Litigation & Dispute Resolution

Board Spills - Getting the notice right

The interaction between section 249D and section 203D of the Corporations Act 2001. 

There has been a significant rise in shareholder activism over the last couple of years.  Often this is driven by shareholders with financial capacity and vision for the company, wanting to turn around the company’s stagnant fortunes and share price.  A common mechanism for shareholders to replace the board of a public company is a section 249D notice under the Corporations Act 2001.  A section 249D notice allows a shareholder or shareholders with at least 5% of a company’s share capital to force the company to call a general meeting to vote on resolutions proposed in the notice. 

There are a number of formal requirements, and many tricks and traps for shareholders, in utilising the section 249D notice provisions.

The section 249D notice must be in writing, state any resolution to be proposed at the meeting, be signed by the members making the request, and be given to the company.

On receipt by the company of a valid section 249D notice:

• its directors have 21 days to call a general meeting;
• if the meeting is to remove a director,  at least 21 days’ notice of the meeting must be given to shareholders; and
• the meeting must be held within 2 months of the company receiving the section 249D notice.

If the section 249D notice proposes resolutions for the removal of all or certain directors, the requirements of section 203D Corporations Act 2001 also need to be kept in mind. Section 203D(2) requires shareholders who want to remove a director at a general meeting, to give notice of their intention at least 2 months before the meeting is to be held.  The second part of section 203D(2) provides that if the company calls a meeting after that notice of intention is given, the director can be removed at the meeting even if the meeting is held less than 2 months after the notice of intention is given.

It is the structure of section 203D and the interplay between sections 203D and 249D that tends to cause grief for requisitioning shareholders.

Common mistakes

Because section 249D does not explicitly refer to section 203D it is sometimes overlooked.  If a section 203D notice has not been given,  or it is given after the section 249D notice, a proposed resolution in the section 249D notice to remove a director is ineffective and there would be a question whether the company had to call the meeting at all.

Other issues we sometimes see are the two notices being combined into one, or being issued on the same day. 

The two notices cannot be combined.  That is, the section 249D notice cannot also serve as the shareholder giving notice of their intention under section 203D.  There are at least a couple of reasons for this.

• Firstly, the legislation is drafted in a way that contemplates two separate notices being given.  They have different functions, different formal requirements, and can be given in different ways.  In drafting sections 203D and 249D, Parliament could have but did not expressly dispense with the need for notice under section 203D when a section 249D notice is being given.
• Secondly, it is not conceptually possible for a shareholder to give notice of their intention to remove a director at a meeting to be held in at least 2 months’ time, if the shareholder is on the same day by a section 249D notice compelling the company to call that meeting in no more than 2 months’ time.  The shareholder cannot have the required ‘intention’ at the time of giving the section 203D notice. 

As well as being separate notices, the section 203D notice should be given to the company before the section 249D notice is delivered; not on the same day.  That is the only way sections 203D and 249D can operate harmoniously and with full effect.

The section 203D notice can and should be given in such a way that it is possible for the meeting to be held after the 2 month period required by section 203D (although the company may then make its own decision to bring the meeting forward as foreshadowed by the second part of section 203D).   This can only happen if the section 249D notice is given to the company at least a day after the section 203D notice is given; preferably longer (out of an abundance of caution).   The exact timing will depend on the circumstances in each case.

We recommend that shareholders intending to use section 249D to remove directors from the board of a public company get legal advice on the process, and assistance to ensure each step is properly planned and executed.  Conversely, directors receiving such notices should seek prompt advice about how to manage their obligations under the Corporations Act 2001 and what steps can be taken to defend themselves and the company against the attack.

For advice to prepare for or defend an attempted board spill, please contact Dominique Engelter on +61 9481 2040 or dominique.engelter@whlaw.com.au.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

THE ACCC CONTINUES ITS CRACK DOWN ON THE USE OF UNFAIR CONTRACT TERMS

Uber Eats agreed this week to amend its contracts with restaurants following an investigation by the ACCC.

From at least 2016, Uber Eats’ contracts made restaurants responsible for the delivery of food orders despite the restaurants having no control over delivery. Under the contracts, if food became “substandard” (for example hot food became cold), Uber Eats could force restaurants to refund the costs of the food to customers, regardless of whether the issue was the restaurants fault. 

