What You Should Know About Privacy Law in Australia

What You Should Know About Privacy Law in Australia

What You Should Know About Privacy Law in Australia

What you should know about Privacy Law in Australia – it’s changing.

And privacy law is changing around the world as well.

2023 Privacy Awareness Week was the first week of May.

Changes to Australian Privacy Law in December 2022

Privacy law is under review in Australia. In December 2022 the federal government pushed through the Privacy Legislation Amendment (Enforcement and Other Measures) Act 2022 which was tabled in response to the Optus and Medibank personal data hacks.

The legislation was rushed due to several factors. Many people are upset because the Medibank hack perpetrators released all the collected data on the dark web in November 2022. Even politicians have been affected, and they want to take action during their first term to prevent a similar data breach from occurring again.

Cynically, it also provides the government with the potential to recover a little of the budget deficit if it gets to impose penalties at the higher rate, and it is no small jump in penalties. The Australian Information (OAIC/Privacy Commissioner) will have the opportunity to test these recent changes in the law in reviewing the Latitude Finance data breach, where it was discovered that some personal information had been held on to for almost 20 years, and well past Latitude’s legitimate business needs.

The main changes to Privacy law extending the Privacy Commissioner’s powers and increasing in penalties are:

  • significant increase in penalties up to $50 million – see more below;
  • extension of coverage to foreign entities that carry on a commercial activity in Australia, whether or not having any other Australian link;
  • provide the OAIC with greater enforcement and information sharing powers; and
  • provide the Australian Communications and Media Authority (ACMA – the body responsible for regulating anti-spam compliance) with greater information sharing powers.

One practical consequence is that conduct complained about as spam could now result in investigations into how the same company manages personal information, with potentially huge penalties for non-compliance.


Privacy Review Recommendations for 2023

Earlier in 2023 the federal government was calling for submissions on the Privacy Act Review Report,  published by the Attorney-General’s Department, which makes 116 recommendations for proposed changes to the Act.    

‘Small business’ is mentioned 207 times in the Report.

Some of the changes proposed to affect small business are:

  1. that the exemption for small businesses with a turnover of $3 million or less be removed;
  2. that the exemption for small businesses who have obtained consent to trade in the personal information they collect, be removed;
  3. that protections be extended to private sector employees (noting that many of these employees are employed by small businesses);
  4. OAICs powers to issue penalty notices be extended;
  5. criminal offences be introduced;
  6. introduce the right of a person to sue for ‘serious invasions of privacy’ and or for a ‘serious invasion of privacy’ to be a criminal offence;
  7. Introduce an express requirement in APP 5 that requires collection notices to be clear, up-to-date, concise and understandable with appropriate accessibility measures; and
  8. the requirement for risk assessments to be conducted for activities ‘with high privacy risks’. 

What do Changes in Australian Privacy Law mean for Small Business?

Given the changes in technology over the last 20 years and the amount of data collected by small businesses, it is likely the exemption will be lifted because the data collected does put individuals at risk.

One of the examples used in the report referred the amount of information collected by real estate agents in receiving tenancy applications. The risks to individuals relating to the type of information collected (photo identification, earnings, bank account details etc) by real estate agents was considered sufficiently high to warrant a positive obligation on the collecting party.

It was also mentioned that the lack of understanding of data handling practices by small businesses could increase the risk of a data breach occurring.

In our experience, many small business owners have not thought about what systems they use and how that impacts the personal information they collect.

Can you answer these questions?

  • What email system do you use? 
  • When was the last time you checked your email provider’s privacy obligations and protections, and how that impacts your use of their system?
  • What happens to the personal information (names, email addresses, phone numbers etc) going through your email?
  • How much historical email data do you have stored? Should you?

Preparing for the Removal of the Small Business Privacy Law Exemption

Small business owners need to immediately increase their knowledge and understanding of the information you collect, how you collect it, what you do with it, how long you need it, and what you do with it when you no longer need it.

This also means small business owners will need to understand your privacy policies and whether the policy accurately reflects what you do, and whether it is clear enough for your customers to understand.

This means thinking about your customer base in a new way, regardless of whether they are likely to read your policy before the purchase or wait until they have a problem.

“When was the last time you read your privacy policy?”

When the small business privacy law exemptions are removed, as a small business owner you will be exposed to the risks of penalties from the OAIC, being charged with a criminal offence or being sued by an irate customer. 

If you don’t understand how you protect personal information, take the time to review now, and understand your existing systems, or implement new systems. 

Do you know how to complete a risk assessment on the types of information you collect, 

What are the Penalties for Serious Breaches of the Privacy Act?

Penalties for serious breaches of privacy obligations have increased.

For individuals, such as sole traders and independent contractors, to a maximum of $2.5 million (from $440k).

And, for bodies corporate, such as companies and incorporated associations, from $2.22 million to a maximum of:

  • $50 million
  • three times the value of any benefit obtained through the misuse of information
  • if the value of the benefit cannot be determined, 30% of the body corporate’s adjusted turnover (revenue in Australia) in the relevant period.

As a Small Business Owner, do I need a Privacy Policy?

If you fall within a small business exemption, then before mid-year 2023 you will not be legally required to have one. Your customers or clients might have different expectations.

Proposals for changes in legislation are under consideration in 2023. The government responded to the Optus and Medibank breaches within a few short months, with legislation that had immediate effect. It is likely that changes to small business privacy obligations with have a 6 – 12 month lead time before they become effective.

You can act now to be prepared, or wait for the last minute rush. Again, it might be worthwhile surveying your client base to find out what their expectations are of the systems you have in place to protect their privacy.

Can Small Business Owners just use template Privacy Policies?

Some business owners have a high-risk tolerance and just want to get on with business without worrying too much about compliance issues, and are more inclined to ask for forgiveness rather than consent.

Other business owners are low risk and want to get everything right before they start trading.

Most small businesses are somewhere in between.

The highest risk is copying and pasting something from a source that is not relevant to your country, or from someone else’s website without understanding the implications on your business. If you get it wrong, you can potentially create higher liability than you are legally required to, or no protection at all.

