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The ACCC & Negative Online Reviews

A representative of the Australian Competition and Consumer Commission (ACCC) recently noted that consumers engage with online reviews to make decisions on whether to purchase a product or use a service (‘Wisdom to remove unfair contract terms’, ACCC Media Release 104/18, (located at: https://www.accc.gov.au/media-release/wisdom-to-remove-unfair-contract-terms)).

Two recent ACCC actions indicate that attempts by businesses to control online reviews may not go unnoticed.

Attempting to Control the Opportunity to Provide Online Reviews

In ACCC v Meriton Property Services Pty Ltd, Meriton Property Pty Ltd (Meriton) was held by the Federal Court of Australia to have engaged in misleading conduct and misleading conduct in relation to the nature or suitability for purpose of services due to the practices undertaken by Meriton in relation to TripAdvisor online reviews through its use of TripAdvisor’s Review Express.

The Review Express service enabled Meriton to send the email address of guests who stayed at Meriton properties to TripAdvisor. TripAdvisor would then send invitations to the Meriton’s guests to complete a TripAdvisor review. The conduct Meriton engaged in to inhibit the completion of negative online reviews were as follows:

  • the withholding of guest emails from TripAdvisor if there was a major disruption at a property; and
  • putting the letters ‘msa’ in the email address of guests who made a complaint or were considered to be unlikely to give a positive review so that the email sent by TripAdvisor to that guest would not be delivered.

This conduct prevented guests likely to provide a negative review from making that review. The Court considered that the practices engaged in by Meriton had the result of generating the impression that the quality of Meriton properties was more ...

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I’ve received an unfair preference claim, now what?

So, you’ve recently received payment from one of your customers for goods or services provided by your business, only to receive a letter from a liquidator demanding you to pay it back on the basis it was a ‘preferential’ or ‘unfair preference’ payment?

You may be wondering how you respond to the demand, and most importantly, will you have to pay the money back.

What is an unfair preference payment?

An unfair preference payment occurs in circumstances where a debtor company (or person) makes a payment to a creditor in satisfaction of a debt, shortly before that debtor company is placed into liquidation.

Section 588FA(1) of the Corporations Act 2001 (Cth) (the Act) sets out the elements that must be established in order to satisfy an unfair preference claim:

  1. The company and a creditor are parties to the transaction (even if someone else is also a party); and
  2. The transaction results in the creditor receiving from the company, more than they would have received had the transaction been set aside and the creditor were to prove for the debt in a winding up of the company.

If proven, a liquidator will have a claim to void the transaction and reclaim the payment.

What is the relevant period for an unfair preference claim?

An unfair preference payment can include all payments made from a company to a creditor in a 6-month period prior to the company being placed into liquidation. This is known as the “relation back period”.

For example, if a liquidator is appointed to a company on 25 August 2016, then the liquidator may seek to void all payments made to the company dating back to 25 February 2016.

Defences

Before making payment of the amount set out in the liquidator’s demand, it is critical to assess whether or not your circumstances may give rise to a defence to the unfair preference ...

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Unfair contract terms for small businesses: ACCC v JJ Richards

This time last year, the protections against unfair contract terms were extended under the Australian Consumer Law (ACL) to include standard form contracts involving small businesses.

A ‘standard form contract’ is generally a pre-prepared contract which offers the same or similar terms to all consumers, and is often utilised by larger businesses to improve efficiency.

In conjunction with the new laws surrounding standard form contracts, the ACCC has ramped up its efforts to investigate businesses relying upon unfair contract terms. This recently culminated in the commencement of proceedings against JJ Richards & Sons Pty Ltd (JJ Richards), in which the ACCC sought to enforce the extended provisions. In the proceedings, the ACCC alleged that many of JJ Richards’ clauses:

  • created a “significant imbalance” in the rights and obligations of JJ Richards and small businesses;
  • were not reasonably necessary to protect JJ Richards’ legitimate interests; and
  • would, if relied upon, cause significant financial detriment to small businesses.

The Federal Court of Australia recently delivered its judgment[1] and found that, of the eighteen terms contained within JJ Richards’ standard form contracts, the following eight terms were “unfair” and subsequently declared void:

1. Automatic renewal: this clause bound customers to subsequent contracts unless they called the contract within 30 days before the end of the term.

2. Price variation: allowing JJ Richards to unilaterally increase its prices.

3. Agreed Terms: removing any liability for JJ Richards where its performance is “prevented or hindered in any way”.

4. No credit without notification: allowing JJ Richards to charge customers for services not rendered for reasons that are beyond the customer’s control.

5. Exclusivity: granting JJ ...

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Business Lawyer Brisbane with Rouse Lawyers

Selling A Business in Queensland - What your Brisbane Business Lawyer Does

When selling your business there are many legal factors to consider, and if you are considering selling your business you should seek advice and guidance from a business lawyer well in advance. A Brisbane based business lawyer will have intimate knowledge of how businesses are valued, and the skillset and expertise to prepare the necessary documentation. Doing these things will help ensure you receive the best possible outcome from the transaction. Skipping this step or trying to negotiate a business contract yourself, without the assistance of a business lawyer, may see your contract fall over, or see you having to deal with unexpected and unwanted problems.

