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. 

Unfair Contract Terms – B2B Contracts Under Investigation

Unfair Contract Terms – B2B Contracts Under Investigation

Unfair Contract Terms – B2B Contracts Under Investigation

Is your business in line for an ACCC investigation?

From November 2016, business to business transactions came within the coverage of some provisions of the Australian Consumer Law. The big change was the application of unfair contract terms to business to business contracts involving small businesses, with the intention of helping small business. 

Although the law doesn’t currently make the inclusion of unfair contract terms in a contract illegal, the ACCC is pushing for updates in the law to specify that unfair contract terms are illegal, and to empower the ACCC to issue penalty notices. Until those changes are introduced, either the ACCC or a small business suffering loss, must apply to the court to seek to have the unfair contract term declared void and unenforceable – a slow and cumbersome process. 

Not every B2B contract is covered. The core elements are:

  • the contract is for goods, services or the sale or grant of interest in land
  • one party will be a small business with less than 20 employees
  • the value of the contract involved will be less than $300,000 or, if for more than 12 months duration, have an up front price of less than $1,000,000
  • the contract is a standard form contract rather than something specifically negotiated between the parties.  

Clauses highlighted as potentially unfair include:

  • the ability to end or cancel an agreement unilaterally
  • broad indemnities or excessive limitations of liability
  • unilateral right to change contract terms, including pricing
  • limits on a small businesses ability to exit a contract, including penalties for early termination
  • extended payment terms which may be of detriment to the recipient 

The ACCC has investigated the standard contracts adopted by companies in industries such as car hire, waste removal, telecommunications and agriculture and a number of businesses have agreed to change their contract terms as a result.

This is possibly also the reason for Coles and other large retailers announcing in 2017 that they would start paying small suppliers within 14 days, a big change from the 30-90 days or more some suppliers had experienced.

At present, only a court or tribunal (not the ACCC) can decide that a term is unfair. As at early 2020, the legislation was under review.  ACCC can ask for enforceable undertakings and start court action if it investigates the contract terms of a business and forms an opinion that those terms are unfair. If a court or tribunal does find a term ‘unfair’, the term will be void – this means it is not binding on the parties. The rest of the contract will continue to bind the parties to the extent it is capable of operating without the unfair term.

The ACCC sets annual priorities for investigation and successfully took action against Ashley & Martin Hair Studios and Mitolo Group potato traders in 2019. Don’t let your business become that example.

The ACCC website includes updates of recent prosecutions and enforceable agreements when made. 

How can Onyx Legal help you?

If your standard form contract hasn’t been reviewed in a few years, call us to arrange a fixed price review and update of those terms. If your standard form contracts are very old (they might still refer to the Trade Practices Act 1974 or retention of title) then we might suggest a whole new contract, starting from scratch. Either way, we can provide you a fixed price before we get started.

How to set up effective ‘terms of service’

How to set up effective ‘terms of service’

How to set up effective ‘terms of service’

 betteDo you have terms of service that help you manage client work?

One of the topics that came up at an Angel Investor and Entrepreneur breakfastwas terms of service.

One of the people I was speaking to is in the website and marketing design and development space, and the challenge that they’ve got is clients who don’t give them material they’ve asked for, like images or written content.

The problem is they have no service contract that says “if you don’t give us material in 7 days, then we can continue as if there’s no changes or we can go on and get the work done“.

The challenge for the designer is that they have a workflow they’re trying to work with and a work stream and they have staff allocated to certain projects and if you can’t move forward in a project, it messes up the whole business. You end up with staff who have nothing to do and other staff who are overwhelmed because clients simply don’t respond with the required information.

One of the things you can use terms of service for is to manage the relationship with your clients and to get them to give you information that you need from them in order for you to complete the work you need to get the job done.

You might like to do business with a handshake, but written contracts aren’t a bad thing. The reason you put them in writing is to better manage expectations and manage relationships. 

How can Onyx Legal help you?

If you would like to have a service agreement or terms of service prepared to fit your business, in a way that supports how you would like to run your buisness, let us help you. We usually start by requesting a copy of your typical work proposal and any details of any issues you’ve had in the past that you’d like to avoid in the future.  

