buy a large property in her sole name with a granny flat for the mother to live in.


In this situation, technically the new property is solely in the daughter’s name. If a disagreement arises the daughter may try and evict the mother and deny the arrangement ever existed.

Coutts is here to help and can provide advice on the best way forward to protect an interest in property.


How can I protect my legal interests?

At Coutts we can assist you in negotiating and preparing a Loan Agreement or other suitable document that mitigates the legal risks and issues as much as possible. For example:


  1. We can prepare a written Loan Agreement which is signed by all relevant parties and outlines the terms of the loan.

  2. We can advise on the differences between secured and unsecured loan agreements.

  3. We can take you through options for security such as potentially lodging a caveat or mortgage over the property under the Loan Agreement.

  4. We can advise you on the enforcement options if the there is a dispute or default under the Loan Agreement.


It is important to obtain legal advice prior to entering into a Loan Agreement or entering into any form of loan arrangement. Clearly defined terms in the format of a proper Loan Agreement can help reduce the room for disagreements.


It is also important to know whether any time limitation periods for enforcing the loan apply.


At Coutts we can help with all elements of your Loan Agreement so please contact our commercial law team if you have any questions or enquiries.


For further information please don’t hesitate to contact:

Rebecca Watts
02 4607 2148


This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Is Alliancing Contracting Back In Vogue?


I first heard about alliancing contracting way back around 2004 as it was gaining attention then as a new and improved contracting model, back then, allocating risk and responsibility to the party to the contract that was most suited and able to bear that risk, among other things. 


Alliancing contracting is largely for the building and construction areas but arguably with application to other projects more generally for its fundamental principles. 

The ideas underpinning alliance contracting including mutual acceptance and sharing of project risks, project issues, project completion and project records and resources was fairly new and forward thinking back in 2004 when I first really took alliancing contracting on board for genuine consideration as a contracting model. 


Fast forward to 2018 and it would appear that these forward thinking ideas of alliancing contracting are indeed back in fashion and up for genuine consideration once again. 


So what is alliancing contracting and how is it fundamentally different to more traditional contract forms?

Using a risk allocation process to properly allocate risks between the parties, explore likely risks and test them against the contract (and with the other party) and really think about “worst case scenario” and deal with it have all been fundamental steps in contract preparation.


Because the above steps are critical for any well prepared contract, it is always essential that parties understand each other’s needs, appetite for risk and skill set. 


The alliancing method still encompasses these fundamentals to a degree and rightly so. However, the key difference is that explored risks are typically allocated to all parties. “Worst case scenarios” are explored but allocated to all parties with shared responsibility. The alliancing contract generally provides for mutual risk sharing, pain shared equally, gains shared equally. 


The underlying principle under all this sharing is that parties must act in good faith and in line with the also entrenched principle that there are no disputes under the alliancing framework. Problems are solved together, often with “outside the box” thinking. The parties are committed to making things work, once again based on the key principle of shared risk, responsibility, shared pain, shared gain. 


There is a further key principle that during the project phase, there is no fault on either party and therefore no single party that has caused any particular liability. For any issues that arise during the actual project, the parties work towards mutually dealing with those issues and reallocating risk and responsibility for those issues based on consensus, agreed decision making.  


Parties to the alliancing framework are transparent and open. Record keeping is fundamental for both parties as is mutual access to those records. 


Defect responsibility is shared. Defect rectification in terms of time and cost is shared between the parties.  Parties mutually share control of the project, again agreeing on all project aspects. 


The National Alliancing Contracting Guidelines template provides a useful framework for an alliance and sample agreement.   It clearly requires all parties are committed to the project, committing people and resources, engaging within the alliance, working through the project, issues, actual and potential disputes, project changes and responsibilities as a shared group comprising different parties. 


It will be interesting to see how existing Government projects using alliancing contracting stack up long term. It will also be interesting to reflect back on alliancing contracting and see how alliancing can apply best to the private sector. 

Please contact Alexandra Johnstone if you require legal assistance or have questions pertaining to alliancing contracting. We are here to help!

Alexandra Johnstone
02 4607 2110

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Minimising Bad Debts For Businesses


The decision for a business to trade on credit terms carries risks which need to be properly assessed and mitigated at the outset.


The use of an effective and up-to-date Credit Application form and Terms and Conditions (T&Cs) are critical to minimising the risk of bad debts - however, there are also other simple checks which may point to increased credit risks.


General Risk Factors

You should consider and assess the following issues before deciding whether to proceed with a credit transaction:

  • is the other party an existing customer of your business. If so, for how long?