Do I need a business lawyer?

There are many advantages a business lawyer can bring to the table that can assist with the sale of your business. An experienced business lawyer can protect your best interests by providing efficient, strategic advice throughout the entire process.
There are a few key steps involved in selling a business that requires professional advice.

Document preparation

A business lawyer acting on your behalf can provide advice regarding how to structure the sale of your business, and prepare the necessary documentation to ensure that the transaction gives effect to your best interests. It is critical that the terms and conditions of the sale of your Queensland business are set out clearly. A Brisbane business lawyer will be familiar with the overall processes involved in buying and selling local businesses, providing you with confidence that all of the paperwork will be prepared to ensure that the transaction proceeds smoothly.

Transfer duty & taxes

When selling a business in Queensland there are often transfer duty consequences, and knowing the ins and outs of what’s involved calls for an experienced business lawyer. ...

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If you’re gonna say it, you better mean it!

Image Via news.com.au

Janine Allis, founder of Boost Juice and Retail Zoo, delivered a punch to two gym owners and Shark Tank hopefuls this week. The guys were pitching a food product to the Sharks, and the packaging revealed it was ‘engineered to accelerate muscle growth and increase energy levels’.

When asked whether they had completed any clinical trials, or had any proof that their food product actually did what the packaging said, the answer was no.

‘Misleading!’, was Allis’ response.

‘At the moment, you’re making health claims that aren’t proven which means it’s against the law. I would seriously think about repackaging because there’s a number of things on here that are simply against the food standards codes. You need to get good legal advice...’

The Australian Consumer Law (the ACL) is pretty clear on what product packaging can’t say: packaging with statements that are incorrect, or likely to create a false impression, are not allowed.

The proof is in the prosecutions:

-       Nurofen maker, Reckitt Benckiser, was fined $1.7M for breaching the ACL with its ‘specific pain range’, where all products contained the same active ingredient, and did the same thing

-       Arnott’s was fined by the ACCC for claims on its ‘Light & Crispy’ packaging for adopting a false comparator to inflate a health claim

-       When Heinz’s US parent company acquired Australian product Golden Circle, Golden Circle packaging continued to represent that Golden Circle products were Australian owned. Heinz gave undertakings to the ACCC, and also donated more than 800,000 affected cans of fruit and vegetables to Australian welfare agencies

-       Goodman Fielder, maker of non-dairy spread Logicol, engaged in misleading or deceptive conduct claiming on ...

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“NO REFUNDS” CLAUSES UNFAIR

Businesses must take care to ensure that standard form contracts, such as terms and conditions or terms of trade, are not considered ‘unfair’ pursuant to the Australian Consumer Law (ACL).

The case of Ferme v Kimberley Discovery Cruises Pty Ltd involved a cruise ship operator and a category 4 tropical cyclone.

Shortly before the cruise was to depart, the cyclone struck and the operator was forced to cancel. It then attempted to enforce the following term in its standard form contract to avoid refunding the affected passengers:

The carrier will endeavour to follow the Cruise itinerary as described in the brochure and the passenger accepts that the carrier has the right to vary the itinerary or cancel the Cruise if the carrier considers that this is necessary as a result of some Unexpected Event or prevailing inclement weather conditions and the passenger accepts that the passenger will not be entitled to any compensation or a refund of the dare paid should this occur except as provided for in these terms and conditions.

Fortunately for the passengers, they were able to claim for the cancellation under their travel insurance. The insurers then exercised their right to recover against the cruise ship operator and brought an action on the passengers’ behalf.

The insurers argued that the clause refusing the refund was unfair, and relied upon the ACL. The ACL provides that a term in a standard form consumer contract is unfair if:

  1. it would cause a significant imbalance in the parties’ rights and obligations arising under a contract;
  2. it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
  3. it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

The insurer was successful in its claim against the cruise operator, establishing that there was a standard ...

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DOING THESE 3 THINGS WILL REDUCE YOUR LEGAL FEES

1.    Come prepared
Ideally, before a meeting, you will have discussed with your solicitor what you might need to bring. In addition to this, you should have in your mind a clear idea of the things that need to be addressed. For example, if your meeting is to discuss a dispute:

  • Prepare a timeline of the relevant facts and email it to your solicitor before the meeting
  • Bring with you any documents that might be relevant (such as contracts and emails)

Coming prepared with this information will mean less time after the meeting requesting information, and will avoid delay in progressing your matter.
2.    Be available & responsive
Countless calls and emails for instructions result in delay and increased costs. Regularly check your email and be available via phone (or arrange phone calls in advance to avoid phone tag).

