COVID-19 and Signing Contracts

COVID-19 and Signing Contracts

COVID-19 and Signing Contracts

COVID-19 and Signing Contracts

 

Very few documents are legally required to have a ‘wet’ signature. That is a signature applied using pen and ink. 

Most business contracts you enter into don’t require a ‘wet’ signature and may not require a signature at all to be binding. Contracts are not formalised by a signature; a signature simply serves as good evidence that a person agreed to the contents of a contract. Some examples of documents that would normally need a wet signature are: 

  • Wills
  • powers of attorney
  • deeds
  • documents that need to be witnessed, verified or authenticated in some way
  • some court documents
  • some documents for lodgement with land titles offices
  • some governance documents, such as minutes of meetings of directors
  • some regulatory documents, depending on the regulator 

Since the introduction of electronic transactions legislation by the Australian federal government and most Australian state and territory governments around the year 2000, it has been possible to sign a lot of agreements electronically

Rules do apply. 

Broadly speaking, the requirements for using an electronic signature are:

  • you must be able to identify the person signing, either directly or through additional evidence
  • the person signing must agree to be bound by their signature
  • the method for identifying the signatory and his or her intention in the circumstances is reliable
  • all the parties agree to accept e-signatures, which agreement can be inferred by conduct 

Provided that all parties agree, a typewritten name can be used as a signature.  Consider that you may be one of many people in business who have a formal typewritten signature as a standard footer to your emails.

Case study

In Stellard’s case (Stellard Pty Ltd & anor v North Queensland Fuel Pty Ltd [2015] QSC 119) a signature was required because the transaction involved property. There requirement for a signature was in s.59 of the Queensland Property Law Act, which says “No action may be brought upon any contract for the sale… of land… unless the contract… or some memorandum or note of the contract, is in writing, and signed by the party to be charged…”

All exchanges relied upon were either via email, or by conversation. Stellard argued that they were entitled to rely on NQF’s acceptance of their offer to purchase, contained in an email, by virtue of the Queensland electronic transactions legislation. The Court decided that:

 

  • the parties agreed to accept electronic signatures through their conduct, being negotiation via email including stating the offer in the body of the email and receiving the acceptance in the body of an email
  • the identity of the person sending the email acceptance was found through evidence of conversations held earlier than the date of the email, and an admission of the sender that they were the person sending the email

What does that mean for you? 

Be aware of what you are negotiating and agreeing to by email. 

Signing documents during COVID-19 restrictions

After COVID-19 was declared a pandemic and Australian federal and state governments started enacting temporary legislation for greater flexibility, laws were introduced to change the way certain documents, which usually required a wet signature and a witness, could be signed using electronic means.

Changes are not consistent around Australia. Each state or territory has slightly different requirements and not every state or territory enacted relevant laws, so you do need to be conscious of the location of the person signing, and the applicable rules in that place, and when those rules will expire:

 

Legislation

Start Date

Expiry Date

Federal

Corporations (Coronavirus Economic Response) Determination (No. 3) 2020

5 May 2020

22 Mar 2021

ACT

COVID-19 Emergency Response Act 2020

14 May 2020

3 months after COVID emergency ends

NSW

Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020

25 Mar 2020

 

26 Mar 2021

NT

N/A

 

 

QLD

Justice Legislation (COVID-19 Emergency Response—Wills and Enduring Documents) Regulation 2020

15 May 2020

30 Apr 2021

SA

COVID-19 Emergency Response (Section 16) Regulations 2020

20 Apr 2020

6 Feb 2021

Tas

Notice under Section 17 of COVID-19 Disease Emergency (Miscellaneous Provisions) Act 2020

3 Apr 2020

 

Vic

COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020

25 Apr 2020

26 Apr 2021

WA

COVID-19 Response and Economic Recovery Omnibus Act 2020

12 Sept 2020

31 Dec 2021

*The above table mentions only the first applicable legislation, which is likely to have been amended by further legislation over time, resulting the expiry dates listed. Expiry dates are subject to change.

Signing of corporate documents under australian federal law during covid

Federal law covers signing for and on behalf of companies, as well as the holding of shareholder or member meetings electronically. The legislation was due to expire on 5 November 2020 but was extended.

The Corporations Act is specifically excluded from electronic transactions legislation, so you will normally require a wet signature of directors or secretaries who are signing a document in accordance with s.127 of that Act. The document can still be shared electronically, it just cannot be signed electronically.

Pursuant to s.127 you would usually require two directors, a company secretary and a director or a sole director and secretary to sign on behalf of a company. You usually require both people (if two are signing) to sign the same document on behalf of the company.

The temporary legislation allows for electronic application of signatures when signing for a company, which can occur on separate documents, provided that each document contains the entire contents of the document, and a method was applied to identify each person signing and their intent to be bound, and that method was reliable.

A document signed on behalf of a company another way can still be binding. Section 127 does not limit the ways in which a company can sign a document. 

Permanent changes to the Corporations Act have now been tabled before parliament for consideration in 2021 which would allow for electronic signatures and virtual meetings.

Nothing in the legislation appears to enable the electronic signing of minutes of meetings, whether of a board or shareholders.

Signing documents in the Australian Capital Territory (ACT) or New South Wales (NSW) during covid 

Measures were introduced to allow for the witnessing and attestation of documents including affidavits, Wills, powers of attorney and health directives. Witnessing can be done by audio visual link provided that:

  • both video and audio are active
  • the witness watches the signatory sign in real time
  • the witness confirms the signing was witnessed by signing the document or a copy of it
  • the witness is reasonably satisfied that the document signed and the document witnessed are the same
  • the witness includes a statement on the document about how the document was witnessed in accordance with the ACT legislation.

To demonstrate confirmation of witnessing the original signature, that can be done by signing a full copy of the document (counterpart) as soon as possible after witnessing the original or signing a scanned copy of the document signed by the original signatory.

signing documents in the northern territory (NT) during covid

Although the NT does have electronic transactions legislation, no specific amendments have been made to that legislation as a result of COVID. As a result, any documents that needed a wet signature in the NT before COVID restrictions started, still do.

signing documents in queensland (qld) during covid

Queensland appears to have adopted the most complicated provisions. In Queensland, the witnessing a Will, powers of attorney, affidavit or statutory declaration can be completed by audio visual link, provided that:

  • the person witnessing is an Australian legal practitioner, justice of the peace (JP) or commissioner of declarations, notary public or other person mentioned in the regulations
  • the witness completes a certificate that is kept with the document
  • the witness sees the person sign in real time
  • the person signing signs each page of the document
  • the witness is satisfied that the signing person is making the document freely and voluntarily

Confirmation of witnessing, in addition to the required certificate, can be done by signing each page of a counterpart or scanned copy of the document signed by the original signatory, as soon as possible.