  • how was the other party referred to you?

  • how long has the other party been trading? Is it a start-up or well established business? What is its payment history like? Has this deteriorated recently?

  • is the other party a trustee company?

  • is the other party domiciled in Australia or overseas? Where are its assets located? What are its assets?

  • what industry sector is the other party is in? Is this an industry which is trading poorly or in structural decline?

  • does the other party’s business have a stable revenue base - or does it generate revenue from being awarded irregular contracts?

  • what is the size of the transaction relative to the size of your business? If you do not receive payment will this threaten the viability of your business?

  • has the other party displayed recent adverse signs - for example the loss of key staff or adverse publicity?


Sourcing further information


More specific information on the other party can be sourced by:

  • obtaining credit reports from one of the leading credit agencies operating in Australia ie Equifax (formerly Veda Advantage):, Experian: or Dun and Bradstreet (D&B):;

  • an ASIC (Australian Securities and Investment Commission) search:;

  • a PPSR (Personal Property Securities Register) search:;

  • searching Court lists for current litigation or Court judgments:;

  • land title and lease searches (NSW Land Registry Services):;

  • bankruptcy searches (for an individual):;

  • checking the other party’s web-site and social media sites (the absence of a web-site or recent social media activity could be a cause for concern);

  • online reviews (check if the reviews are recent and whether there is a pattern of adverse reviews);

  • speaking with trade referees and other existing customers and suppliers with recent trading experience with the other party.


Credit Application

Also essential to mitigating bad debts is having an effective and comprehensive Credit Application form which obtains as much information as possible in relation to:

  • the financial position of the other party including, where appropriate, the provision of copies of financial statements, management accounts and bank statements;

  • all current addresses, telephone numbers, email addresses and, where appropriate, photo identification of the other party and its director/s;

  • names of trade referees and their contact details.


Together with the Credit Application form should be your Terms and Conditions which set the legal framework for the transaction. T&Cs should be comprehensive and, where appropriate, include provision for:

  • directors guarantees;

  • security (including PPSR compliance);

  • suspension of supply and set-off clauses;

  • jurisdiction clauses.

It is highly recommended that your Credit Application and T&Cs be reviewed regularly by a lawyer to deal with changes in the law and changes in the nature of your business and/or the product or service being supplied.

Expert legal advice can also be provided to ensure that the T&Cs will withstand legal challenge under the new “unfair contract laws” - which since November 2016 can apply in relation to business-to-business standard form contracts.


The risk of bad debtors is ever-present - however, from our experience, the risk can be reduced by:

  • effective and targeted due diligence before entering into a credit transaction and throughout the trading relationship; and

  • an effective Credit Application and T&Cs.

Coutts has considerable experience in preparing Credit Applications and T&Cs for a range of clients across different industries and in recovering bad debts when they arise.

Please feel free to contact Daniel St George if you would like to discuss or if you require any assistance in relation to reducing your bad debt risks.

Daniel St George
Senior Associate
1300 268 887

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Critical Issues for Selling or Purchasing a Business


Deciding to sell or purchase a business can be one of the biggest decisions you will face as a business owner. Even once you decide to sell or purchase a business there are several things that must be considered to try and ensure the sale runs as smoothly as possible. We have listed a sample of the critical issues that usually arise and considerations and risks for both vendors and purchasers.

1.       Critical: Ensuring you use right structure to sell or purchase the business: asset sale or share sale

There are two common ways to buy or sell a business. It is important to make an informed decision as to the structure that is the most appropriate for you.

The first option is an asset sale. This is where the vendor (business seller) uses a Sale of Business Contract to sell the assets of the business to the purchaser. For example, the purchaser buys the business name, the equipment, the stock and the clients under that contract.

The second option is a share sale. This structure is typically used where the business is run by a company. Here, the vendor (business seller) is usually the director/shareholder of the company and will sell the business by selling their shares in the company through a Share Sale Agreement. This means that the purchaser will buy the shares in the company and become the director and shareholder in place of the vendor. By doing this the purchaser controls the company and as such controls the business and its assets and liabilities.

Coutts assists vendors and purchasers in identifying risks with each available structure and determining which structure is the most appropriate for the transaction.

2.       Critical: Ensuring new business activities by the vendor are properly dealt with

If you are a vendor and you are thinking about opening a new business, you will need to consider whether you want to engage in certain activities which will compete with the business you are selling.

For example, you might be a real estate agent, and you might want to open another real estate agency in the future. Often a purchaser of a business will include a restraint period for a certain period of time and kilometres. So, you need to consider how this might affect or restrict you opening a new business.

