Competition and consumer law

Competition and consumer law lawyers Sydney

The Competition and Consumer Act 2010 (Cth) and the Australian Consumer Law set out various key requirements regulating the standard of conduct that is expected of businesses generally as well as more stringent requirements when dealing with consumers.

In summary they ensure amongst other requirements:

Certain guarantees and warranty requirements when supplying goods and services to consumers are provided.
Businesses are restricted from engaging in certain conduct that is unfair, misleading, deceptive, or unconscionable;
Advertising and marketing related conduct is appropriately regulated;
Product safety and standards;
Anti-competitive behaviour is prohibited; and
Standard form contracts containing unfair terms are unenforceable.

Our team of highly skilled and experienced lawyers is dedicated to providing you with the highest quality legal advice and representation. With a deep understanding of competition and consumer law, we are well equipped to guide you through every step of the legal process.

Whether you’re a business facing competition law issues, or a consumer seeking protection under consumer law, we can help. Our services cover a wide range of legal issues, including anti-competitive conduct, misleading and deceptive conduct, and unfair contract terms, just to name a few.

We pride ourselves on providing our clients with a personalized and tailored approach to their legal needs. Our lawyers take the time to understand your specific situation and goals, and we work closely with you to achieve the best possible outcome.

Related insights

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Australian business structures – choosing the right structure for your business

In this issue we examine the key types of business structures through which business can legally be conducted in Australia as follows: 1. Sole proprietors: individuals who are liable for the business. 2. Partnerships / limited partnerships: two or more persons or entities who are jointly and individually liable for the business (unless it is a limited partnership in which case the limited partner can enjoy limited liability). 3. Joint ventures: contractual arrangements between two or more persons entities usually for a limited time or specific project whereby the rights and obligations are governed primarily by the contract. 4. Companies: separate legal entities which basically have the same rights as natural persons and which can provide limited liability to their owners (i.e. shareholders). This can also include startups. 5. Trusts: a person or entity that holds assets or income for the benefit of others. Sole proprietors: Sole proprietors or sole traders conduct business as individuals i.e. in their personal capacity. Sole proprietorship is the simplest business structure, but provides no protection to the sole proprietor from debts or other liabilities. A different trading name for the business is often used (formally referred to as a “business name”). If so, the name must be registered in the name of the individual with the Australian Securities and Investments Commission (ASIC). Please refer to the business names section at the end of this paper which applies to all persons and entities wishing to trade under a different name to their own name for additional information. Aside from the usual laws which regulate all businesses in Australia, there are significantly fewer regulatory requirements imposed upon sole proprietors in comparison with other business structures. There is for example no need to publish financial information. Business income is declared separately to the Australian Taxation Office (ATO) but is taxed at the same rate as individual Australian residents for tax purposes. There is a tax free threshold available for individuals of $18,200. The rates of tax for income above $18,200 are as follows: $18,201 – $37,000 = 19% $37,001 – $87,000 = 32.5% $87,001 – $180,000 = 37% $180,001 + = 45% Tax offsets, levies, and deductions may apply depending on individual circumstances. Specific financial / tax advice should be sought from an accountant. Partnerships: A partnership is a relationship between two or more individuals or companies who carry on business in common with a view to profit. The relationship is primarily governed by a written partnership agreement entered into between the partners, as well as the Partnership Acts in each state and territory. Partners (other than limited partners discussed below) are jointly and severally liable for liabilities of the partnership. They also share the profits. As is the case with sole proprietors, there is no need to publish financial information relating to the partnership. The partnership does not pay tax on its income; it is the individual partners who must declare their individual share of the partnership’s net income or loss. The partnership must however lodge a partnership return with the ATO declaring total income less deductible expenses. Individual partners also account for capital gains tax in proportion to their share of each CGT asset, not the partnership itself. Limited partnerships are a species of partnership which need to be registered involving at least one general partner and one limited partner. Limited partners have different rights and obligations and liability is limited to an extent. Limited Partnerships are generally taxed in the same manner as companies. Joint ventures: Joint ventures are essentially contractual arrangements whereby two or more individuals or companies enter into a negotiated agreement to work together to achieve specific goals, usually for a finite amount of time, or the agreement is otherwise terminated. Joint ventures are typically used for specific projects, and are not usually appropriate for ongoing business commitments. Joint ventures are commonly established where each party has different assets / resources which, when combined, can provide advantages / synergies / efficiencies to all parties. The rights of each party primarily depend on the contractual terms of the relevant joint venture agreement that has been negotiated between them. Joint ventures can be incorporated (e.g. where the parties establish a new company as the vehicle for the joint venture), or unincorporated. The tax implications for joint ventures depend upon the parameters of the arrangement. Australian Companies: A company incorporated under the Corporations Act 2001 (Cth) (Corporations Act) is a separate legal entity and has the same rights as a natural person. The company must be registered with ASIC, and ASIC administers the Corporations Act and regulates companies. Australian companies typically provide limited liability for their owners (i.e. shareholders). The directors are responsible for the day to day management of the company. There are numerous obligations and reporting requirements prescribed under the Corporations Act. Companies can either be private (known as proprietary companies) or public (the capital of which is raised from the public e.g. those listed on the Australian Stock Exchange). The different types of company are as follows: company limited by guarantee: liability is limited to a guaranteed amount. This is often used by entities that do not trade. company limited by shares: liability is limited to the relevant amount which is unpaid for the shares held by the particular shareholder unlimited company: liability is unlimited. no liability company: only available to mining companies. The unpaid amount for shares cannot be called upon. The most common type of company is a company limited by shares. There are different requirements depending on the size of the company. Small business entities pay tax at a rate of 28.5% otherwise most companies pay tax at a rate of 30%. Foreign Companies: Companies that are incorporated in countries other than Australia must register with ASIC if they wish to carry on business in Australia. Trusts: Trusts can carry on business in Australia. The trustee owns and manages the business for the beneficiaries of the trust. Generally, the beneficiaries pay tax on their share of the