There are additional variations for affidavits and statutory declarations.

Documents other than Wills and enduring powers of attorney can also be signed electronically provided the method used to identify the signatory and their intend to be bound is reliable, in the circumstances.

Deeds can be signed electronically without a witness provided that the document is clearly identified as a deed. This applies to both individuals and companies, and for companies, where a second director or secretary is to sign, they can sign a counterpart.

signing documents in South australia (SA) during covid 

While South Australia made amendments to make meetings by electronic means easier, rather than expanding the ability to apply electronic signatures to documents they simply expanded the categories of professional people documents could be sworn or attested in front of.

Witnessing documents by audio visual means is expressly excluded.

Some alterations were made for property related transactions in June 2020.

signing documents in Tasmania (TAS) during COVID

Rather than specifying document, in Tasmania the legislation is focused on actions taken. So where a document requires a physical actions such as the making, taking, receiving, swearing, signing or witnessing of a document, those actions can be completed electronically, or by audio visual link provided that:

  • the witness watches the signatory sign in real time
  • the witness attests to the signing by signing the document or a copy of it
  • the witness includes a statement on the document about how the document was witnessed in accordance with the Tasmanian legislation.

signing documents in Victoria (VIC) during COVID

Victoria expanded the categories of people who could take oaths and affidavits first, before then introducing broader measures for the use of electronic signatures. Timing is very important in Victoria. A witness must apply their signature on the same day as the person signing the document.

Witnessing is permitted by audio visual link provided that:

  • the witness watches the signatory sign in real time
  • the witness confirms the signing was witnessed by signing the document or a copy of it on the same day
  • the witness includes a statement on the document about how the document was witnessed in accordance with the Victorian regulation.

There are specific rules around attachments, counterparts and copies of documents that must be met to comply with Victorian requirements.

Under the Victorian Oaths Act a person can electronically write anything on a document, sign, initial or date it electronically under the COVID rules. There is also provision for Wills to be signed and witnessed by audio visual link, provided that the actions result in one document with all signatures and statements relevant to any signing by electronic means, and that all actions are taken on the same day.

signing documents in Western Australia (WA) during COVID

Witnessing can be done by audio visual link provided that:

  • both video and audio are active
  • the witness watches the signatory sign in real time
  • the witness is satisfied that the document signed and the document witnessed are the same
  • the witness signs the document or a copy of it
  • the witness includes a statement on the document about how the document was witnessed in accordance with s.23 of the WA legislation.

To demonstrate confirmation of witnessing the original signature, that can be done by signing a full copy of the document (counterpart) as soon as possible after witnessing the original or signing a scanned copy of the document signed by the original signatory.

Want more information?

Where documents do need to be signed in a particular way, or witnessed, to be enforceable, then it’s important you understand the requirements that apply in the place of the person signing if you want to be able to rely on those documents in the future. 

If you need help with deeds, agreements, Wills or powers of attorney and worry about what COVID rules apply, contact us. 

Event Release Forms: Everything Yours Should Include

Event Release Forms: Everything Yours Should Include

Event Release Forms: Everything Yours Should Include

event release forms: everything yours should include

As a small business owner, do you run events, co-host events, sponsor events or plan to run events to help propel your business forward faster?

The advantages of holding events are obvious. Not only will you be meeting new people and adding new prospects to your client list, but it is also a good opportunity for you to gain valuable insights and understand the market better. Events can be face-to-face or online or a combination of both.

Events come in many shapes and sizes – meetings, conferences, online classes, training sessions, networking sessions, product launches, fundraising events and many more. No matter what type of event it is, one thing that you should always consider having is an Event Release Form.

Essentially, an Event Release Form is a contract or agreement for participation in an event. Like all other contracts, its purpose is to protect your business interests and limit your liabilities, but also to protect the interests of your participants. Just like running a business, you do not want to expose yourself or your valuable clients to any unnecessary risks when running an event.

Hand-shake contracts are great in theory. If you have ever been in a situation where you believed everyone was on the same page and later found out that there was a miscommunication, then you probably understand the importance of having a written contract.

Setting the rules for participation just before the start of an event can remind everyone of their expectations and obligations.

WHAT is the purpose of an event release form?

The event release form is to:

  • introduce the purpose of the event, eg. education only
  • remind participants of what is excluded, eg. not providing legal advice
  • require participants to take responsibility for their own behaviour, mental and physical health during the event
  • make parents or guardians aware of their responsibility for any child they bring
  • alert participants to the fact that other products or services might be promoted for sale
  • refer to privacy obligations
  • cover your rules for recording of the event by you and your participants
  • limit your liability

when do you provide an event release form?

For a face-to-face event, you want participants to read and sign your form before they enter the event venue. 

For an online event, you want participants to check a box agreeing to your release before they can access the event online.

how long should you keep an event release form?

You should keep a copy of your event release forms for as long as your business operations suggest you may have a risk to the business arising from that event.  Generally speaking, financial claims are barred 6 years after becoming aware of a right to claim and personal injury claims are barred 3 years after becoming aware of a right to claim.  Many businesses keep documents for 7 years for accounting reporting purposes.

can you use an event release form for multiple events?

You should require participants to complete a new form each time they attend an event, even if the one participant attends a variety of events you have on offer. A multi-day event, where it is clearly still the one event, will not need a daily release form, or a release form for each session, just a release for the event itself.

do you need separate event release forms for children?

It is easier to create a release form that have room to name one or more children who have come with their parent or guardian, and which binds the parent or guardian in respect of each child. You don’t need to have separate forms.

what if a participant does not want to be filmed?

If a participant doesn’t want to be included in photos or videos, then consider allocating a part of the room that is not going to be filmed or photographed and ask that they sit in that area, explaining that seating elsewhere will be caught on film. For online participants, you can ask that they keep video turned off to avoid being captured or use technology to exclude them.