ACCC chair Rod Sims said that the ACCC considers these terms to be unfair “because they appear to cause a significant imbalance between restaurants and Uber Eats; the terms were not reasonably necessary to protect Uber Eats and could cause detriment to restaurants."

Uber Eats agreed to amend these terms to make it clear that restaurants will only be responsible for matters within their control, such as incorrect food items or incorrect and missing orders. Under the amended contracts, restaurants will also be given the ability to dispute responsibility for refunds to customers and Uber Eats will reasonably consider these disputes.

Mr Sims said that the case was a “great illustration” of why the Australian Consumer Law (ACL) needs to change. Under the current ACL, a court can declare unfair contract terms to be void and unenforceable, but they are not illegal and penalties cannot be imposed. Mr Sims said that if such contracts were illegal, “we’d be taking them to court for significant penalties.”

Red Rich Fruits

The agreement from Uber follows on from the case involving Red Rich Fruits, a fresh fruit trader, agreeing to amend its standard form contract with growers last month after the ACCC raised concerns that the contract contained an unfair contract term.

The contract term in question allowed Red Rich Fruits to seek credit from a grower in respect of produce which Red Rich Fruits had on-sold to a third party, but which was rejected by the third party. The ACCC considered it likely that this term was an unfair contract term in breach of the ACL. The ACCC also raised concerns that Red Rich Fruits’ standard form contract included terms that did not comply with the pricing formula and payment transparency terms set out in the Horticulture Code of Conduct, a mandatory industry code prescribed under the Competition and Consumer Act 2010.

Red Rich Fruits agreed to amend the pricing and payment clauses in its standard form contract in response to the ACCC’s concerns.

What does this mean for your business?

These cases demonstrate the ACCC’s willingness to crack down on the use of unfair contract terms by businesses across all industries.

The ACCC has also indicated that strengthening unfair contract term protections for small businesses remains one of its top priorities. The ACCC has called for legislative changes so that it can seek penalties and compensation for small businesses where large businesses impose unfair terms.

To avoid sanction by the ACCC and bad publicity (and possible penalties in the future), all businesses should review their standard form contracts to determine if any terms are unfair. 

For further information on unfair contract terms and how we can assist you please contact, please contact Damian Quail or Hanna Forrest on +61 8 9481 2040 or damian.quail@whlaw.com.au or hanna.forrest@whlaw.com.au. 

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Franchising: Federal Court freezes assets of franchisor to protect franchisees who claim they were misled

Background

Jump Swim is an Australian-based franchisor that sells franchises to franchisees wishing to operate their own Jump Swim School to supply learn-to-swim services to children. According to its website Jump Swim has over 65 swim school locations in Australia, and has established operations in Brazil, New Zealand and Singapore.

ACCC secures freezing order against Jump Swim

On 7 June 2019 Justice O’Bryan of the Federal Court made orders freezing the assets of Jump Loops Pty Ltd (Jump Loops) and its parent company Swim Loops Holdings Pty Ltd (collectively Jump Swim), various associated entities of Jump Swim  and Jump Swim’s managing director, Ian Campbell.  His Honour also ordered that Jump Swim and the associated entities identify their liquid assets world-wide comprising cash securities and deposits of any kind held with a financial institution.

Why is the ACCC taking action?

The ACCC instituted proceedings against franchisor Jump Swim in the Federal Court, alleging that it made false, misleading or deceptive statements about Jump Swim School franchises, in breach of the Australian Consumer Law (the ACL). The freezing order was sought prior to commencing the misleading and deceptive conduct action, for reasons as explained below.

The ACCC is alleging that Jump Swim made representations in its promotional material that a prospective Jump Swim School franchisee would have an operational swim school within 12 months of signing a franchise agreement, when it did not have reasonable grounds for making that statement.

The ACCC claims that there are over 90 Jump Swim franchisees who did not receive an operational swim school within 12 months or at all. The initial costs of setting up a Jump Swim School generally ranged from approximately $150,000 to $175,000.

What is a freezing order?

A freezing order is a form of injunction restraining a party from parting or dealing with property prior to a final court judgment. 