On the other hand, if you are purchaser it is important to think about setting restraint periods and distances as you’d probably be unhappy if the vendor opened the exact same type of business down the road a few weeks after you bought, and business and customers started going there instead.  That is, if the vendor became your direct competitor.

3.       Critical: Ensuring confidentiality

Selling a business will often involve providing information that is confidential and private. Coutts can help you consider whether a confidentiality agreement is necessary for the parties as we understand the importance of ensuring the confidential details of a business remain confidential.

4.       Critical: Understanding possible tax consequences

Once the purchase price is agreed on, both the vendor and purchaser need to think about how they are going to divide the purchase price between the good will and equipment of the business. This is known as apportionment of the purchase price and could have potential tax consequences.

Another factor to consider is whether the business will be sold on a walk in/walk out basis. For example, will the business continue to trade up until the settlement date? Will the vendor provide the purchaser with everything they need to continue to operate the business? This is known as the supply of a going concern and will affect whether GST is payable on the sale or not.  

5.       Critical: Ensuring the business premises are properly dealt with

If there is a lease over the property where the business trades, a vendor will need to get permission from the landlord to assign the lease to the purchaser or to permission from the landlord to grant a new lease to the purchaser.  It is important for a vendor to arrange this otherwise after the sale of business, the vendor risks remaining committed under a lease for a business that it no longer owns.

For a purchaser, it is often crucial to obtain the consent of the vendor’s landlord because and obtain permission to use the premises when they become the business owner. That is, a purchaser can’t run the business at that location without the lease or other appropriate permissions.

Coutts regularly negotiate with landlords’ solicitors to arrange assigning or granting leases or any other necessary permissions to obtain or deal with the right to use the premises for the new purchaser or the removal of risk in premises for the vendor.

6.       Critical: Ensuring employee entitlements are properly dealt with

If you’re a vendor and you have employees, you will need to think about their entitlements such as annual leave, sick leave and long service leave, and whether the employees are being transferred to the new purchaser. If the employees are transferred there is usually an adjustment for the purchaser to cover employee accrued entitlements.

If you’re a purchaser, you need to think about whether you will keep any of the current employees. You need to inform the vendor of your decision, so they can either give notice to employees to terminate their employment or make an adjustment in your favour for any entitlements owed to the employees that you are retaining.

7.       Critical: Ensuring stock is properly dealt with

A vendor should consider whether they have stock that needs to be sold with the business. For example, if you own a hairdressing salon you might sell shampoos and hair straighteners from suppliers. If so, a vendor should consider whether the value of the stock is included in the purchase price or if the purchaser will be paying extra for the stock, together with how the stock is valued.

If the purchaser is paying extra for the stock, you should also consider how the stock will be valued. Perhaps the vendor and purchaser will complete a stock-take together, or a sum will be agreed, or maybe an independent valuer will be appointed to complete the stock-take.

For a purchaser, it is important to know whether the purchase price includes stock or if you need to pay extra for stock, so you can ensure that you have the funds available. If you are paying extra for the stock, you should consider negotiating a trading stock maximum with the vendor. This means you can set a maximum amount for stock, for example $20,000.00. Then, for example, if the stock is valued at more than $20,000.00 you can choose which stock to purchase up to that amount.



A properly prepared Sale of Business Contract is integral in addressing risks and issues, protecting your interests and ensuring that what can be a complicated process is as stress free as possible. Even if you and the purchaser have agreed on what seems like the major elements of a sale of business, such as the purchase price and the date for settlement, Coutts are here to assist in ensuring the smaller (but often equally as risky) details that are the foundation to a smooth sale of business are considered and dealt with and ensuring risks are addressed long term and properly.

If you are after the best advice on how to sell or purchase a business, call Coutts Solicitors & Conveyancers on 1300 268 887 and book an appointment

For further information please don’t hesitate to contact:

Rebecca Watts
02 4607 2148


Keely Irving
02 4607 2124

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Food For Thought: Franchising


Each franchising arrangement can be entirely unique, but there are a number of key considerations that ought to be at the forefront of any franchising arrangement. Below are just a few of the key considerations for franchising.