Postproduction editing tends to be complicated and expensive. Practical measures before filming make permissions easier to manage.

what if we want to restrict participants from recording the event?

Your terms and conditions before registering for the event should specify that recording will be prohibited, then the Event Release Form should also state that recording is prohibited and participants may be removed if caught, and an announcement should also be made at the beginning of the event. As an alternative, some event organisers are now arranging specific digital interactive activities during the event to encourage participants to share it live on social media or ask questions during the event. 

is the event release form the same as event terms and conditions?

Your Event Release Form is NOT the same as the terms and conditions your participant signed up to before they purchased or registered for your event. Event terms and conditions are more comprehensive and need to be provided before the point of purchase, and agreed to by the participant, to be binding.

Event terms and conditions will cover in detail the things like:

1. What are you offering, and what are you not providing? 

Introduce what the event is about and what services you will be providing. This is to help set clear expectations for participants and prevent any disputes from arising as a result of ‘unmet’ expectations.

If you are running a physical event, will you be providing venue or catering? If catering, is it limited to tea and coffee or a full buffet lunch? If you are running an online event, will you be providing preparatory or post event audio or visual materials such as videos or PowerPoint slides?

For example, if you are an online fitness trainer, depending on how you offer your courses, you may want to state that you will be engaging your participants in activities but will not be giving any dietary advice. You may also want to state that it is the participant’s responsibility to have a safe space and the appropriate equipment to hand to carry out any techniques to be demonstrated during the course.

2. payment terms

If you are charging a fee for people to attend your event, then your terms and conditions should include payment terms. Include any payment options you are offering, such as the ability to pay by instalments and what payments methods are available.

For example, you may want to provide the option to participants to pay in full by direct deposit to your nominated bank account before attending the event, rather than by credit card.

3. cancellation or refund policy 

Things do not always go as planned. In the middle of 2019 very few people would have predicted that face-to-face conferencing would be put on hold for most of 2020 due to COVID restrictions. Venues do occasionally burn down. Guest presenters do sometimes drop out due to personal reasons. You may end up having to postpone or even worse, cancel your event.

If you don’t want to give refunds, your terms and conditions need to be clear about what you will do if you have to postpone an event. As long as the postponement was outside your control and you remain ready, willing and able to give credit toward a future event, or ensuring a space is available in the next, or one of the next 3 scheduled events, your may not be legally obliged to give a refund.

But what if your participants are the ones that want to cancel or withdraw from your event?

You should set out clearly in what circumstances you participants’ cancellation would be a ‘valid’ cancellation, which would entitle them to a refund. Factors for you to consider include the reason for their cancellation (eg. change of mind, medical reasons) and how long before the event they notify you of their intention to cancel. You should also specify in what circumstances a refund will be made in full, when it will be made in part and whether an administration fee will be deducted.

Having a clear cancellation policy can deter participants from simply changing their mind about attending.

4. disclaimer

When you make a statement to the effect that you are not responsible for something, then you are making a disclaimer. Its purpose, of course, is also to protect you from potential disputes or legal issues.

If you do not want your participants to be under the impression that all information you provide will be accurate and therefore safe to rely on, then you need to say that. If expect your participants to take responsibility for their own health and wellbeing at your event, then that needs to be spelt out.

5. limitation of liability and indemnity

The last thing you want is to have someone bring a legal action against you for a loss they claim to have suffered by attending your event. A limitation of liability and indemnity clause is to protect you from being held responsible for losses or damages that were not caused as a result of your negligence.

6. intellectual property

The materials that you make available to your participants are likely to be your intellectual property and valuable assets of your business. It is important to correctly identify your intellectual property and draft effective clauses to protect it from being misused or exploited by your participants against your wishes.

7. personal information

You are collecting personal information from your participants when they register for your event or provide you with their contact details in any other way. To ensure that you are complying with your privacy obligations, you need to have a privacy policy and link that to your terms and conditions.

If you wish to take photos or videos of your participants during your event and later use that footage to market your business, you will also need your participants’ consent and release, because images can also be personal information.

Want more information?

If you plan to conduct online or offline events, consider what terms and conditions and release forms you need to protect you and your business. Contact Onyx Legal and we can work with you to prepare documents tailored to your business.

Disclaimers: What They Do and Don’t Protect You From

Disclaimers: What They Do and Don’t Protect You From

Disclaimers: What They Do and Don’t Protect You From

Disclaimers: What they do and don’t protect you from 

As a business owner, it is likely that you run a website, blog or social media to help people find you, advertise and promote your products or services. It is the most effective way of attracting potential customers or clients in this digital age.

When someone visits your website, you are offering them information of some sort. Are you always 100% certain that all the information on there are accurate and up to date?

Even if your answer is yes, do you know how your customers or competitors are using or interpreting that information? The best you can do is hope they are using it the way you intended, but really it is out of your control.

This is why having a disclaimer is always a good idea. It can better protect you and your business.

What is a disclaimer?

Almost all websites have disclaimers. You must have seen one before. Sometimes disclaimers are hidden in terms of use, and sometimes they have their own individual link in the footer, and sometimes they appear in every footer, whether that is on a website or email.

A disclaimer is a notice that you display to protect you from potential legal issues; it is a statement that you are not responsible for something. To give you an example, here is Wikipedia’s no guarantee disclaimer:

Wikipedia cannot guarantee the validity of the information found here. The content of any given article may recently have been changed, vandalized or altered by someone whose opinion does not correspond with the state of knowledge in the relevant fields.”

 

So, why is it important to have a disclaimer?

Well, consider the case where someone claims that they have relied on your information and suffered loss as a result. Let’s look at an example.

A marketer promotes pre-sales of a real estate development through a website. (A common cause of claims in court.)

The website has some images that are ‘artist’s impressions’ of what the development will look like when it’s finished and might contain other information like a copy of a survey diagram. It might also contain a list of finishes to be included in the final development.

Survey diagrams are really things you should check with a surveyor, engineer or other professional, rather than take from a marketing brochure, but that might also depend on who is providing the brochure and what expertise they say they have.