The purpose of a freezing order is to prevent the frustration or inhibition of the Court’s process by seeking to avoid the danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied because assets have been dissipated. 

The principles for granting a freezing order are well established:

• the applicant must show that there is a reasonably arguable case
• the applicant must show that there is a risk of dissipation if the injunction is not granted
• the applicant must show that the balance of convenience favours granting the injunction. 

The Court’s judgement on the freezing order application

In regards to the first condition, Justice O’Bryan was satisfied that the evidence produced by the ACCC shows that there was at least a serious question to the tried whether the alleged conduct of Jump Swim amounted to contraventions of the ACL. This appeared to include conduct that the franchises were sold on a ‘turn-key’ basis, to be handed over and ready to operate and, a representation in the promotional material that there would be a “12 month turnaround from sign to open” of the franchise. The Court referred to the ACCC’s claim that representations made were false, misleading or deceptive and/or likely to mislead or deceive because some 90 franchisees were not provided with an operational franchise within 12 months. 

As to the second condition, His Honour was also satisfied that there was a reasonable apprehension that assets owned directly or indirectly by Jump Swim and Mr Campbell would be dissipated so as to frustrate the relief sought by the ACCC. This apprehension arose from the fact that Mr Campbell and Jump Swim were facing multiple proceedings in Australia, new corporate entities had been recently created to acquire and take over the franchise business and Mr Campbell had established similar business operations in America and New Zealand (and there was evidence of material financial transactions between the Jump Swim Group and the overseas entities).  

Lastly, in relation to the balance of convenience, Justice O’Bryan noted that the application was brought on an ex-parte basis to avoid risk of the dissipation of assets. An ex-parte application is a Court proceeding where only the party seeking the Court order appears before the Court. In those circumstances, His Honour ordered that the orders would continue until 12 June 2019, at which time the prospective respondents and associated entities would have an opportunity to be heard. On this basis, it was found that the prejudice to the prospective respondents and associated entities would be temporarily confined. The freezing orders have now been extended until the hearing and determination of the substantive proceedings.

The misleading and deceptive conduct proceedings in the Federal Court

After obtaining the freezing orders the ACCC instituted proceedings in the Federal Court against Jump Swim, alleging that it made false, misleading or deceptive statements about Jump Swim School franchises in contravention of the ACL, as described above. Mr Campbell is also a respondent in the proceedings. The ACCC claims that Mr Campbell was involved in the conduct.

According to the ACCC’s Concise Statement dated 17 June 2019, the ACCC claims that Jump Swim made false or misleading representations in its promotional material about the time it would take to set up an operating swim school business franchise in breach of sections 18 and 29 of the ACL, and that Jump Loops accepted payment from franchisees without providing operational franchises within the time specified or within a reasonable time, and in circumstances where it did not have reasonable grounds to believe it could do so in contravention of section 36 of the ACL. 

In a media release dated 18 June 2019 the ACCC says that many franchisees were not provided with an operational swim school within the represented time frame of 12 months or at all. The ACCC Chair Mick Keogh also said “Franchisors need to take their obligations under the Australian Consumer Law seriously. Purchasing a franchise is a big decision, and people looking to open a franchise business rely on the information from the franchisor being accurate…We allege this conduct caused substantial harm to franchisees who paid significant sums but did not receive an operational swim school within the time specified, or at all”.

The ACCC is seeking injunctions, declarations, pecuniary penalties, redress for franchisees, disqualification orders, and orders as to findings of fact, and costs.

What this means for Jump Swim franchisees 

Jump Swim franchisees should keep informed of the ACCC’s action as it proceeds, as the outcome may directly affect them. Should there be orders made against Jump Swim or if Jump Swim becomes insolvent, this could have immediate repercussions for them. 

Are you a franchisor or franchisee?

These proceedings act as a reminder to all potential franchisees to do their own due diligence before entering into a franchisee agreement and making payment. 

Franchisors also need to be very careful about what promises they make to prospective franchisees.

Williams + Hughes can assist you in several ways, including the following:

• drafting or reviewing franchise agreements
• advising in relation to exiting a franchise arrangement
• advising in relation to misleading and deceptive conduct by franchisors
• advising in relation to disputes concerning the franchise agreement, non-solicitation and restraint of trade of former franchisees, and claims relating to competition by the franchisor or other franchisees.