1)    What does the franchising arrangement provide? Both the Franchisor and the Franchisee should examine whether or not the franchising arrangement covers off at least the key elements that are expected in a franchise. These key elements include:


a.    Intellectual property and brand – it is particularly important that the Franchisor actually owns the trade mark and associated intellectual property and has control over brand fundamentals. Ownership of the brand name by the Franchisor is critical and the brand name ought to be trade marked. If the Franchisor does not have the trade mark, there can often be substantial risks to all the parties in a franchising arrangement longer term;


b.    Business systems and manuals- these should be comprehensive, clear and valuable. Whether you are the Franchisor trying to encourage Franchisees to set up a franchise with great business systems and manuals, or whether you are the Franchisee looking to see what you’ll be getting for your franchisee fee, the business systems and manuals are paramount; and


c.    Exclusivity- It is important the parties are happy with the area that the Franchisee will control and benefit from under the franchising arrangement. Protections are typically put in place to ensure that the Franchisee obtains good value for money for a clear, defined, exclusive area or territory for the franchise.


d.    Goodwill – the franchise and Franchisor should have an excellent reputation built (typically) a significant period of time.


2)    How is risk allocated between the parties? – which party is in the better position to control the risks associated with the franchise arrangement? What are the particular risks for each franchise and how have these been covered off in the franchising arrangement and documented?


3)    What level of control is appropriate for the Franchisee? Both the Franchisor and Franchisee should be clear and upfront about what the Franchisee will control and what will be controlled by the Franchisor. Often a Franchisee will control the day to day business, client interactions and transactions and the Franchisor’s role in this regard is to ensure that the business systems and manuals provide transparency and an effective, demonstrated way to run the franchise business in these areas.


For example, the business systems and manuals may provide a process and manner for the Franchisee to manage and control its own social media, marketing and incoming client calls. The Franchisor provides an efficient system and consistent way to deal with these things, as opposed to the Franchisor centrally controlling all the social media, marketing and incoming client calls. Generally speaking, the parties should consider the end client and which party is best to manage that end client relationship.


4)    From the Franchisor’s perspective, how do each of the individual franchises interact or overlap? How the Franchisor deals with other franchises from a broad, overarching perspective is critical. It can be easy for a Franchisor to simply deal with each individual franchise independently, without taking stock of how each of those individual franchises stack up as a whole and the impact of one individual franchise on another franchise. Individual franchises should be considered by a Franchisor particularly as to how each one will protect its exclusivity and customer base transparently and fairly and maintain the key things that make the franchise arrangement viable. From the Franchisee’s perspective, the benefits of the franchise arrangement can be watered down if there are insufficient overarching considerations given by the Franchisor to the viability of each individual franchise.

At Coutts, we regularly prepare franchise agreements and suites of documents for Franchisors including disclosure statements and franchise agreements. We also review and provide legal advice on franchising documentation for Franchisees. We love conducting risk allocation workshops to ensure that each franchise is set up properly from the onset.

Please contact Alexandra Johnstone if you require assistance with your franchising arrangement or want legal advice or assistance on any proposed franchise. We are here to help!

Alexandra Johnstone
02 4607 2110


This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Small Business Grant – what is it and who is eligible?


The Small Business Grant provides small business owners in NSW who don’t pay payroll tax, a grant of $2,000 for each new full-time position employed in their business.

1.     Who is eligible?

This one-off payment is available for each new full-time position in your business and to be eligible, at a minimum, you must:

(a)   have an active ABN; and

(b)   not be liable to pay payroll tax during the initial 12-month employment period for a new employee.


The current payroll tax threshold for this financial year is $850,000. For more details on payroll tax liabilities and to see if you may be liable for payroll tax, please visit Revenue NSW’s website at:


It is important to note that this grant only applies for employment that commences prior to 1 July 2019.


2.     What type of employment is eligible for the grant?

In order to be eligible for the grant, the new employee must be employed in a role that is a “new job”.

A “new job” is created if the number of your full time equivalent (FTE) employees increases (and is maintained) over a 12-month period from the creation of the new position.

When registering a new job for the grant, the Small Business Grant (Employment Incentive) online application will assist you in calculating your FTE. Alternatively, you can manually calculate your FTE using a formula.

If your FTE falls below the required number for more than 30 days, the Chief Commissioner may not approve your application for the grant.


3.     Are there any exclusions?

You are not able to claim the grant for an employee if:

(a)   that employee is not considered a common law employee;

(b)   that employee was employed by you in the previous 12 months before you applied for the grant;

(c)   any wages paid by you for that employee are exempt wages under the Payroll Tax Act 2007 (NSW); or

(d)   you are already entitled to a grant, subsidy or other assistance from the government for that employee.


Public, local or municipal bodies or authorities are also excluded from claiming this grant.


4.     How much is the grant?

The grant is a one-off payment of $2,000 for each eligible full time employee.

In the case of part time or casual employees, the grant amount will be pro-rated based on a formula.