The website should clearly caution the buyer that the artist’s impressions might not be true to the end result and that a buyer should make their own enquiries to verify information before they decide to buy; like checking the inclusions in the contract with the builder. If there are no clear statements, it is possible that a buyer could claim they were misled by the information on the website and would not have bought otherwise. Then if the property turns out being something they don’t want or doesn’t have the value they expected it to have, they sue the marketer to try and recover their losses.

You do not want to put yourself in a situation like this, where your business reputation could be damaged, and you could be found liable to pay legal costs to defend yourself and possibly someone else’s losses.

Some other common examples we see are:

  • people who have a lived experience with a physical condition or disease, but no formal medical training
  • people who have successfully built a business without any formal qualifications
  • people who have successfully overcome an adversity and again, don’t have any formal qualifications

Out of a genuine desire to help others and share the benefit of their experience, a person like this might establish a business around coaching or educating others on how they achieved what they did.

The thing is, not everything works for everybody consistently, and there is a risk if you put yourself in this kind of position that you will encounter a person your services don’t work for, and they say the relied completely on what you said. In that situation, a disclaimer might just help you avoid costly court proceedings.

And for something completely different…

Now consider a completely different situation where your website makes it possible for other people to post comments, reviews or advertisements. Forum sites and advice sites like Quora are like this.  All the information posted by third parties could mislead your customers, clients, or visitors of your website, and you could be the one exposed to liabilities because of their actions.

By having a clear and comprehensive disclaimer for your websites, and building behaviour and processes consistent with the terms of your disclaimer, you put yourself in the best possible position to:

  • protect your rights;
  • limit your liability; and
  • disclaim third party liability.

 

Do you need a disclaimer?

Yes, and no.

Being in business involves a certain level of risk and some types of business are riskier than others, and some types of business people are happy with more risk than others.

We need to look at your business, your background, your products and your customers to form an opinion on how important it is for you to use disclaimers.

Generally speaking, we will suggest you do use a disclaimer on your website.

This is because any member of the public that has internet access can see the content on your website, and you are responsible for all the content you put on there. Even if you are not making money from these websites (for example, you might be posting a blog simply for informational purposes), you must still take reasonable steps to ensure that visitors of your website will not be misled by any information you share.

However, if your business is fairly straight-forward and well understood, like a barber or hairdresser for example, you probably don’t need a disclaimer. Everyone knows what barbers and hairdressers do. The worst that can happen is probably a bad haircut, or a bad colour, or a clumsy shave. The risk to the business is the cost of the service, and maybe the cost of fixing the problem, or the customer having someone else fix the problem. The problem probably won’t cost the business more than $300. So, will a disclaimer make any difference? Probably not.

On the other hand, coaching can be a really interesting area where you as a coach should be careful about what you say you can do for someone, particularly when results are going to be dependent on how much effort and application your client invests in doing what you have advised them to do.  If you are offering a high-end coaching package with a purchase price over $10,000, we would recommend a disclaimer.

If you run a website or email list that provides information which is likely to be relied on by visitors  to your website, or subscribers on your email list, you are strongly encouraged to have a disclaimer in place. Particularly if you provide specialised information, in areas such as health, managing money or an industry that is regulated.

If your website provides specific steps in a process or a guide for people to follow, you could also increase your legal risk.

An example might be if you are an online fitness trainer and you post videos that step your clients through a workout. If someone who watches and follows your video injures themself, then you run the risk that they sue you for their injury. But if you have a disclaimer in place which covers your legal obligations and placing some responsibility for your clients behaviour back on to them, you give yourself a much higher chance of avoiding liability.

 

What kind of disclaimer do you need?

You may run different types of websites, and the type of disclaimers you need will vary.

  • Websites

What disclaimer you need depends on whether you use your website to sell products or services, or merely to publish information. If you use your website to sell a product, someone could get hurt when using your product. Whereas if you post information on your website, someone could misconstrue that information and suffer loss as a result.

You might need a ‘no responsibility’ disclaimer which states that you are not responsible for any damages people suffer as a result of using your products or services. Or you might need a ‘views expressed’ disclaimer to inform readers that the information is only your view or opinion and is not intended to be relied upon without advice specific to their circumstances. 

  • Blog

If you intend on giving information on your blog which you are not qualified to give, you need to have a disclaimer to explain the limits of your qualifications and to recommend that people seek professional advice relevant to their circumstances.

If you are not a health professional but provide information about a health conditions, you need to make it very clear that readers should not rely on your information without seeking their own independent medical advice. The same applies for other types of expert advice including financial or legal advice.

If you are merely passing on information, you should indicate that it is work of another and that you are not endorsing it by making it available on your website. 

  • Emails

You may need a disclaimer in your emails, depending on the type of business you run and how you use your email. 

For instance, if you email contains advice that you are not qualified to give, you should include a disclaimer to the effect that you are not an expert in that field, that you are only offering a suggestion and that readers who act on the information do so at their own risk.

A confidentiality disclaimer can also be beneficial if you are sending confidential information. The disclaimer should state that the recipient must not use, reproduce, copy or disclose this information other than for the purposes for which it was supplied. 

  • Social media (eg. Facebook, LinkedIn, Instagram)

Again, this will depend on your business and how you use social media.

One of the biggest risks with social media is that third parties can comment, post, or advertise on your page. A disclaimer to limit your liability for any actions or errors of third parties will be of assistance if you are also monitoring your social media pages and removing posts or qualifying posts and comments that could be misleading.

 

How do you write a disclaimer for your website?

It is not possible to have a disclaimer that could work for all types of businesses or websites. Each disclaimer is different depending on what you do and how you do it. Like we said earlier, we need to look at your business, your background, your products and your customers to form an opinion on how important it is for you to use disclaimers.

To help you decide what you should include in your disclaimer:

Step 1 – Think about what rights you want to protect

Step 2 – Think about what liabilities you might be exposed to

You need to identify the possible risks and scenarios that could expose you to legal liability.

Consider:

  • Warning your readers that your content is merely an opinion and not a fact
  • Alerting your readers to the potential mistakes and inaccuracies in the information
  • Informing your readers that you are not offering professional advice and your content is only informational, and that they should consult a professional before making any decisions
  • Disclaiming liability for any errors in the information that third parties post on your websites (together with a process for reviewing the accuracy of information shared, or making it clear that older posts might not be accurate.

