What is a retention of title (ROT) clause?

In commercial transactions involving the sale of goods, including intellectual property (IP), a seller should consider protecting themselves against the risk that a buyer may default on payment.  In Queensland, one such protection method is provided by section 22 of the Sale of Goods Act 1896 (Qld) (SGA), which states that a seller may reserve the right to transfer title to the property.  At common law, such a clause is known as a Romalpa clause after the case of Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 2 All ER 552 (Romalpa case). [Read more…]

Term Sheets and Share Subscription Agreements

A share subscription agreement (Share Subscription Agreement) is a promise by a company with existing shareholders (Company), to issue and allot a number of shares at a certain price to a subscriber (Subscriber), in return for the Subscriber promising to advance funds to the Company in an agreed number of “tranches”.

A term sheet (Term Sheet) is a document that sets out the commercial terms and conditions under which a Share Subscription Agreement will be entered into.  A Term Sheet is generally not intended to create legal relations between the parties, but rather to form the basis of further discussions, which may be exclusive for a period of time and on a strictly confidential basis. [Read more…]

What is an Incorporated Joint Venture?

An incorporated joint venture, also commonly referred to as a corporate joint venture, an equity joint venture or a joint venture company (Incorporated Joint Venture) is a type of joint venture where the participants (Joint Venturers) arrange for the incorporation of a separate legal entity to pursue an agreed business objective.  The Incorporated Joint Venture may acquire assets of the Joint Venturers in exchange for the issuance of securities. [Read more…]

Federal Court rules on unfair contract terms

The recent decision of the Federal Court of Australia in Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd [2017] FCA 1224 serves as a reminder to businesses that use standard form contracts to carefully review their terms.

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Managing pre-contractual representations in franchising

The activities of franchisors and franchisees are strongly regulated by Franchising Code of Conduct.  However, the recent decision in Guirguis Pty Ltd & Ors v Michel’s Patisserie System Pty Ltd & Ors [2016] QDC 117 (Guirguis case) serves as a reminder of why franchisors should also take care in managing their pre-contractual representations to potential franchisees. [Read more…]

ASIC v Macdonald – have the lessons been forgotten?

The case of Australian Securities and Investments Commission v Macdonald (No 11) [2009] NSWSC 287 (ASIC v Macdonald) decided in the New South Wales Supreme Court, highlights the importance of strict adherence to the requirements of the Corporations Act 2001 (Cth) (Act) when preparing minutes of Directors’ meetings (Board Meetings) for them to be relied upon as evidence in a proceeding. [Read more…]

The Crowd-sourced Funding Bill 2016

On 28 March 2017 the Corporations Amendment (Crowd-sourced Funding) Bill 2016 (Cth) (2016 Bill) received Royal Assent.  Commencing 28 September 2017, the 2016 Bill will amend the Corporations Act 2001 (Cth) (Corps Act) and the Australian Securities and Investment Commission Act 2001 (Cth) (ASIC Act) to introduce a regulatory framework for Crowd Sourced Funding (CSF), also known as Crowdsourcing or Crowdfunding for unlisted public companies.  The 2016 Bill builds upon the CSF framework introduced by the Corporations Amendment (Crowd-sourced Funding) Bill 2015 (Cth) (2015 Bill). [Read more…]

The legal obligation for Australian businesses to provide refunds

In Australia, the main piece of legislation governing the supply of goods and services is the Competition and Consumer Act 2010 (Cth) (CCA), which incorporates the Australian Consumer Law (ACL) in Schedule 2.  These obligations apply in addition to the terms and conditions by which a business trades.  The CCA regulates the interaction between businesses and consumers and also between businesses.  How the CCA applies to any particular transaction will depend on whether goods or services are supplied to a consumer.[1]  The effect of a transaction being classed as a consumer transaction is that the consumer guarantee provisions in the CCA will apply. [Read more…]

Are legal expenses tax deductible for a start-up?

From 1 July 2015, a newly incorporated company, trust or partnership can immediately deduct a range of professional expenses associated with starting a new business, such as professional, legal and accounting advice.  This change was introduced by the Tax Laws Amendment (Small Business Measures No. 3) Act 2015 (Cth) which amended the Income Tax Assessment Act 1997 (Cth) (ITAA97) and received Royal Assent on 26 August 2015. [Read more…]

Software licences held to be “goods” under ACL

Software licences have been held to be “goods” under the Australian Consumer Law (ACL) by the Federal Court of Australia in Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196.  The case also clarified the position of “choice of law” clauses and highlighted the difficulties of contracting out of ACL consumer guarantees. [Read more…]

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