One of the most common problems with privacy policies is that people try and use them without understanding them. If a template comes from a trusted provider and mentions your local laws, and you understand it, and it reflects what you actually do in your business, then it may be appropriate for your business.

We are unable to specifically say if something is right for your business or not without reviewing your business and the terms of the privacy policy. You can book a consultation with one of our team to check any website legal terms you have in place by making an appointment.

What about ChatGPT Privacy Policies?

We have tested ChatGPT and the draft policies it generated were not 100% compliant with privacy laws of any jurisdiction. They were more geared toward the United States law.

The United States does not have a single consistent approach to privacy protection. Laws are different in each state, so there is no clear guidance on compliance, which is probably why the ChatGPT version is a bit vague.

Who Cares about Privacy Laws?

There is privacy, and then there are privacy laws.

Someone wanting privacy may be considering time away from the public eye, and no being disturbed by other people. That is not what privacy law is about.

Privacy law is not about stopping someone from stalking you on social media or keeping someone out of your home or away from your family. As much as you might sometimes like to, privacy law does not support you in telling someone to “keep your nose out of my business”.

Australian privacy law is specific to the protection of personal information.

Personal information is something that can identify you or be combined with other available information to identify you. A photo, an address, a phone number, and all the same information that some social media users freely give away when being asked to participate in a quiz to determine their Star Wars identity.

Many businesses want as much information they can get from a customer or potential customer so that they can target products or advertising to that person. The question is, is the collection of all that information necessary?

The Office of the Australian Information Commissioner completed a survey in 2020 (pre- Optus and Medibank hacks) suggesting that 70% of Australians were concerned for the use of their personal information and 87% wanted more control and choice over the collection and use of their personal information.

In addition, the recommendations for changes to privacy laws include enabling individuals to have their personal information erased, and propose giving individuals the right to sue controllers or processers of personal information for serious invasions of privacy.

It is also likely that there will be penalties for collecting more personal information than is reasonably required for the services being delivered, and for coercing people to provide personal information, such as using provisions that do not entitle someone to obtain a free quote unless they provide their name and email address.

If you worry about what is happening every time you give another business your personal information, then imagine how your customers feel. Now is the right time, before there are significant consequences for non-compliance, to consider reviewing and updating your privacy policy and procedures.

This article contains general legal information and should not be relied upon without seeking appropriate legal advice specific to your circumstances. 

How Can Onyx Legal Help You?

If you want a better understanding of your privacy obligations or the status of your current privacy policy and procedures, make an appointment with one of our team to discuss it.

Restraint of Trade

Restraint of Trade

Restraint of Trade

What is the purpose of a restraint of trade?

Thank you to The Project & Procurement Professional Community of Practice for asking for more information on this topic.

A restraint of trade is usually requested to protect business revenue and reputation. Some areas where restraints are commonly requested are:

  • where an employee is leaving a business
  • where a contractor is engaged to work with a business temporarily
  • where a shareholder or investor is exiting a company and they were more than a silent partner
  • on the sale of a business to new owners

Restrictions on trade must be reasonably necessary and proportionate to the legitimate interests being protected. In general, for a restraint of trade provision to be enforceable, it must protect a legitimate interest, such as protecting trade secrets, confidential information, or customer relationships, and it must be reasonable in scope, duration, and geographic area.

A confidentiality agreement regarding the use of confidential information may have some of the same effects as a restraint of trade, but they are not the same thing. 

What is reasonably necessary and proportionate for a restraint of trade? 

Different types of restraint will be considered differently by the courts if a decision needs to be made about the reasonableness of the restraint. 

The parameters of a restraint need to be considered for each different type of agreement and circumstance. Restrictions on stealing clients or customers are the most likely to be enforceable. Having regard to the difficulty in attracting and retaining those clients, and the value they bring to the restraining business is what will impact the reasonableness or otherwise of a timeframe for restraint.  

For some businesses, a restraint framed in time and area is more easily applied and makes more sense. In cases where business can be conducted online with international partners, a limit by location will have no benefit. Note also that a court may be limited by its territorial jurisdiction in enforcing a restraint, so an employee leaving a job in Australia and taking up with a direct competitor in the US might only be able to be sued if they steal clients and that is what they are restrained from doing.


Where a restraint of trade is stated to apply to an employee, then it will NOT be reasonable if it has the practical effect of stopping someone from earning a living or requires them to move away from their usual home to be able to get a job. 

How an employee restraint takes effect may be different if the person had ownership in the business. A more restrictive restraint of trade is likely to be reasonable when applied to a former owner, rather than an unrelated employee. See ‘sale of business’ below. 

Restraints on employees also must take into consideration the nature of the work completed by the employee. 

It is unlikely to be considered reasonable to attempt to restrain someone who is a barista from working in another local café. This is because the barista is unlikely to hold any unique or confidential information that could be detrimental to the original business. The barista is unlikely to control where the coffee is sourced, how it is priced, who the customers are or what the business serves in addition to coffee. 

Compare a barista with a chef. The chef may have a following of people who really appreciate their style of food and will follow them. In that case, a form of restraint might be reasonable. 

At the other end of the scale, a C-suite executive is likely to have a restraint in their contract of employment because of the nature of the work they do and the amount of knowledge they have. 

Examples of what could make a restraint reasonable (restraints don’t usually contain all) are:

Limits on time

A 6-month restraint will be more reasonable than a 5 year restraint, however, you must think about the impact on the business.  Think about the cycle of change applying to customers or clients of the business. If they come back every week, then a shorter restraint is likely to be reasonable. If they purchase products or services only once every few months, then a 12-month restraint might be reasonable. The more knowledge a person has about the management and operations of the business, and they risk that knowledge has to their competitive advantage, will also impact the length of time that is considered reasonable. 

The impact on the business to be minimised is the loss of customers. If customers purchase again getting used to working with a new member of staff, then the restraint has had the desired effect.

Limits on geography

I’ve seen people request restraints from as little as 3km to worldwide restraints. What is reasonable, will depend on the potential impact on the business. 

So, an accountant who works with clients predominantly located in Queensland, Australia, might be able to be restrained form working within a radius of their former office, but are still unlikely to be able to be restrained in the whole of Queensland. If their work is conducted in Queensland and their client base is not, then a geographical limitation might not be supportable at all, and a different type of restraint should be considered. 