Australian Standard Contracts Need Updating

Australian Standard Contracts Need Updating

Australian Standard Contracts Need Updating

Do your eyes glaze over when presented with a written contract for review? Do your hit the ‘I agree’ button and hope the contract terms are fairly standard? You are not the only one. A survey by The Guardian back in 2011 identified that only about 7% of consumers read terms and conditions before agreeing to them.

If so few people read contracts, then why should you bother to get your Australian Standard Contracts reviewed or updated?

Quick Answer: Update your contracts to avoid $100,000 in penalties and corrective advertising costs –

  • in April 2016 Europcar was ordered to pay $100,000 in penalties to ACCC and spend more in corrective advertising
  • in December 2016 Valve Corporation (online gaming) was ordered to pay penalties of $3 million to ACCC, publish corrective information and implement compliance programs

…Not to mention avoiding having to deal with customer complaints and potentially being sued.

Its also a good opportunity to have your contracts converted to plain English and presented in a language that makes sense to both you, and your customers. I’ve had clients give feedback that their customers have been impressed with how easy it is to understand their contracts. The Virgin brand has done it for years – using real language to help people manage the legal issues instead of exhausting customers with legalese.

But getting back to Unfair Contract Terms….

If you work B2B and use standard form contracts, you’re business now falls within the Australian Consumer Law. If your business customers have less than 20 employees, or the face value of the contract is less than $300,000, then you have to comply. Companies with more employees and higher transaction values are expected to get legal advice on their contracts as a matter of course. Its considered sensible business practice. Interestingly, there are still a lot of businesses who wait until the sh*t hits the fan before they ask for help, and by that stage, its a whole lot more expensive to manage.

So, what are the key areas of your standard contracts that need review?

The courts look at a variety of different things but some of the most frequently considered –

  • whether the terms are negotiable or just ‘take it or leave it’ (click wrap agreements for software are ‘take it or leave it’ contracts)
  • if the contract was prepared by one party before any discussion between the parties
  • who has all or most of the bargaining power
  • the effect of an offending term on the rights of the affected party
  • the actual risk or damage to the contract writer
  • whether the terms of the contract are altered to take into account the specific characteristics of the other party or the particular transaction.

The Europcar case focused on the disproportionate liability to the person hiring a vehicle. In that case Europcar attempted to hold a hirer responsible whether or not they were at fault. Europcar also required the hirer to pay a damage liability fee of $3650 regardless of the actual value of damage, unless the hirer bought extra insurance. So theft of the vehicle could cost a hirer $3650, but so could a dented bumper. The court decided in that case that the contract terms were not reasonably necessary to protect the legitimate interests of Europcar, as well as being disproportionate.

It is also important that standard contract terms are ‘transparent’. This means your contracts need to be –

  • expressed in reasonably plain language
  • legible
  • presented clearly
  • readily available to any party affected before they buy

Some common contract terms that will need review are:

  • clauses that give one party the right to make changes, but not the other – like software agreements that allow the software provider to increase fees automatically
  • clauses that roll over automatically, regardless of the customers wishes
  • clauses that make it hard or impossible for one party to terminate or get out of the agreement
  • clauses that require a buyer to forfeit there deposit, even if you cannot supply the product or service
  • one sided indemnity provisions
  • clauses that disclaim all liability, including negligence
  • clauses that limit the damages a buyer can claim, but don’t limit the damage the seller can claim
  • penalty provisions – like advertising agencies that want a two year agreement with no right to terminate and claim a right to charge whether or not they provide any advertising

If you are one of the 7% of people who read contracts before you agree to the terms, you might have seen some of these provisions. If you haven’t looked at your own business standard contract for a while, NOW is a great time to review and update. We generally recommend that Australian Standard Contract forms, including terms and conditions and privacy on your website or App, should be reviewed and updated at least every two years to ensure your business remains compliant and you avoid the risk of hefting fines and time consuming legal actions.

When reviewing and updating your standard contracts, consider what is most important to your business, where you have the most issues with customers and how you’d like to communicate with your existing customers and leads. We can assist you with a strategy for implementation as well as helping you review, update or refresh your legal contracts.

Contact us now to request a contract review or to update or create your standard contract terms.

How can Onyx Legal help you?

We love writing contracts. Weird, we know. But hey, some people love mountain climbing, so go figure!