 

When are you not protected by a disclaimer?

If your disclaimer contains terms that attempt to exclude a legal liability that cannot be excluded, your disclaimer will not shield you from liability. If it is contrary to law, it might be void, but if it is legally compliant, it might still limit your potential liability.

Most people get in trouble when they say or do things that are inconsistent with their disclaimer.

Always keep in mind that your disclaimer must be consistent with your behaviour and business processes and any representations that you make, whether on your website or through your conduct. If anything on your website or your conduct creates a different impression for your customer or client, your disclaimer will not protect you.

Your disclaimer also needs to be placed somewhere where it can easily be seen either by customers using your website or receiving your emails or communications in any other way. If your disclaimer is too hard to find or too small that is can be easily missed, it will not protect you.

Conventional website design will usually have a link to your disclaimer in the footer of your website.

 

 

do you still need insurance when you have a disclaimer?

Yes.

Even if you have a disclaimer in place, you should still hold adequate liability insurance to protect business activities. Having a disclaimer does not mean you are guaranteed to be protected from all liabilities. If a claim is brought against you, it is up to the courts to determine the effect of your disclaimer and to what extent your liability is limited. The more vague or confusing your disclaimer is, the more unlikely that it will protect you.

 

 

Want more information?

 A well-drafted, quality disclaimer can help you to effectively manage your customer or clients’ expectations and set the boundaries for your responsibility and liability.

Contact Onyx Legal so that we can work with you to identify the most appropriate form of disclaimer for your business and your customer base. 

Privacy Policy: Collecting and Managing Personal Information

Privacy Policy: Collecting and Managing Personal Information

Privacy Policy: Collecting and Managing Personal Information

Privacy Policy: Collecting and managing personal information

As a business owner, how many times a day do people give you their personal information? Do you think about protecting it, or do you just assume that the systems you have in place will do that? 

Or maybe you don’t think about it at all. 

Does a small business need a privacy policy?

You must comply with Australian privacy laws unless you run a small business with $3 million or less annual turnover. However, you will still be bound by privacy law if your small business does any one of the following:

  • are a credit reporting body (e.g. Equifax, Illion) or
  • are a contracted service provider under a contract with the federal government; or
  • provide a health service or otherwise hold health information (e.g. health practitioners, life coaches, personal trainers, childcare centres); or
  • collect or disclose personal information for a benefit, service or advantage (e.g. operating a lead generation website where you sell the leads).

If you have any customers or suppliers overseas and you collect their personal information, you may now also have to comply with what are called ‘extra-territorial’ provisions of laws from overseas. For example, if you have customers in the European Union, you are required to comply with the General Data Protection Regulation (GDPR), regardless of the size of business. If you have a medium enterprise with customers in California, you now must consider the California Consumer Privacy Act (CCPA).

Some other countries with privacy laws that have an extraterritorial scope include New Zealand, Brazil, Thailand, the Philippines, and Canada.

 

From a practical perspective, can not having a privacy policy really make a difference?

Apart from the legal obligations, there are practical consequences of not having a privacy policy too.

If you want to advertise on social media, or through Google Ads or other platforms, you are required to provide a link to a privacy policy before your advertising can go live.

A lot of international service providers include in their terms and conditions that you must comply with privacy laws to use their services, and they have the right to end your ability to use their services if you don’t.

For example, if you use PayPal you agree with the following terms of the PayPal User Agreement:

You must comply with all your obligations under applicable Australian consumer law, including as a seller by publishing a refunds and returns policy as well as a privacy policy, where required by law.

… you must not: Infringe PayPal’s or any third party’s copyright, patent, trademark, trade secret or other intellectual property rights, or rights of publicity or privacy.

…To the extent that you (as a seller) process any personal data about a PayPal customer pursuant to this agreement, you agree to comply with the requirements of any applicable data protection laws. You have your own, independently determined privacy policy, notices and procedures for any such personal data that you hold as a data controller, including a record of your activities related to processing of personal data under this agreement.”

What difference would it make to your business if you couldn’t process payments through PayPal?

 

So, what is the point of a privacy policy?

One of your many obligations under Australian privacy laws is that every time you collect personal information from an individual, that person must be able to find out why you are collecting it, and what you are going to do with it.

Posting a privacy policy that you understand and know you can apply, on your website where it is easy to access, is by far the easiest way to share with people what you are doing with their personal information.

 

So, what is personal information?

Under the Privacy Act 1988, personal information means any information or opinion about an identified individual, or an individual who is reasonably identifiable:

  • whether the information or opinion is true or not; and
  • whether the information or opinion is recorded in a material form or not.

And what does that really mean?

Well, for a start, it doesn’t cover information about people who have died, which is interesting considering the legacy profiles some social media platforms are now making available for the families of the deceased, but that is not the topic for today.

It does cover information you collect about your employees and contractors. Many businesses only think about customer information and forget that you also have to protect the privacy of employees, contractors and suppliers.

But what about a practical example:

Imagine a gym where someone is leaving and their trainer turns to another trainer and says something like “She’s never going to lose weight, you should see her mum, she just has fat genes”.

The comment is verbal, it’s an opinion, it refers to a person who can be identified visually, and whose name and other details could be found by looking at the trainer’s schedule. That makes it personal information.

Is there a risk of violating privacy law – Yes. Is it likely to be a big risk to your business? – No. Why not? – Because it probably wasn’t recorded and is therefore difficult to prove, but if another patron overheard it, or the trainer repeated it to someone else, it does start a chain of infringement.

Imagine the same gym has list of all their trainers with their phone numbers on a clip board, and that clipboard gets left on the front reception desk, where anyone coming in could take a quick photo with their phone.

Is there a risk of violating privacy law – Yes. Is it likely to be a big risk to your business? – Possibly. Why? – Because once that information is recorded in a different form, like a photo, your business has disclosed personal information without permission.

Can you see why it is important to understand what you are doing in the process of collecting personal information?

 

When are you ‘collecting’ personal information?

You collect personal information in your business all of the time.

Any time you confirm someone’s name over the phone, whether or not you write it down.  Every time someone fills in a contact form on your website. Every time you add someone’s details to a database. Every time you prepare a proposal for someone or take payment details. Every testimonial. These are all examples of collecting personal information.