Limits on contact with existing clients of the former employer

Limiting contact with existing clients and prospects is the most commonly supportable form of restraint because it is easy to demonstrate the benefit/ loss to the business. If a client that has spent $100,000 a year with their insurance broker suddenly leaves to follow the particularly broker they were working with, then that is a quantifiable impact on the broking business. 

Limits on roles or the nature of work

It would be difficult to justify a restraint on anyone who does customer facing work in retail or hospitality simply because of the nature of the work, and personal service industries like hairdressing and beauty therapy may also be challenging. Someone in general management might be restrained from working in the same industry or for a competitor, but not as a general manager and not from managements roles. 

Investors/ shareholders 

Common sense dictates that a restraint won’t stop a former investor or shareholder from purchasing shares on the share market. This is sometimes specified as a carve of from a restraint in the restraint clauses. 

A shareholder who has been involved in a startup and been involved in the initial ideation, strategy, implementation and changes required to develop the business is likely to be restrained from seeking to be involved (other than through the stock exchange) in a competing business for a period consistent with the initial development phase of that business – which might be 2 -3 years.  

Sale of business 

When buying a business, it is common to restrain the seller from competing for a period of time which reflects your investment in that purchase. If the purchase price has been based on a multiplier of the business revenue or profits, then that multiplier might also support a period of restraint. So if the business was sold for 3 x the value of the profits, then a 3 year restraint might be considered reasonable as the seller should recover its purchase price in that time frame.  


It is difficult to restrain contractors. The nature of what they do requires a level of flexibility in what they deliver, and there is less certainty in their roles than that of employees. A contractor can be restrained from using or misusing confidential information and can be reasonably restrained from poaching clients and staff, but geographical restraints are rarely supportable. It might be reasonable to restrain a contractor from working with a direct competitor within a certain period, but that restraint will be more focused on how the use of confidential information might cause detriment to the party applying the restraint, or benefit to a future contracting partner. 

Do restraints get enforced?

It is not unusual for businesses to send cautionary or potentially threatening letters when they are of the view that a restraint has been infringed. As with any kind of dispute, most are resolved without ever going to court. There are a variety of restraint cases reported in superior courts around the country in the last ten years including:

A 2014 Queensland Supreme Court case involving an ophthalmologist who sold his Rockhampton practice to a publicly listed company. 

The restraint provision was held to be reasonable only in prohibiting the doctor from poaching clients or offering services to clients of the business he sold.

The court found the restraint unreasonable where it attempted to restrain the doctor from working as an ophthalmologist within any of the decreasing radii of 20, 15, 10, 5 or 2 kilometres of a clinic owned by the buyer, or him being employed by a competitor. It was also considered unreasonable to attempt to stop the doctor from attempting to poach employees from the buyer.  

 The reasonableness of the restraints in this case is impacted significantly by the standing of the buyer and might have been considered reasonable if the buyer was another small business owner. 

A 2020 ACT Federal Court case involving a restraint against a shareholder of a financial planning business. 

In that case the “restraint provisions were clearly the work of lawyers, each with one eye on drafting the greatest possible protection for the applicants and with the other eye firmly shut to the limits that the law places on such restraints by requiring them to be the least necessary to protect the applicants’ interests in the business of New Civic. The result is restraint provisions that are impossibly convoluted and complex and unjustifiably broad” and therefore unenforceable.

Can there be compensation offered in exchange for agreeing to a restraint?

Yes, it is possible for compensation (payment) to be offered in exchange for agreeing to a restraint of trade provision, which can be used as a way to “sweeten the deal.” However, the enforceability of such provisions and the compensation offered will depend on various factors, including the reasonableness of the restraint and the specific circumstances of the agreement.

The amount of the payment should have a direct correlation to the reasonableness of the restraint. So, if an executive is to be broadly restrained for 12 months in a way that impacts their ability to seek other employment, reasonable compensation for that restraint might be the equivalent of that person’s annual wage. However, the specific circumstances, the scope and duration of the restraint, and the legitimate interests being protected will all still need to be considered in determining the reasonableness of a restraint. It may still be challenged in a court. 

Unless a restraint has been written into an agreement, such as an employment agreement, at the start of employment and therefore agreed in advance, an employer must offer some form of consideration for that restraint to form a binding and enforceable contract. Compensation offered as consideration can include monetary payments, shares, benefits, or other forms of value.

However, it’s important to note that even if compensation is offered, a restraint of trade provision may still be found unenforceable if it is found to be unreasonable or against public policy. 

It’s recommended to seek legal advice from qualified professionals when drafting or entering into agreements containing restraint of trade provisions and compensation arrangements in Australia to ensure compliance with applicable laws and regulations.

What type of action could be taken against somebody if they were to breach the restriction?

A breach of a restraint provision is usually challenged as a breach of contract in superior court. Depending on the way in which the claim is stated, it may be open to the court to make orders such as:

An injunction
A court order that requires the person who breached the restraint to stop the prohibited activity. Injunctions can be sought to prevent further breaches of the restraint and to protect the legitimate interests of the party seeking enforcement.

The party seeking to enforce the restraint may also seek damages, which are monetary compensation for the losses suffered as a result of the breach. Damages may be awarded to compensate for financial losses incurred due to the breach of the restraint, such as lost profits or other damages directly resulting from the breach.

An account of profits
In some cases, the party seeking to enforce the restraint may seek an account of profits, which requires the person who breached the restraint to account for any profits they have gained due to the breach. This can be a remedy to prevent unjust enrichment by the person who breached the restraint.

Specific performance
In certain circumstances, the party seeking to enforce the restraint may seek specific performance, which is a court order that requires the person who breached the restraint to fulfill their obligations under the restraint. This may be sought when damages are not an adequate remedy or when the party seeking enforcement wants to ensure compliance with the terms of the restraint.

Could a restriction of trade be seen as anti-competitive?

It is more likely that a court will consider a restraint provision to be unreasonable if it has the effect of limiting competition, rather than reviewing the restraint under competition law. This will depend on how a claim is structured when made to the Court. 

If mutually agreed by all parties, could the restriction be waived or amended?