For further information on how we can assist please contact Leanne Allison or Damian Quail on +61 8 9481 2040 or leanne.allison@whlaw.com.au and damian.quail@whlaw.com.au.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Employment law changes from 1 July 2019 - take note !

Employers should take note of changes to the employment landscape that take effect on 1 July 2019.

Increase in the National Minimum Wage and modern award rates

As discussed in a separate Williams + Hughes Insight, from 1 July 2019 the: 

• national minimum wage  will increase to $740.80 per week or $19.49 per hour (an increase of $21.60 per week or $0.56 per hour); and
• minimum full time wage rates set out in modern awards will increase by 3%. Allowances will increase in accordance with the provisions of the relevant modern award.

Changes to the Maximum Superannuation Contributions Base

The Maximum Superannuation Contributions Base is set by the Federal Government each year. It is used to determine the maximum limit on any individual employee’s earnings base for each quarter for superannuation guarantee payment purposes. An employer does not have to pay the superannuation guarantee for the portion of earnings above this limit. 

From 1 July 2019 the Maximum Superannuation Contributions Base increases to $55,270 per quarter, up from $54,030. So, the maximum superannuation guarantee payments that an employer is liable to pay from 1 July 2019 per employee is 9.5% of $55,270, or $5,250.65 per quarter. Calculations should always be made on a quarterly, not annual, basis.

Changes to the High Income Threshold

From 1 July 2019 the high income threshold will increase to $148,700 per annum (from $145,400 per annum).  This is important because the high income threshold sets the limit on an employee’s ablity to bring unfair dismissal proceedings.  If an employee’s annual rate of earnings is more than the high income threshold, the employee is not able to bring an unfair dismissal claim unless they are covered by a modern award or enterprise agreement.

The increase to the high income threshold also means that the maximum payable compensation for unfair dismissal increases to $74,350, which is 50% of the new high income threshold.

The increase to the high income threshold also sets the minimum guaranteed earnings hurdle for an employee to be a “high income employee” for the purposes of modern award coverage.  If a high income guarantee is entered into, the employee is not subject to the application of any modern award.

When calculating earnings for the purpose of the high income threshold, the following items are included:

• wages and salary
• any amounts applied or dealt with on the employee’s behalf (for example salary, sacrifice amounts)
• the agreed monetary value of any non-cash benefit (for example, use of a company car, laptop or mobile phone).

The following are not included as part of an employee’s earnings:

• payments that cannot be determined in advance (for example bonuses, commissions, incentive‑based payments and overtime, unless the overtime is guaranteed)
• reimbursements for business expenses
• superannuation guarantee contributions.

New whistleblower laws

Under the new whistleblower regime, public companies, proprietary companies that are trustees of a superannuation entity and large proprietary companies must have a compliant whistleblower policy and must provide it to their employees.  

As discussed in a separate Williams + Hughes Insight, from 1 July 2019 new asset, revenue and number of employees thresholds apply when determing whether a company is a large proprietary company. 

The new whistleblower regime takes effect from 1 July 2019. Although the new regime applies to disclosures made on or after 1 July 2019, the disclosures may relate to conduct that occurred before that date. 

The requirement to have a whistleblower policy in place commences on 1 January 2020, although a small proprietary company that becomes a large proprietary company after 1 January 2020 will have an additional six months to establish a whistleblower policy.

Given that companies need to comply with the new laws from 1 July 2019 and must have compliant policies in place by the dates referred to above, companies must take steps to prepare compliant whistleblower policies. Managers and staff must also be trained to properly handle disclosures that are protected under the new whistleblower laws - the new laws require this. The whistleblower policies must also be made available to officers and employees of the company. 

Williams + Hughes can assist you in several ways:

• drafting or reviewing policies that comply with the new legislation;
• providing training for managers to understand the new whistleblower regime and how to properly handle whisteblowing disclosures; and
• preparing "cheat sheets", templates and protocols for managers to use when a whistleblowing disclosure is made.