This is a broad concept.

It includes getting personal information from any source and by any means, such as the people themselves, social media profiles, other businesses, or even surveillance cameras. In practice, all personal information that you hold will generally be considered information that was collected by you.

Bear in mind that if you generate personal information from some other data you hold, collection may also take place. For example, if you generate a sub-set of information from your database for promotional purposes, you’re effectively collecting that information again. And the practical consequence? – Your privacy policy and procedures should be broad enough to include that kind of activity in what you do with personal information.

How should you manage personal information?

This is where a lot of people get lost and think that having a privacy policy by itself is a cure for all ills. It isn’t.

You are required to manage the personal information you collect in an open and transparent way. What this means is that you must take reasonable steps to establish and maintain internal practices, procedures and systems for your business to ensure its compliance with privacy laws.

Do you have any sort of privacy checklist for small business to help your team navigate what they can and can’t do with personal information? If not, that is a good place to start. What is considered as reasonable would depend on your business.

Think about what type of personal information your business holds, how much information you collect, how your customers might be affected if their personal information was not handled properly, the size of your business, and the time and cost involved in implementing appropriate procedures.

What you are required to do in Australia is comply with privacy law to a degree that is commercially proportionate to your business. So, if you run an online marketing agency with a team of four people, your procedures are not likely to be as complex as a business supplying services to the defence force.

Here are some examples what you could consider implementing:

  • understand what privacy obligations you have as a business;
  • work out when you collect personal information, and why (avoid collecting more than you need for your business);
  • work out what you will do if someone wants to be anonymous, and if you can still deliver products or services if you allow that;
  • work out where you store personal information, and how you use it (do you use a commercial database, or excel, or your phone contacts list?);
  • work out if you share personal information (eg. with a distributor or courier service);
  • decide whether the systems and procedures you use in your business protect, or put personal information at risk of being disclosed, lost or stolen (eg. leaving a mobile phone in an Uber);
  • check that you have faith in the online systems you use and there is limited risk of unintentional access by someone outside your business (eg. information on a white board visible when you are on Zoom, unintentional disclosure of a Google form);
  • work out what you will do if you get a complaint from a customer about the use of their personal information;
  • work out what you will do if someone asks you for a copy of their personal information, or a change to that personal information (eg. change of name or address);
  • include privacy training as part of your induction process for new staff; and
  • annually review and audit your business’s privacy practices, procedures and systems.

 

How do you write an effective privacy policy?

Your next step then is to write a clear and up-to-date Privacy Policy about how your business manages personal information, or get us to prepare it for you. At a minimum, it must contain the following:

  • the type of personal information that you collect and store (eg. contact details, educational qualifications);
  • how you collect and securely store personal information (eg. collect directly from your customer and their public social media accounts, then add to a CRM);
  • the purpose for collecting, keeping, using and disclosing personal information;
  • how your customers can access and correct any their personal information and who to contact in your business;
  • how your customers make a complaint about a breach of privacy laws, and what happens when they do; and
  • whether you are likely to disclose personal information to overseas recipients, and if yes, the likely countries.

Your Privacy Policy will be more comprehensive depending on the complexity of your business and should be tailored to match your internal systems and procedures. A well-written, easy-to-understand Privacy Policy can add to your credibility and help build rapport with your customers.

If your Privacy Policy is made available online, you can provide a condensed version to outline key information, but a direct link to the full policy must be provided.

 

What if you get it wrong?

Privacy law is regulated by the Office of the Australian Information Commissioner (OAIC). The Commissioner can require your business to put in place systems, procedures or training, pay compensation, or apply to the court for fines to be made against your business.

Compensation is usually ordered where information has been disclosed, or where a person has requested access to their information, and it hasn’t been provided in a timely manner.

 

Protect your customers and your business

Having the right systems and procedures in place with a clear and comprehensive Privacy Policy is your opportunity to reassure your customers that you can be trusted, that you are aware of and care about their privacy and information security. In doing so, you are not only complying with your legal obligations but are also working towards building a reputable business. 

10 Ways to Avoid a Joint Venture Fail

10 Ways to Avoid a Joint Venture Fail

10 Ways to Avoid a Joint Venture Fail

Joint Ventures are great for collaboration

Working together with another like minded entrepreneur is a clever way to accelerate business growth, which is why joint ventures remain a popular way for individuals or organisations to collaborate. But before you ‘Give it Away’ (as there’s always room for a Red Hot Chilli Peppers reference in a legal consideration blog), it’s critical to shore up your joint venture’s credentials to ensure a smooth, surprise-free partnership from beginning to end. In this Onyx Legal blog , we highlight 10 ways to avoid joint venture fails. [Ok, so we ended up with 11 – Ed.]

Joint Ventures are usually for a specific and limited project, goal or purpose and may also be limited by time.

1. Who is party to the joint venture?

Establishing a joint venture is no time to be carefree with the details.

Before entering into a joint venture, establish the legal identity of all parties. This means performing ABN and other similar regulatory checks. It might also mean checking driver’s licence details of individuals. 

A client recently came to us with a proposed joint venture, and we could not establish who would pay him the $400k that he expected to receive as his share of profits. The deal fell over when the other party also failed to establish who would pay that sum.

2. How Should You Structure a Joint Venture?

It is important to understand that joint ventures and partnerships are different structures.

A partnership is a long-term working proposition with full legal liability – a commitment to working together into the future.

A joint venture is project or purpose-focused, and facilitates separate parties to continue working on other businesses simultaneously. Joint ventures can be done by contract with each party paying their own tax, but one of the parties must hold the assets relating to that venture (paperwork, accounts, assets) unless it is established in its own identity.

3. What do you want to achieve with your joint venture? 

It’s easy to get caught up in the potential of success and innovation at the beginning of a joint venture, which is why understanding what you want to achieve from the collaboration is so valuable.

We’ve observed web designers, marketers and programmers enter joint ventures expecting to receive a share in profits at the end of the build, only to have ‘goal posts’ moved so regularly they exit the venture – leaving thousands of hours of unpaid labour in their wake.

Failing to understand – or formalise – expectations in a joint venture regularly leads to disappointment.