Any contractual provision can be waived or amended by later mutual agreement between parties. 

This article contains general legal information and should not be relied upon without seeking appropriate legal advice specific to your circumstances. 

How Can Onyx Legal Help You?

If you are concerned about a restraint provision you have in contract, book a short advice session to discuss with one of our team and assess its enforceability, and how to fix it.

Distributor Agreements

Distributor Agreements

Distributor Agreements

Distributor Agreements

As a small business operator in Australia, entering into a distribution agreement can be a beneficial way to expand your reach and increase sales. Distribution agreements are contracts between two parties where one party agrees to distribute the products or services of the other party in a particular territory or market. They are contracts that define the terms and conditions under which a manufacturer or wholesale supplier allows a distributor to sell or distribute its products. These agreements provide a framework for the relationship between the parties involved, including the roles, responsibilities, and obligations of each party.

For small business operators such as software providers or trade supply wholesalers, distribution agreements are particularly critical, as they provide a means of expanding their reach and increasing their customer base. They outline the terms and conditions under which the distributor is authorised to sell or distribute the manufacturer’s products. These agreements typically cover a wide range of issues, including pricing, payment terms, delivery schedules, marketing and advertising, and territory restrictions.


Key Terms in Distribution Agreements

Before we delve into the specifics of distribution agreements, it’s essential to understand the key terms that are commonly used in these agreements. The following terms are some of the most important ones:

  1. Territory: This refers to the geographic area in which the distributor is authorised to sell the products or services. This will be particularly important to define when distributors use online marketing channels. 
  2. Products: This refers to the products or services that are being distributed.
  3. Term: This is the length of time that the distribution agreement will be in effect.
  4. Minimum purchase requirements: This is the minimum amount of products that the distributor is required to purchase during a specified period. 
  5. Exclusivity: This refers to the exclusive rights granted to the distributor to sell the products or services in the specified territory. Not all distribution agreements are exclusive. 
  6. Termination: This refers to the circumstances under which the distribution agreement can be ended.
  7. Intellectual property: This refers to the ownership and use of any intellectual property, such as trademarks and copyright, associated with the products or services.

    Why are Distribution Agreements Important?

    Distribution agreements are essential for several reasons. Firstly, they provide a legal framework for the relationship between the parties involved, including the roles and responsibilities of each party. This helps to ensure that both parties are clear on what is expected of them and what they can expect in return.

    Secondly, distribution agreements can help to protect the interests of small business operators. By defining the terms and conditions of the relationship, they can help to prevent misunderstandings, disputes, and legal issues down the track. This is particularly important for small business operators who may not have the resources to fight protracted legal battles.

    Finally, distribution agreements can help small business operators to expand their reach and increase their revenue. By partnering with distributors, they can reach new markets and customers, without having to invest significant resources in marketing and advertising.


    Important Considerations for Small Business Operators

    As a small business operator, there are some critical considerations you should take into account when negotiating a distribution agreement. These include:


    It’s important to define the territory clearly in the agreement to avoid any ambiguity. This will ensure that the distributor understands their specific rights and obligations within the designated area and there is no overlap with other distributors. 

    Where distribution can be promoted online, particularly through platforms like Facebook, it is important to be clear about what distributors can and cannot do, and what happens if a purchaser falls within a different territory. 

    Minimum Purchase Requirements

    Be careful when setting minimum purchase requirements. The requirements should be reasonable and take into account the distributor’s ability to sell the products or services in the designated territory. A failure to meet a minimum can be a trigger for ending the contract. 

    We’ve had a client in the past who was responsible for maintaining a minimum order on a product imported from overseas. Once COVID hit, the demand for their product decreased and they were in breach of their agreement. The manufacturer provided leeway in the circumstances but has declined to provide an exclusive distribution agreement going forward, which means our client’s business is now of little value for future sale, as a competitor can now import the same thing. 

    Pricing and Payment Terms

    Another important consideration is pricing and payment terms. This may be affected by which party holds stock pending sale. A manufacturer will usually want their production costs covered before allowing product to leave the warehouse, but a distributor may not be required to pay the full wholesale cost until the point of sale. The timing and method of payment, as well as any penalties for late payments or failing to meet minimum order requirements, need to be sufficiently clear that an independent third party (not necessarily an accountant) can work out what needs to be paid, and when just from reading the contract.

    Marketing and Advertising

    Marketing and advertising are critical to the success of any distribution agreement, and distributors are usually selected on the basis that they have an existing market that will purchase the product. Small business operators need to ensure that the distributor has a clear understanding of their products and target market and that they have the resources to market and advertise the products effectively. 

    For online retailers, influencers are like distributors. They have an existing market, and that market likes specific products and expects to hear about them from the influencer. 


    Small business operators should carefully consider whether or not to grant exclusivity to the distributor. While exclusivity can provide the distributor with a competitive advantage, it can also limit the wholesaler’s ability to enter into agreements with other distributors in the same territory. If a distributor has exclusivity but is failing to meet minimum orders, then it may be possible to renegotiate terms to reduce their territory to open an area up to another distributor.  


    Termination provisions in the agreement must be clear and reasonable. This will help to avoid any disputes or legal issues if the agreement is terminated. An area that is often overlooked is the right of the manufacturer or wholesaler to revoke the distribution rights in circumstances with the distributor could bring the manufacturer into disrepute. For example, if a business decides to publicly support a particular viewpoint – eg. Margaret Court opposed the Australian same sex marriage bill and Qantas publicly supported it – and the wholesaler does not agree with that viewpoint and believes it will cast them in a poor light, then the wholesaler should have the right to end the distribution agreement. 

    Intellectual Property

    Small business operators should be clear about their intellectual property rights and how they will be protected in the distribution agreement. The most common thing to be protected is usually a brand. There should be rules around how it can be used and displayed. It should also ensure that only legitimate products are sold and not counterfeits. 


    Tips for Negotiating Distribution Agreements

    Negotiating distribution agreements can be challenging, whether you represent the wholesaler or manufacturer, or represent the distributor. Here are some tips to help you negotiate a fair and beneficial agreement:

    Understand Your Market

    Before negotiating a distribution agreement, it’s essential to understand your market and the potential demand for your products or services. This will help you to determine the appropriate territory and minimum purchase requirements.