For further information on how these changes may impact on your business please contact Damian Quail or Matthew Lenhoff on +61 8 9481 2040 or damian.quail@whlaw.com.au or matthew.lenhoff@whlaw.com.au.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Keeping your financials “off the record”: from 1 July 2019 fewer companies need to lodge their financial accounts with ASIC

Recent changes to the Corporations Act 2001 remove the need for many companies to lodge annual financial accounts with ASIC.

With effect from 1 July 2019, the criteria in the Corporations Act 2001 for classification as a “large proprietary company” have been changed. The revenue, asset and employee thresholds that determine whether a proprietary company is considered “large” will double.

Why is this important?

Large proprietary companies are required to prepare and lodge an annual financial report, a director’s report and an auditor’s report with ASIC each financial year. This can be both costly and time consuming.

In addition, reports that are lodged with ASIC become publicly available documents - so competitors and customers can easily access sensitive, private financial information about a company.

If a company is required to lodge the required reports but fails to do so, penaltieDamian Quails can be imposed on the company and its officers.

Avoiding the requirement to lodge financial reports with ASIC will not only save a company time, money and effort, but will also keep private financial information confidential. With some exceptions, small proprietary companies generally do not need to comply with these requirements to lodge (but are required to keep sufficient financial records).

So, it pays to be small!

What is the change?

The Corporations Amendment (Proprietary Company Thresholds) Regulations 2019, which will commence on 1 July 2019, amend the definition of “large proprietary company” by doubling the current revenue, assets and employee thresholds. A proprietary company will be “large” if it meets two of the three thresholds at the end of its financial year, as shown in the table below:

The doubling of the thresholds will relieve many proprietary companies from the ASIC reporting obligations. The Federal Government estimates the changes will reduce SME regulatory compliance costs by $81.3 million annually, with a third of proprietary companies currently classified as large expected to fall below the new mandatory reporting thresholds.

What should you do now?

If your company is currently classified as a large proprietary company you should closely consider the revenue, gross assets and employee thresholds to determine whether the company may fall below the increased thresholds from 1 July 2019. If so, your company may be relieved from the time and costs associated with the compliance obligations of a large proprietary company. And you can keep your private financial information out of the hands of your customers and competitors!

For further information on how these changes may impact on your business please contact Damian Quail on +61 8 9481 2040 or damian.quail@whlaw.com.au.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Minimum wage increase to apply in Australia from 1 July 2019

All employers should be aware of the Fair Work Commission's (FWC's) decision regarding the 2018/2019 annual wage review.

The FWC announced a 3% increase from the first full day period on or after 1 July 2019 to the:

• national minimum wage, which will increase to $740.80 per week or $19.49 per hour (an increase of $21.60 per week or $0.56 per hour); and
• minimum full time wage rates set out in modern awards. Allowances will increase in accordance with the provisions of the relevant modern award.

The FWC’s decision is lower than last year’s 3.5% increase to the national minimum wage (and lower than the 3.3% increase from the previous year). The FWC stated that the prevailing economic conditions justified a lower increase this year.

In light of the FWC’s decision, it is important that employers review their rates of pay before 1 July 2019 to ensure employees are appropriately paid in accordance with the new wage rates. There can be significant penalties against employers, and potentially directors, who fail to meet their minimum wage obligations.

For further information on how these changes may impact on your business please contact us on +61 8 9481 2040.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Peanut Butter Battle of Jars and Trade Marks

Peanut butter is big business in Australia.  In 2017 the Australian peanut butter market was worth $110 million in annual sales. A brand recognisable to many Australians - Kraft peanut butter - has been available for purchase in Australia since 1935.

The Federal Court recently handed down judgment in a dispute between Bega Cheese Limited and Kraft Foods Group over the appearance of product packaging (trade dress, also known as “get up”) and copyright in a “peanut butter jar with a yellow lid and a yellow label with a blue or red peanut device” (Kraft Foods Group Brands LLC v Bega Cheese Limited (No 8) [2019] FCA 593).

The background to the dispute is complicated and involved various restructurings, licence agreements and assignments between the parties. In 2017 Bega bought the peanut butter business and associated assets and goodwill from Mondelez Australia (Foods) Ltd, a subsidiary within the global Kraft Foods group. After the sale was concluded Kraft temporarily exited the peanut butter market in Australia. Subsequently Kraft returned and wanted to continue to use the distinctive colours and get up previously used for Kraft branded peanut butter products, as depicted below.