Put together a clear written agreement covering all the moving parts of your proposed joint venture, and allowing some flexibility for change as your venture grows. 

have a written Joint Venture agreement

Failing to understand – or formalise – expectations in a joint venture regularly leads to disappointment

4. How long should your joint venture last?

How long is a piece of string?

There’s no single answer to this question; the duration of your joint venture is based on the purpose of the project.

Will you be building something – a house or a piece of technology?

Are you going to be running a developing a piece of software or an education program together?

If you are building or developing something together the period of the joint venture might be the development period, and once you have a completed MVP (minimum viable product) you might roll it over into a company and start building a team to run it. 

Where you’re entering a revenue share deal, it might be a two year focused time frame for growing the base income of the business. 

Whilst you do not need to define a hard ‘end date’ to your joint venture in documentation, it’s useful for all parties to understand the purpose of the relationship, and a general timeline to completion of the project, and what completion looks like.

We regularly write in rolling successive terms, such as a one year agreement that rolls over for another year unless someone terminates before the end of the year. 

5. How can disagreements be dealt with or avoided? 

A joint venture agreement should be robust, providing options should parties fail to perform their role, or decide to walk away from the project.

In collaboration with your lawyer and with your project’s specific risks and opportunities in mind, carefully identify pressure points that require clarification and consider an approach to realistic exit should your working relationship end unexpectedly before the project is completed.

Good joint venture agreements remove the element of surprise from projects, leading to higher rates of completion and reduced conflict.

For a two party joint venture, it is a great idea to have some way of independently breaking deadlocked decisions. You could use a trusted third party as a referee, such as a mentor or board adviser. You could also allocated areas of decision making to each party that give one person a try breaking vote on those issues.

6. What if someone wants out if the joint venture early?

Build the possibility of a party leaving the joint venture into the structure of the joint venture to avoid future problems.

The best laid plans of mice and men often go awry, and a party may need to exit the joint venture for any number of reasons. Family life may be under pressure, there could be financial considerations, or health issues to address.

Fairness is key when devising a graceful exit from a joint venture. 

7. What if you want someone else to join in the venture part way through? 

Joint ventures can be created to allow for the possibility of other experts parties joining the project. Sales professionals are typically invited to join in after an MVP is achieved. 

It’s important that you’re working with a lawyer to structure your joint venture for all possible contingencies … which could  include growing your collaborative group.

8. Who will do what in your joint venture?

Formalising a joint venture is no time for pussyfooting around responsibilities or making assumptions about role workloads.

Success in your project relies on clear delegation of work, as all parties will have other responsibilities that could take their attention, in addition to the joint venture.

It’s important to know exactly who will be paying the bills and who will be responsible for particular milestones.

Having difficult conversations early on about the work or outcomes due for completion by exact parties of the venture will save plenty of strife when life gets busy or timelines become blown-out. 

9. What happens if someone fails to live up to their responsibilities in the joint venture?

As with any project, it’s possible that the whole thing could become scrambled eggs.

Of course you don’t anticipate that will be the outcome, but it’s prudent to plan for unlikely circumstances. Think about COVID-19, a virus which has changed the trajectory of the global economy in the space of months. It was nigh on impossible to imagine the world shutting down a year before the corona virus; but there it is.

People can fail to live up to the responsibilities in a joint venture for a variety of reasons, including circumstances beyond their control.

Build into your joint venture contingencies around ‘failure to perform’ and decide what the dissolution of the relationship should look like. Who gets what? What will trigger the dissolution? How will any debts be paid?

These are important matters to discuss with your collaborative partners and your lawyer.

10. Who retains any intellectual property created during the venture, once it ends?  

Often a complex matter to consider, the ownership of intellectual property is the cause of many disagreements.

If the joint venture does fail, there is likely to be an argument about intellectual property and who owns what. If you can work out IP ownership at the commencement of your joint venture, you’ll design a logical way of dealing with the matter if you fall out.

Maybe each party only walks away with what they contributed; maybe each party walks away with one complete copy of the created intellectual property.

Certainty around what will happen at the time of the exit gives everyone confidence and reduces the risk of legal action. 

11. How will the project be managed?

A joint venture teaches entrepreneurs a whole lot about project management and communication. There are many moving pieces you and your partners will need to consider:

  • planning
  • stakeholder relationships
  • reporting
  • regular meetings and agendas
  • cashflow 

While it is appropriate for different roles to be attributed, a single party needs to be appointed to ensure accountability across the whole of the joint venture. You will need someone with the energy and drive to ensure that things happen. 

Flexibility must be built into this role, and an allowance to break ‘deadlocks’ in decision making.

Many’s the time we have observed joint ventures fall apart when the directors of the governing entity failed to design a mechanism for change, independent of the warring parties. 

Joint ventures are a terrific way for business owners to collaborate, to stretch their skills, test ideas, and to innovate. A well-designed joint venture allows for the clear division of work and responsibility, provides safeguards for failure and disappointment, and deals with the sticky stuff of business relationships before they become complex.

At Onyx Legal we support business owners to come together with like-minded partners in joint ventures, creating structures that respond to your unique projects, packed with safeguards to keep you as confident and safe as possible.

Our key takeaway for joint ventures?

Think on it.

Clarity at the beginning of a project leads to better results in a joint venture, and the chance everyone will meet or exceed their expectations. 

How can Onyx Legal help you?

Joint ventures have a contractual foundation.
You can form a joint venture with a handshake, or you can put a little thought into your expectations and negotiate an agreement that clearly sets out each party’s rights and obligations, as well as exit opportunities. We also highly recommend incorporating sensible dispute resolution mechanisms that will support the joint venture moving forward. If you are already in a joint venture, we can review the contract and clarify any legal rights and obligations you don’t understand.

Joint Venture Advantages and Disadvantages

Joint Venture Advantages and Disadvantages

Joint Venture Advantages and Disadvantages

What is a Joint Venture?

Possibly your first question will be “What is a joint venture?” and then possibly “How is that different from a partnership?”. And yes, it is commonly referred to as a “JV”, but first question first.

A joint venture is an alliance between parties for mutual benefit. Still doesn’t really explain things, does it?

Where different companies that might not even be in the same industries see an opportunity to work together for mutual benefit without giving up any of their core business, that is a joint venture.