    Be Clear About Your Expectations

    Be clear about your expectations regarding sales targets and marketing efforts. This will help the distributor to understand what is required of them and ensure that both parties are working towards the same goals.

    Seek Legal Advice

    It’s important to seek legal advice before entering into a distribution agreement. A lawyer can help you to understand the terms of the agreement and ensure that your intellectual property rights are protected, as well as making sure that any termination provisions are balanced and realistic. 

    Negotiate The Terms

    Don’t be afraid to negotiate the terms of the agreement. Small business operators should be willing to compromise, but they should also ensure that the agreement is fair and beneficial to both parties.

    Review The Agreement

    Once the agreement has been negotiated, it’s essential to do some worked examples of what the terms provide so that all parties are happy the agreement meets their expectations. It is also important to ensure there are no unfair contract terms which could affect the enforceability and profitability of the agreement. 



    Distribution agreements are useful for small business operators and work well for businesses such as software providers or trade supply wholesalers. These agreements provide a legal framework for the relationship between a manufacturer or wholesale supplier and a distributor, defining the terms and conditions under which the distributor is authorised to sell or distribute the products. You need to carefully consider the distribution territory, pricing and payment terms, marketing and advertising, exclusivity, and term and termination when entering into a distribution agreement. By doing so, the manufacturer or wholesale supplier can protect their interests and expand their reach, increasing their revenue and success in the market.




    How Can Onyx Legal Help You?

    Considering becoming a distributor, or finding distributors for your products or services? Make an appointment with a member of the Onyx Legal Team to review your strategy and help create a clear, easy to use contract to support your growing business. 


    What the Changes to Unfair Contract Terms Mean for Small Businesses

    What the Changes to Unfair Contract Terms Mean for Small Businesses

    Unfair Contract Terms: What Online Businesses Need to Know


    Have you ever signed an online contract without fully reading or understanding its terms and conditions? 

    If so, you’re not alone. 

    Many people, from those running small businesses to vulnerable individuals, lack the knowledge, ability, time, resources, bargaining power, and patience to effectively review and negotiate terms of standard form contracts.

    Some companies flatly refuse to consider changes and respond along the lines of “those are our standard terms, take it or leave it”. That approach is becoming risky.

    In an attempt to try and level the playing field a little, the Federal Government recently passed a law  (Treasury Laws Amendment (More Competition, Better Prices) Act 2022), which updates the Australian Consumer Law (ACL) to enable the Courts to levy penalties on businesses for including unfair contract terms in standard form and small business contracts. 

    If you have previously paid very little attention to your standard form contracts, or ‘adopted’ them from someone else, or had them given to you by a well-meaning colleague, now is the time to review. If you don’t review your established business practices you face potentially being held liable for quite severe penalties for seeking to impose, or enforce, any unfair contract terms. 

    Previously, the Courts could only declare specific terms of a contract unfair and void, but because unfair terms were not prohibited by law, the Court could not impose any penalties. Now they can. 

    It is expected that individuals and small businesses will have stronger bargaining powers as a result of these changes. A small business is one that employs fewer than 100 people or has an annual turnover of less than $10 million – so the majority of Australian businesses.  

    This still means you either have to go to court, or be taken to court, for these new penalties to be imposed. 

    A business will be found to have breached the law (s.23(2A) ACL) if:

       (a)  the person makes a contract; and

       (b)  the contract is a consumer contract or small business contract; and

       (c)  the contract is a standard form contract; and

       (d)  a term of the contract is unfair; and

       (e)  the person proposed the unfair term.

    At the same time the penalties for breaches such as false or misleading representations, coercion, unconscionable conduct, supplying products that do not comply with established standards, and harassment have attracted maximum penalties for individuals of $2,500,000 and for companies at $50,000,000. Other calculations may be applied, as set out below 

    This means that all businesses, including those businesses mainly online, will need to be more attentive in reviewing and amending their standard form contracts to avoid breaching the revised laws and inadvertently incurring severe penalties.

    As a business, you have until 10 November 2023 to review and amend your standard form contracts.

    As a business, you have until 10 November 2023 to review and amend your standard form contracts.


    But What Exactly Is An Unfair Contract Term?

    An unfair contract term, according to the ACL, is one that causes an unreasonable or unnecessary imbalance between the parties’ rights and obligations under the contract. An unfair contract term protects one party whilst the other party bears all or most of the risk and cannot negotiate their position. So, a ‘take it or leave it’ approach to contracts. 

    Unfair contract terms could also include clauses that are not reasonably necessary to protect one party’s legitimate interests and would cause financial or other detriment to the other party if relied upon. 

    Examples of unfair contract terms include allowing one party to terminate, amend, or renew the contract while the other cannot. Other examples include allowing one party to vary the price, goods, or services without the other party’s consent or ability to end the contract if they disagree. 

    Consider an example of an online subscription product where the company providing the product unilaterally decides to increase the monthly plan without your consent. You have a power imbalance, with little ability to negotiate a lesser plan. The increase might even apply without you realising it – even if the business provided notice via email before the change. Not everyone gets through their emails… 

    Unfair contract terms have always been prohibited and the amendments to the ACL do not change the definitions or considerations of defining unfair contractual terms; instead the amendments affect how those contract terms are dealt with and the increased penalties. 

    The situation used to be that if you felt there were unfair contract terms in an agreement, you had to go to court to get an order saying the terms were unfair and therefore void. Now, the Court also has the ability to levy penalties. 

    Contract terms which the courts have previously considered to be unfair include those which:

    • give rise to an imbalance between the parties’ rights and obligations
    • are not necessary to protect any one party’s legitimate interests in a contract or project
    • allow one party but not the other to limit the performance required under the contract
    • penalise one party but not the other for breaches of the contract
    • allow one party but not the other to renew the contract
    • allow one party to vary the contract with the other party having a right to terminate for breach
    • allow one party to vary the price or goods or services without the other parties’ consent
    • allow one party to terminate on a wide range of reasons and which may have significantly adverse consequences for the other party

    Maximum Penalties

    Does your business have the greater of $50 million, or 3x the value of the benefit obtained, or, if the value of the benefit cannot be determined, 30 per cent of your business turnover during the period you engaged in the conduct?