However, after closing off the deal between Bega and Mondelez, Bega had commenced selling Bega branded peanut butter products using a trade dress that Kraft claimed constituted misleading and deceptive conduct, breach of contract, passing off and trade mark infringement. Bega countersued and alleged that Kraft had infringed their intellectual property rights and engaged in misleading and deceptive conduct. Bega claimed that as part of the deal with Mondelez, Bega had bought the right to use the distinctive trade dress, including the goodwill associated with it. Bega’s peanut butter jars are shown below.
 

                                                                                                   
On 1 May 2019 the Federal Court ruled in favour of Bega, finding that it had the right to use the distinctive peanut butter trade dress. The Court confirmed that the sale or licensing of unregistered trade marks is not possible without assigning the underlying goodwill of the business. It came to the conclusion that Bega had acquired all rights to the peanut butter trade dress, including the underlying goodwill, and could continue using it in relation to its peanut butter. The Court also awarded damages against Kraft/Heinz for infringing Bega’s intellectual property.

A key factor in the Court’s decision was the fact that the trade dress previously owned by Kraft could have been protected as a registered trade mark but it had never in fact been registered. The Court fight between Bega and Kraft could likely have been avoided if a registered trade mark had been obtained. Instead, both sides had to go to Court to try prove that they had exclusive rights to the use of the unregistered trade mark.

Benefit of registering trade marks

The case is a timely reminder of the value of a registered trade mark.  If Kraft had registered the distinctive Kraft peanut butter trade dress as a trade mark it would have been in a much stronger position to retain rights in its intellectual property.

In addition to trade dress, trade marks can also be a shape (the Coca Cola bottle), a colour (purple for Cadbury chocolates or the orange colour of Veuve Clicquot’s champagne), a sound (the Nokia ring tone) and even a scent (eucalyptus scented golf tees).

Colour, shape, lids, jars and trade dress are important features and should be protected as registered trade marks.

The best protection by far is to register the trade mark under the Trade Marks Act 1995 (Cth). This solution is low cost, and results in an Australia-wide, potentially perpetual, statutory monopoly in the brand. Also, once a mark is registered, enforcement is relatively simple as you don’t need to prove title.

A search of the trade mark register shows that Bega has now filed two trade mark applications to protect the trade dress in the smooth and crunchy versions of the peanut butter.

                                                                                                                      
  
For further information on how these changes may impact on your business please contact Madeleen Rousseau, Special Counsel, on +61 8 9481 2040 or madeleen.rousseau@whlaw.com.au.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

New laws imposing mandatory requirements for businesses that supply services: your T&C’s and website must be updated by 9 June 2019

Recent amendments to the Competition and Consumer Regulations 2010 impose new mandatory wording requirements in relation to the supply of services and also the supply of goods in combination with services.

The new requirements take effect on 9 June 2019. Failure to comply with the new laws can attract a $50,000 fine.

Australian businesses that have not updated their trading terms and conditions, product manuals, warranty cards, marketing materials, product packaging and websites must act quickly to avoid breaching the new laws.

The new mandatory wording requirements make it compulsory for businesses to inform consumers that any warranties or guarantees against defects that are contained in a business’ documents or website do not override the statutory consumer guarantees provided in the Australian Consumer Law (the ACL).

The new requirements apply in respect of any services supplied at a value of $40,000 or less or in respect of any services of a kind that are usually acquired for personal, domestic, or household use or consumption.

The new laws prescribe mandatory text that must be reproduced verbatim. The specific wording required depends on whether the warranty or guarantee against defects applies in relation to the supply of services or the supply of goods in combination with services. The supply of goods alone is already covered by mandatory text requirements that have been part of the ACL for some time.

The ACL also imposes other requirement that warranty documentation and T&C’s must comply with. Now is a good time to ensure your documents and websites are up to date.

For further information on how these changes may impact on your business please contact Damian Quail, Director at Williams + Hughes on +61 8 9481 2040 or damian.quail@whlaw.com.au.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.