5.     How do I register?

You will need to apply online for the grant once the new employee commences. You can then claim the grant once the position has been filled for 12 months. The online form can be accessed at


At Coutts we provide a range of services to businesses including drafting employment agreements for clients as well as providing advice on employment relationships and obligations under the Fair Work Act 2009 (Cth) and relevant Awards. We also assist with grant applications and advice.

To learn more about the Small Business Grant please go to:

For further information please don’t hesitate to contact:

Keely Irving
02 4607 2124


This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Can I write anything I want in a review, irrespective of commercial relationships?


The short answer to this question may well be “no” following recent case law and examination by the Australia Competition and Consumer Commission (ACCC) in respect of consumer reviews.

Recently, the ACCC has recognised the fact that online consumer reviews are relied upon more and more by consumers as a means of making more informed purchasing decisions. As such, the ACCC has taken an interest in protecting the integrity of such reviews, to ensure businesses are not using this method of advertisement to conduct in a misleading or anti-competitive way.

The ACCC has published a supplier guide called “What you need to know about: Online reviews – a guide for business and review platforms” (the guide) which can be found here.

This guide includes a set of principles that are aimed are preventing the occurrence of misleading reviews online. These principles refer to information contained on ‘review platforms’ which can include blogs, business websites and social media.

The three principles discussed in this guide are:

1.       Be transparent about commercial relationships

Commercial relationships between review platforms, reviewed businesses and/or reviewers could lead to unfair advantages between competing reviewed businesses, according to the ACCC.   Consumers usually expect that reviews on independent review platforms such as Yelp, Google Reviews or OpenTable are not affected by commercial relationships. A business for example, can pay for advertising on a platform’s website or even pay commission payments to the review platforms for purchases made from the platform. The guide and the ACCC is concerned that these commercial relationships may result in reviews with higher ratings, possibly through the removal/non-placement of negative reviews, than would occur if there were no commercial relationship.

It is integral that these types of relationships do not create an unfair advantage and mislead consumers. Disclosure of such commercial relationships to consumers is one way of ensuring you are not breaching the Competition and Consumer Act.


2.       Do not post or publish misleading reviews

Reviews that are presented by a business as impartial, but were actually written by the reviewed business, a business competing with the reviewed business, third persons paid to write a review when they have not used the product or service or someone who has used the product or service but who writes an inflated review because they have been provided with a financial (or any other) benefit, may mislead customers and therefore lead to a breach of Australian Consumer Law.

In the guide, the ACCC recommends removing any reviews which are known to be fake, biased or misleading.  From a practical perspective, we understand that removal of an existing review can be challenging and as such it is important to ensure that the way you and your business make reviews, elicit reviews or deal with reviews complies with the Australian Consumer Law and not in any way misleading or problematic.


3.       The omission or editing of reviews may be misleading

Although the ACCC recommends the removal of reviews that are fake or biased, the guide also indicates that the removal or editing of reviews, especially when this has an effect on the overall rating given by a review platform, may also lead to misleading conduct.

The ACCC has previously taken action against companies for posting fake or misleading customer reviews and testimonials, or even preventing customers from making reviews. For example, in the relatively recent decision of the Federal Court in the case ACCC v Meriton Apartments Pty Ltd [2017] FCA 1305, Meriton Apartments was found to have contravened the Australian Consumer Law.

In that case, Meriton had a relationship with TripAdvisor which involved sending the emails of their guests to TripAdvisor, which would then be used by TripAdvisor to send an email invitation to the guest to write a review about their stay. It was found that Meriton was inserting the letters “MSA” into the email addresses of guests who had made complaints about their stay, meaning they would never receive the email invitation from TripAdvisor. Not only were the wrong email addresses being “used”, Meriton withheld a number of emails during periods where there had been a major fault within the hotel, such as a hot water failure.

Meriton’s breach does not necessarily fall within the principles discussed in the guide, proving further how broad the Australian Consumer Law is.  The case is also illustrative that it is imperative that businesses are proactive in ensuring any reviews or testimonies published and relied on by consumers are not misleading or deceptive.

It is integral that as a business owner, you are aware of your obligations under Australian Consumer Law in relation to reviews by customers and particularly reviews that you request or that you yourself provide.


Coutts can assist your business and provide advice as to risks in reviews and your conduct under this body of legislation to ensure you have peace of mind that your business activities around reviews do not breach the requirements of consumer law.

For further information about reviews about your business or the Australian Consumer Law, please don’t hesitate to contact:

Keely Irving
02 4607 2124