Joint Ventures are usually for a specific and limited project, goal or purpose and may also be limited by time. They allow each of the parties to leverage the resources, technology, finance or markets of other parties, for mutual benefit.

Property developments are often completed by joint ventures, where each party contributes different resources or expertise to complete the project. One party might have all the knowledge necessary to set up, manage and complete the project, another party might own the land and the third party might be a builder. By forming a joint venture, they all limit their risks to the areas where they have knowledge and experience and get to participate in a project that would otherwise be out of their league.

Telecommunications companies might form joint ventures to construct and use infrastructure that is costly to build and maintain and would otherwise be underutilised. They each gain access to a necessary resource, but at a reduced cost.

Its also common for joint ventures to form between foreign companies wanting to break into a new market where there is an allied provider who already has their customers in that territory. Consider a home and contents insurance company that teams up with a car insurance provider in a market where they don’t currently have a foothold, being able to increase the variety of insurance products offered to the car insurer’s customer base.   

Joint ventures can involve more than two parties and can involve different types of entities, such as a mix of individuals, companies and trusts. There is no specific formula. Some joint ventures are formed by contract and some are formed as companies where each joint venture party owns shares. An incorporated joint venture is more likely to become a saleable asset in the future than an unincorporated joint venture.

Famous Joint Ventures You Might Not Have Heard About

Some recent international joint ventures include the following:

Haven – This health care focused joint venture was formed in 2018 between Amazon, Berkshire Hathaway and JPMorgan Chase. Think about the benefits each party might be contributing to the venture. Amazon has amassed huge amounts of data on consumer spending and is increasing its data collection into our homes with Alexa and Amazon Prime. Berkshire Hathaway has been around for 180 years accumulating incredible knowledge and experience in operating successful businesses and understanding market changes. JPMorgan Chase is an investment bank. The stated goal of Havel is to simplify insurance benefits, improve healthcare services and reduce the cost of health care services and prescription drugs.  

Self-driving cars – Google’s Waymo self-driving division has joint ventured with Jaguar Land Rover and Chrysler rather than building cars themselves and the car manufacturer doesn’t have to start its self-drive tech from scratch. Volvo and Uber, Honda and General Motors’ Cruise Unit and most recently, Hyundai and Aptiv have teamed up, all for similar reasons. Predictions are that the motor vehicle industry will be dominated by tech companies in the not too distant future.

Cosmotec – is a joint venture between the Sumitomo Corporation Group and a Brazilian based cosmetics company, with a view to gaining access to one of the world’s largest cosmetics markets.

Joint Venture Examples

For small business we see a lot of joint ventures where parties collaborate to develop a product or service they couldn’t offer on their own. Some very common joint ventures include collaborations between:

  • software developer + industry expert
  • web or app developer + industry expert
  • digital marketers + tradies
  • digital marketers + professional services
  • digital marketers + any business that needs leads
  • salesperson + any business that needs to convert leads
  • professional onboarding or training + any business with a high demand for bringing on new staff
  • international company + local distributor
  • industry expert + allied industry expert
  • property owner + property developer
  • financier + any business needing capital

We’ve already talked about some joint venture examples, so perhaps we should also look at the characteristics of a joint venture, or examples of the kind of provisions you’d expect to see covered in a joint venture agreement.

Governance/ Setup

  • there is usually a joint venture agreement setting out each party’s rights and obligations, as well as what will happen to any venture assets at the end of the project
  • the proportionate interests of the parties are described in the joint venture agreement, sometimes 50/50 and sometimes a different proportion
  • the joint venture agreement should set out how decisions will be made and any deadlocks broken and also provide for prompt dispute resolution to avoid holding up the project

Control

  • each party has a proportionate interest in the revenue or profits of the joint venture, but that may be different from their level of authority in decision making – investment partners are sometimes silent partners to a joint venture, meaning they don’t have a say in how the project is conducted
  • each party to a joint venture continues to control and operate their own business independently to the project
  • transactions may be recorded separately by the parties involved and invoiced back to the venture, or accounts will be maintained so that each of the joint venture parties can separately account for their contributions and any distributions they receive

Termination

  • what happens to the assets of the venture, particularly intellectual property when the project ends?
  • are the parties restrained from competing with the joint venture for a period?

What is the Difference Between a Joint Venture and a Partnership

Partnerships are generally long-term whole of business ventures whereas joint ventures are often project specific side gigs. In a partnership you also agree to take full responsibility for the partnership liabilities, whether you created them or not, and even if you didn’t know they were created by one of the other partners.

We generally discourage people from calling a party a joint venture partner or calling their venture a joint venture partnership. In fact, we prefer joint venture and partnership not to be mentioned in relation to the same project.

Some comparisons between a joint venture vs partnership

Benefits of a Joint Venture

The benefits to a party in a joint venture will depend upon their goal in entering the arrangement in the first place. Some common benefits of joint ventures include:

  • business diversification
  • entry into new markets
  • new distribution channels
  • leverage expertise of another party
  • flexibility
  • limited scope
  • defined risks
  • defined rewards
  • potential to create saleable asset
  • reduced costs
  • economy of scale
  • strategic information sharing

Risks of a Joint Venture

One of the scariest parts of going into a joint venture for small business owners is that the other party won’t be as committed to the project as you are, and you end up doing everything yourself. We’ve seen it happen.

One of our digital marketing clients stopped joint venturing when they realised that they were doing everything for the venture and the other party was sitting back and doing nothing. Our client had the team and the methodology and the impatience to get things moving, but each joint venture became a project where they should have simply been paid for their digital marketing services and ended the relationship after delivery. While we were able to exit them from all agreements without too much fall out, it put their business back 12 months and impacted their revenue goals.

Your main risks are the same as any business venture, loss of time, loss of money, loss of trade secrets or other intellectual property, loss of staff and reputational risk. Weigh up the benefits against the risks, mitigate your risks and consider your options. 

How can Onyx Legal help you?

Joint ventures have a contractual foundation.
You can form a joint venture with a handshake, or you can put a little thought into your expectations and negotiate an agreement that clearly sets out each party’s rights and obligations, as well as exit opportunities. We also highly recommend incorporating sensible dispute resolution mechanisms that will support the joint venture moving forward. If you are already in a joint venture, we can review the contract and clarify any legal rights and obligations you don’t understand.