Unfair Contract Term Protections for Small Businesses

BACKGROUND Following public consultation processes, new laws[1] came into force on 12 November 2016 which extended existing consumer protection laws against unfair contract terms to “small business contracts” (e.g. business to business contracts). Under these laws, small businesses can also have an “unfair” term in a “standard form contract” declared as void in specified circumstances. In doing so they would not have to comply with the term. Findings identified in the Explanatory Memorandum to the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Bill 2015 suggest that, like consumers, small businesses are vulnerable to the inclusion of unfair terms in standard form contracts as they often lack: the resources to identify unfair terms, appreciate their significance and determine whether they can manage the associated risks; the resources to engage in negotiations over the terms of a contract; the bargaining power to successfully negotiate the terms of a contract; and/or the resources and bargaining power to resist the enforcement of unfair contract terms. The stated objective of this reform[2] is to promote fairness in contractual dealings with small businesses with regard to standard form contracts. This will reduce small business detriment and have positive impacts on the broader economy by increasing small business certainty and confidence, and providing for a more efficient allocation of risk. WHEN DOES PROTECTION TO CONSUMERS / SMALL BUSINESSES APPLY The unfair contract terms protection provisions are contained in ss23 – 28 of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law). Section 23 provides that a term of a “consumer contract” and “small business contract” is void if the term is “unfair” and the contract is a “standard form contract”. We do not examine consumer contracts which were protected prior to the amendments but examine the concepts of “small business contracts”, “standard form contracts” and when terms will be considered to be “unfair”. Small business contract In summary, in order for the contract to be a small business contract, each of the following must apply: The contract must be for the supply of goods or services or a sale or grant of an interest in land; At least one of the parties to the contract is a business that employs less than 20 people[3]; and The upfront price[4] payable under the contract is $300,000 or less, or the contract is for a duration of more than 12 months and the upfront price is $1,000,000 or less. Standard form contracts Standard form contracts are everywhere for example IT services contracts, advertising services contracts, mobile phone contracts, licences of office space, gym memberships etc. They are an efficient and effective way for businesses to contract. The Court will take into account any facts that it considers to be relevant however at the time of writing it “must” take into account the following in determining whether a contract is a standard form contract: whether one of the parties has all or most of the bargaining power relating to the transaction; whether the contract was prepared by one party before any discussion relating to the transaction occurred between the parties; whether another party was, in effect, required either to accept or reject the terms of the contract (other than certain excluded terms discussed below)in the form in which they were presented; whether another party was given an effective opportunity to negotiate the terms (other than certain excluded terms discussed below); and whether the terms of the contract (other than certain excluded terms discussed below) take into account the specific characteristics of another party or the particular transaction. Excluded terms: the protection does not extend to terms to the extent that they define the main subject matter of the contract, set the upfront price payable under the contract, or are terms required by law. Excluded contracts: the protection does not extend to contracts which are individually negotiated, or to certain types of contracts such as contracts of marine salvage or towage, a charterparty of a ship, and contracts for the carriage of goods by ship, constitutions of companies or managed investment schemes or other kinds of bodies. After 12 November 2016: The contract needs to have been entered into, renewed or rolled over after 12 November 2016. The law also applies to amendments to contracts after 12 November 2016 but not to the terms which have not been amended. Unfair terms There is a three limb test to unfairness. A term will be “unfair” if: it would cause a significant imbalance to the parties’ rights and obligations arising under the contract; it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by them; and it would cause detriment to a party if it were to be applied or relied on. The Court “must” take into account the extent to which the term was transparent[5] and the contract as a whole. Make sure your print is not too fine! Some prescribed examples of the types of terms which may be unfair are as follows: a term that permits, or has the effect of permitting, one party (but not another party) to avoid or limit performance of the contract; a term that permits, or has the effect of permitting, one party (but not another party) to terminate the contract; a term that penalises, or has the effect of penalising, one party (but not another party) for a breach or termination of the contract; a term that permits, or has the effect of permitting, one party (but not another party) to vary the terms of the contract; a term that permits, or has the effect of permitting, one party (but not another party) to renew or not renew the contract; a term that permits, or has the effect of permitting, one party to vary the upfront price payable under the contract without the right of another party to terminate the contract; a term that permits, or has the effect of permitting, one party unilaterally to vary the characteristics of