    Those are the maximum penalties for a company if it is found to have imposed unfair contract terms. 

    For individuals, it is $2,500,000.

    If you are a sole trader, can you afford $2,500,000?

    Fines have also been increased for breaching the Competition and Consumer Act 2010 (CCA). For example, a finding of anti-competitive behaviour can carry maximum penalties of up to $50 million or three times the value of the benefit obtained, or, if the value derived from the breach cannot be determined, 30 per cent of the company’s turnover during the period it engaged in the conduct, whichever is greater. No business can afford to take these unnecessary risks.

    In addition to these penalties, the courts have the power to void, amend, or refuse to enforce part or the whole contract to remedy the loss suffered by the wronged party. 

    If a particular clause is deemed to be unfair, the court may also stop a party from including similar unfair terms in future standard or small business contracts. 

    Online businesses of all sizes and industries are at risk of breaching the revised legislation, but those that using standard form contracts are particularly exposed. To avoid these risks, all small businesses including online businesses should review their standard form contracts, obtain legal advice if necessary, and amend any outdated or unfair terms before the 12-month respite period ends on 9 November 2023.

    These changes to the ACL seek to limit the negotiation power imbalance between parties in the standard form and small business contracts. 

    They aim to prevent companies or individuals from taking advantage of unfair contract terms and penalising those who do. As an online small business owner, it’s important to be aware of the changes and take action to ensure that your standard form contracts comply with the revised legislation. 

    Now is the time to review and revise any standard form contracts you may have!



    How Can Onyx Legal Help You?

    Send us your standard terms and conditions to advice@onyx.legal and ask for a quote to update your contracts or terms and conditions before it is too late. 

    Coaches and Consultants – 3 Legal Case Studies

    Coaches and Consultants – 3 Legal Case Studies

    Coaches and Consultants – 3 Legal Case Studies

    Coaches and Consultants – 3 Legal Case Studies

    The challenge with coaching or mentoring, whether that’s life coaching or business coaching, is that your students often expect you to do it for them instead of them doing it themselves.

    This is completely contradictory to the sports setting where people understand that the coach is the person who does not end up on the field, who is not part of the game, and who supports the players get the best out of themselves.

    As a coach you are likely to have a variety of offerings for your clients, which might include any one or more of:

    • downloadable, self-paced individual programs
    • moderation of online forums
    • facilitation of mastermind groups, online or offline
    • individual coaching sessions, in person or via technology
    • a combination of individual and group coaching sessions, in person or via technology 
    • face-to-face events 
    • consultancy 

    Some of the coaches we work with have limited number high end programs which provide a combination of the different offerings above.

    Due to the variety of different offerings the coaches we work with provide, rather than one case study, we will share three snap shots of the problems some of our coaches have encountered, and the solutions we provided.

    We would also like to thank Si Harris, Business Strategist, for requesting these case studies.

    PROBLEM 1 – managing expectations

    Your advertising, and your Coaching Services Agreement should manage the expectations of your client. You should be clear before coaching commences that it is the client’s responsibility to get what they can out of the coaching program, and if the client does not participate fully, they will not get the results they expect.

    It is also important that you carefully assess the capabilities of your potential client before agreeing to provide services to them. If it were obvious before coaching commenced that your potential client could not afford your services, you run the risk of ending up in dispute over payment. Similarly, if you recognise that your potential client has a particular personality trait or disorder that you do not want to manage, or do not have the qualifications or experience to manage, it is best not to start the relationship at all.  

    CASE STUDY 1 – Complaint about Services

    We have a coach who focuses on assisting their clients to develop a business plan. Business planning is not an easy process. It requires time and effort. This coach provides a 13-week program with the promise that at the end of the program their client would have a completed business plan.

    The problem they faced was clients seeking refunds at the end of the program if they were not happy with their business plan.

    We restructured the coach’s Coaching Services Agreement to clearly set out and include what the coach provided, what they did not provide and what actions the client was responsible for undertaking throughout the coaching program. The client had to sign up to their responsibilities and was responsible for completing different sections of a template business plan from the start of the coaching relationship. We also prepared a disclaimer for our coaching client’s website which clearly set out the limits of their services, and the obligations of the participant. The disclaimer was easily accessible through the footer of the website, reflected the terms of the Coaching Services Agreement and was in unambiguous plain English terms.

    This agreement was tested by almost the first client who signed it.

    That client turned up every week for thirteen weeks and consumed more than the allocated 90 min window of time allowed by the coach but failed to do any homework in between sessions and made no effort to prepare their own business plan.

    The coach, just like the coach on a playing field, was there each week, supporting from the sidelines, encouraging the client to play, but the client consumed the attention only, and failed to play the game.

    At the end of the program the client demanded a refund because they did not have a completed business plan that they were happy with, or at all.

    The client had signed the Coaching Services Agreement, in that instance in wet ink, and was bound by its terms. They had also claimed they relied on representations on the website, enabling our client to also point to the disclaimer.

    The coach was able to simply direct the client back to the plain English, unambiguous responsibilities the client had agreed to at the start of the relationship through the Coaching Services Agreement and disclaimer, and the complaint about services and demand for refund was not pursued. 

    Note that it is important you fulfil on the promises you make about the delivery of your programs.

    A 2011 Queensland QCAT series of cases involving Venzin Danielli Pty Ltd as defendant, required the coaching services provider to refund to four participants 77.5% of their program fees after the participants withdrew part way through the program for the provider’s “failure to provide the various benefits that were represented as flowing from participation in the Inspire Series program”. 

    In that case, the coaching service provider over promised and under-delivered. Make sure your advertising is accurate and does not over promise what you can deliver. 


    Australian Consumer Law Guarantees

    Before looking at case studies, it is important you know that a ‘no refunds’ policy is not supportable under Australian Consumer Law.  You CAN advise clients that a refund will not be provided if they change their mind about completing the program, there is a difference. 

    If a provider of services with a value of less than AU$40,000 does not meet the following consumer guarantees:

    • provision of services with due care and skill
    • provision of services in a timely manner
    • provision of services that are fit for purpose

    then the purchaser has a right to request a refund or replacement of the services.