Being thorough in your instructions and providing documents when they are requested quickly will mean your solicitor can focus their time on what is important – progressing your matter.
3.    Share the load
Organising hundreds of emails into chronological order and placing them into a folder does not necessarily require a lawyer’s set of skills. If you have the time or can delegate the job within your organisation, providing large volumes of material in an organised and logical manner will mean you are not paying someone else to do it for you.

Contact the team at Rouse Lawyers to discuss your legal needs today. ...

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Let’s NOT ‘shake on it’

The handshake has existed in some form or another for thousands of years – popular theory is the gesture began as a way of conveying peaceful intentions and demonstrating the hand holds no weapon.

For many people, a handshake now means, ‘we have a deal’.

The problem with a handshake deal is, even if everyone has good intentions, there’s no way to ensure all parties are on the same page. Often when handshake deals go wrong, it has nothing to do with trust, but rather human error. We tend to remember the gist of a conversation along with the details our brain picks and chooses, and when there’s an oral agreement it’s far less likely that everyone has turned their minds to:

1.    the finer details that push the deal along; and

2.    what happens if something goes wrong or a party can’t perform their end of the bargain.

It is certainly possible to rely upon the terms of an oral agreement, but ultimately it will be a case of he said/she said, and a dispute over an oral agreement becomes far more involved than just considering the words that were spoken.

Commercial deals should always be documented in writing, preferably by a lawyer. It isn’t sceptical to have a lawyer prepare a commercial agreement, it’s a prudent way to manage risk, so the deal struck turns out the way everyone intended (or to provide a remedy if it doesn’t).

Of course, written agreements aren’t always foolproof. Agreements can change over time out of necessity, and by virtue of the parties’ conduct. A simple solution to this is to revisit the original written agreement and amend it to reflect the new course the deal has taken.
Takeaways
1.    Oral agreements can be binding, but they are not worth the risk.

2.    Shake hands, then put the deal in writing before you do anything else.

3.    If the deal changes, amend the written agreement to reflect the change.

If you need assistance with your written agreement, contact the Corporate & Commercial Team at Continue Reading

ARE YOUR TERMS & CONDITIONS WORKING FOR YOU?

The first line of defence against debtors is a strong set of terms and conditions.

Simply put, if you don’t have great terms and conditions, you are putting your business at risk. When terms are not clear, misunderstandings can arise, and clients go back on their word.

It is crucial for every business to use terms and conditions that:

1.    are enforceable (and current); and

2.    protect your business, and it’s cash flow to the fullest extent possible.

Great terms and conditions will include things like:

1.    personal guarantees from directors (if you are doing business with a corporate entity);

2.    a retention of title clause (so you own what you’re supplying until you’ve been paid for it);

3.    the ability to file a caveat over personal property to secure payment of a debt.

Why not just repurpose terms and conditions from a competitor? For the same reasons, you wouldn’t sit down to finish a burger left by a stranger in a restaurant. The burger wasn’t made for you, it was made for the person before you, to their specifications, and there’s no telling what nasty surprises you’ll get later.
TAKEAWAYS
1.    Regularly revisit your terms and conditions – can you rely on them to ensure you’re paid on time?

2.    Don’t repurpose or revamp other terms and conditions you come across – one size does not fit all.

Send us your terms and conditions – if they are already great, we’ll tell you so. If they could use some work, we provide fixed-fee cost-effective options to ensure your terms and conditions are working for you.
Contact the Corporate & Commercial Team at Rouse Lawyers today. ...

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Privacy Awareness Week

Each year, the Office of the Australian Information Commissioner (OAIC) holds a week of events to promote privacy and encourage best practices by companies and organisations on how they can keep your personal information safe.  Each year has a different theme: This year, the focus of the week is “trust and transparency”.

“This Privacy Awareness Week (PAW) we explore privacy through the theme Trust and Transparency. This speaks to the consumer and community trust that flows to organisations who handle personal information transparently, and with care, throughout the information life cycle.

Personal data can travel through numerous transactions, media and organisations — but it’s always personal — so it’s important that we take care at every step.”

– Timothy Pilgrim, Australian Information Privacy Commissioner

This year, Rouse Lawyers is a proud partner of the Privacy Awareness Week and we are encouraging you to take some time this week to think about how you implement trust and transparency within your organisation.
Achieving Trust and Transparency
Achieving trust and transparency with your staff and customers may seem daunting at first, but by following and implementing a few simple steps, you can be on a path towards achieving this goal.

Implementing a clear Privacy Policy, making that policy easily available on your website and holding regular staff training to encourage positive behaviours towards privacy processes are all examples of ways you can create an environment of trust and transparency.

If you are unsure where to get started, the OIAC website publishes many helpful guides to assist you in being compliant with your privacy obligations (or if you wish to have a more in-depth conversation contact us to discuss any privacy related matter).  One such guide is the Privacy Management Plan; implementing a plan is an excellent way to keep you focussed on creating ...

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