Minimum Employment Terms and Conditions in Australia

Employers who wish to sponsor skilled employees from overseas are, in summary, required under the subclass 457 scheme to provide terms and conditions which are at least equivalent to those which an Australian citizen or permanent resident would achieve performing the same work at the same location. This is an ongoing requirement not least because it is a 457 sponsorship condition, and severe sanctions can result in non-compliance. Its primary purpose is to prevent the undercutting of the local Australian labour market, protect overseas employees from exploitation, and maintain integrity in the scheme. In Australia, the employment relationship is governed or affected by a number of different parameters, all of which are variable depending upon the circumstances: Applicable Federal, State and/or Territory legislation: These include the Fair Work Act 2009 (Cth). The Fair Work Act establishes the National Employment Standards. Industrial instruments: There are various awards and statutory agreements / enterprise agreements which may impact upon the minimum terms and conditions with which an employee must be provided (for example by amending or adding to the National Employment Standards, and setting minimum wages for particular occupations). Contract of employment: This is agreed between the employer and the employee. Terms are both express and implied into the contract: Express terms: These are usually the written terms and conditions of the employment contract but may include terms and conditions which have been agreed verbally and also provisions of internal employment policies and any other terms (if they have been incorporated into the contract by reference for example). Implied terms: Terms can be implied into the employment relationship through custom, and the common law also implies terms into every employment relationship. Importantly, the contractual terms cannot override or detract from legislation and so the contract needs to provide terms and conditions which are at least equivalent to the terms and conditions required by applicable law (referred to under points 1 and 2 above). It is therefore important to be mindful of the tasks and functions of the occupation in question (and any changes from time to time which may alter the nature of the role), and the minimum requirements which are prescribed by the law for that particular occupation. In addition, the obligation upon 457 visa employer sponsors is broader in the sense that market salary rate conditions (not merely the requirement to pay a minimum wage) are also relevant, and market salary rates may fluctuate from time to time.

Protecting your brand & trade mark registration

Before choosing your brand: We have previously discussed important considerations when choosing the name of your business. Before you decide upon your brand (which may consist of a letter, word, name, number, logo, aspect of packaging, shape, colour, sound or scent) and launch it (including before you register your domain name) a trade mark availability search should be conducted by a professional to determine whether there are any existing registered or unregistered rights which may exist in similar brands. Benefits of trade mark registration: The mere registration of your company name or business name with the Australian Securities and Investments Commission (ASIC) does not protect your brand identity, or provide registered trade mark rights in your brand. Registration with ASIC is a legal obligation. However, registration as a trade mark with the Australian Trade Marks Office can provide your business with: an exclusive statutory monopoly to use your registered brand identity in respect of the goods and/or services for which it is registered in Australia; an easy way to prevent cybersquatting (the registration of a domain name which incorporates your brand by others); much easier and cheaper enforcement of your rights in your brand if someone else infringes your rights, for example, by using a brand which is either substantially identical or deceptively similar to your brand in respect of the same or similar goods and/or services; and a registered “asset” which can be licensed, assigned, and monetised. Only registered trade marks can apply the ® symbol. This puts others on notice that your brand is registered, and that you are likely to prosecute infringement. Costs: Your brand is your identity. It is valuable property to which your goodwill and reputation are attached. People who infringe your brand may derive benefits from your hard work or diminish your brand’s value through their actions (e.g. by selling inferior goods or services). Registration as a trade mark is typically a fairly inexpensive exercise if your brand does not currently infringe the rights of others (please refer to our earlier article here for further information). Goods and services are divided into “classes”. It is possible to obtain protection with IP Australia in one class for $330. This is a drop in the ocean when compared to the potential costs to your business of non-registration. Registration lasts for 10 years and is renewable. We provide trade mark registration advice and assistance at cost effective fixed fee rates.