    For a major fault (an irreparable fault or collection of faults that would have influenced the purchaser not to buy in the first place if they had known about those faults), the purchaser is entitled to a refund.

    High-end Coaching Programs

    High end coaching programs are often year long programs with limited places and application processes before acceptance. It is not uncommon for coaches offering high end programs to allow participants to pay by instalment over time, rather than require the full amount up front.

    So, what happens when someone gets part way through a coaching program and discovers they just do not want to finish it?

    The first risk mitigation strategy we recommend for high end coaching programs is a clear application process, including a written, signed application accepting the terms and conditions of the program, and a face-to-face interview process. Applications and interviews can be conducted electronically. Applications can be signed electronically.

    During the application process, as a coach, you can validly ask that your potential client tell you that they have considered the cost of the program and that participating in the program is not going to affect them badly financially.

    Some providers we work with may it clear that to get the most out of the program, the participant will need to have further money to invest – say in set up costs for a new business or development costs in a property purchase – and the coach will also ask for confirmation that the possible further investment is affordable for the potential client.

    CASE STUDY 2 – Refund request, or stop payment request, part way through program

    So, what do you do when you get a request for release from a program that has not been paid in full, or a refund part way through a program? This happens for our coaching clients once or twice a year. 

    When it comes to the Coaching Services Agreement, we make it clear that participation is limited, and the place purchased means someone else misses out. On that basis and taking into consideration the costs attributable to their participation, the whole of the program must be paid, whether paid by instalment or in full up front.

    We ensure the wording is very clear regarding instalments and cannot be mistaken for a monthly fee. We also suggest a provision that makes the full balance of course fees payable if an instalment is not made on time. This allows for immediate debt recovery instead of having to wait until the end of the period for payment of the instalments.

    If your Coaching Services Agreement has clear terms about the payment for a program, you will not be obliged to refund any amount received, or to forgive any payments still outstanding.

    A 2015 Victorian VCAT case of Quick Coach Pty Ltd v Papalia made it clear that return of signed terms and conditions and a deposit, together with receipt of materials, attendance at some workshops and access to a website built for the client (although not the whole of the program), were sufficient to support an order that the client pay for the program in full.  

    However, if your client is in genuine personal difficulty (such as having lost income due to a downturn resulting from COVID, or been diagnosed with cancer) then, regardless of the terms of your Coaching Services Agreement, you might consider releasing the person from the program without further payment, or partial refund of the program, or deferral of participation until a later date. Any agreement not to require full payment, or to defer participation, must be documented in a deed signed by you and the client.  

    We have assisted our coaching clients to recover unpaid fees, and have also assisted clients to prepare a deed of release of a person from their program.

    We have also had a client have to refund a portion of fees for a program where a tribunal expressed a view that the cost of the program was disproportionate to the benefits received, and where there were allegations of undue influence or high pressure sales tactics used in the sign up process. 

    PROBLEM 3 – Protecting intellectual property

    It is important to document your ideas and create tangible material as part of your programs. This can include printable materials like workbooks, or downloadable materials like PowerPoint presentations, or materials for online consumption like video or audio materials.  

    Once you have any sort of material that can be reproduced, you can protect it under copyright law. Enforcing protection of your work may require you to start legal proceedings, but if you have already included specific terms in your Coaching Services Agreement about the use of your copyright material, you can specifically include all of the materials you use in your coaching delivery. 

    Yes, someone can still take your ideas and run with them, but they won’t be able to closely copy what you have created, or you will be able to pursue them for infringement of your rights. If you can apply catch-phrases to what you have created, like Porter’s Five Forces Framework, then it can be easier to protect your ideas.

    CASE STUDY 3 – What can you do with Coaching clients, or consultants who steal your stuff?

    We had a new client who had developed and delivered a leadership program to an organisation without receiving payment of any part of the $15,000 fee up front, and without a clear agreement with the organisation. The head of the organisation refused to pay for the training delivered, rebranded the slides used in delivery of the program and started offering the program as something developed by the organisation.

    Our client did have the option to start legal proceedings to recover payment for delivering the training, and for copyright infringement but was concerned about taking action to the expense and fear that the head of organisation’s partner was also a lawyer, and the organisation would probably not incur legal fees in defending that claim.

    Unfortunately, our client decided not to take action and treated the event as an expensive lesson in business.

    How could our coaching client have done it better? Our coaching client’s position would have been stronger:

    1. with a clear Coaching Services Agreement including specific provisions regarding copyright,
    2. if a wet ink or electronic signature was required on the Coaching Services Agreement before the booking was confirmed, or the agreement included other provisions to make it binding upon receipt of payment of deposit,
    3. if the Coaching Services agreement included a specific provision limiting the number of people to receive that coaching for the specified fee,
    4. if the Coaching Services Agreement required payment up-front of expenses (travel was involved) and a deposit before delivery, and
    5. if the Coaching Services Agreement included fixed dates for payment of the balance of fees, and provision for the application of interest and recovery of costs if debt recovery had to be pursued.


    • Share a clear Coaching Services Agreement with your clients before the point of purchase
    • Ensure your agreement and advertising are consistent and accurate
    • Protect your intellectual property
    • Seek at least part payment up front
    • Ensure that payment terms are clear around the full amount to be paid, due dates for payment and any interest or acceleration of payments that apply if payments are not made when due.
    • Include a disclaimer to explain what you do not do for your clients
    • Seek applications from potential high end clients to check their ability to participate fully, and your ability to work with them.

    Need Support as a Coach?

    Would you like to improve your Coaching Services Agreement, your Online Program Terms & Conditions, your Disclaimer or  your Privacy procedures?  Make an appointment to see how we can help. 

    Legally Binding Contracts: What You Need To Know

    Legally Binding Contracts: What You Need To Know

    Legally Binding Contracts: What You Need To Know


    There is no doubt that running a business has risks. These risks may come from your employees, your contractors, your suppliers or customers.

