Contract Laws

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.