    As a business owner, you need to take control of your business by assessing these risks and determining how to reduce these risks. One of the best ways to protect your business is to understand contracts. The terms and conditions on your website document the contract between you and every user of your website. If you don’t have any written terms and conditions, you are guessing about the agreement you have with your website users. 

    When you sell your product or services, you need a written sales contract to be certain that you are protecting your interests. If you operate an online platform to market or sell your products or services, you need a contract for use of your website (usually terms and conditions). Or, if you want to protect your confidential information such as your client list and trade secrets, then you need a confidentiality deed.

    Contracts are an essential part of all businesses as they form the basis of the majority of business relationships and transactions. It is, therefore, crucial for you to know when you do and do not have a binding contract. A binding contract is something that is legally enforceable. So for example, having fun with your friends in a pub is not going to be a binding contract, it’s going to be a bit of a joke and a bit of fun. In order to get a binding contract, you have to have all of the essential terms agreed and an intent to create legal relations. You also need to be able to give evidence of the terms of the agreement.


    We recently had a client who entered into a contra deal with another service provider, each expecting to complete between $3,000 – $5,000 of work for the other party. Our client wasn’t able to, or wasn’t prepared to trawl through historical emails to specify the details of what they had committed to provide, and they had not invoiced periodically. (An invoice with a credit applied can assist in evidencing that an agreement was made.)

    The other party provided a written engagement for services and invoiced regularly. After 12 months, the other party claimed they had received nothing from our client and took legal action to seek payment in full of their invoices. Because our client was not organised, wasn’t able to specify the agreement made or clearly identify the work produced, they ended up in a position of having to either invest in legal services to defend a court matter, or compromise the claim and pay the other party.

    A bitter pill to swallow!

    For a contract to be legally binding in Australia, it must contain at least the following elements:


    1. offer

    A contract is essentially a promise between people to do or not do certain things, and it starts with an offer.

    An offer must be clear, unambiguous, and contain the essential terms that are to be agreed upon between the parties. That might include the parties to be involved in the contract, the timing of the contract, payment terms under the contract, and any other essential terms necessary to make sense of the purpose of the contract.

    When you communicate to another person your promise, you are making an offer. For example, if you promote your services in three different packages on your website, then you are making an offer to each person who views that webpage.

    When thinking about business contracts, a company that prepares a proposal is making an offer. If the business looking at that proposal accepts it, that is the first step toward a binding contract, but if they come back and says, “we want something different,” then that offer no longer stands as the offer It’s a counteroffer and the counteroffer takes the place of the original offer.

    This will go on until the parties reach a point where there is an offer that is capable of being accepted, and that’s where you get acceptance.


    2. acceptance

    There must also be acceptance of the offer through a clear statement or conduct in response to the offer. Acceptance can be evidenced in a variety of ways, so it could simply be an email, a telephone conversation, or the signing of a formal written contract.

    For online services, acceptance will be when your customer clicks on that button that says, ‘Buy Now’. That is accepting the offer that has been made available on the website.

    Contracts are commonly accepted by signature, or by checking a box next to a statement that says you agree to the terms and conditions.  Many contracts are binding without a signature, but not all contracts can be legally binding without being signed. Contracts for the sale of land must be in writing and signed. Wills must also be in writing and signed to be enforceable without needing court intervention.

    A form of signature is preferred because even if the parties did not read the contract before signing it, their signatures indicate that they have read and understood and are bound by the terms.

    However, this does not mean that if your contract is not signed, it is not valid and therefore not enforceable. Parties can also accept the contract terms through their conduct or other circumstances. It all depends on the circumstances and intention exhibited by the parties. As long as it has been sufficiently communicated, it will be valid acceptance.

    For example, completing work referred to in the contract signals acceptance of the contract terms, and that person will be entitled to seek payment under the contract.

    A counteroffer is not acceptance, it is a new offer that needs acceptance.


    3. consideration

    A person must give some value in return for a promise to create a legally binding contract. In other words, each party must receive a benefit.  The most common form of consideration is payment in exchange for goods or services.

    With the online example, you’ve clicked the ‘Buy Now’ button. The consideration is the payment of money, and as soon as that consideration has passed, there is a binding contract in place.

    Using the example of a proposal, once the terms of the proposal are agreed and accepted by one party, either the payment of money or the start of work or both, will be consideration. The essential terms of the contract must be agreed before the point of consideration to be binding.

    So, if you ask a client to pay first and then give them terms and conditions after payment, then the terms and conditions won’t be binding because the consideration has occurred before those elements of the contract are agreed. This can be different where a deposit is conditional upon certain terms being accepted.

    Terms and conditions of a contract given to a purchaser only after the contract was formed will not be binding.


    4. Intent to create legal relations

    As entertaining as it might be to dare a friend in a pub to do something, if they do it, your payment to them is only enforceable based on your goodwill and is not legally enforceable.

    This is different to a restaurant promising that a huge meal is free if you can eat it all. That can be enforceable because the restaurant intends people to rely upon that promise in ordering the meal in the first place.

      other elements of a binding contract

      Aspects of contracts that can affect whether or not a contract is binding include capacity, mistake, illegal intent, fraud, misrepresentation, duress or no intent to create a legal contract.



      Capacity is whether somebody has the legal capacity to make a contract. Only an adult can enter into a contract; that is somebody over the age of 18 years. A person under 18 years does not have legal capacity to form a binding contract.

      A person with a disability or an older person who has lost capacity through dementia or Alzheimer’s disease may not have capacity to make a contract, or may have only intermittent capacity.



      A mistake in a contract can sometimes invalidate a contract. Typographical errors are generally not fatal mistakes.

      Usually, a party will be bound by the documents they signed, whether or not they’ve read or understood them. However, where a party signs a contract that they fundamentally believe to be something different to what it is, this may be a mistake sufficient to affect the binding nature of the contract. For example, if a person believes that they are purchasing a copyright work (say a painting) where in fact, what they’re signing is only a limited license to use that copyright work for a limited purpose (hanging  the painting in their office). In those circumstances, there is quite a significant difference between what the first person understands they are paying for, and what they are actually getting under the contract.

      That may give rise to a doctrine of what’s called a non est factum, which means, ‘it’s not my deed’ or ‘it’s not my contract’ or ‘I didn’t agree to this’. It is very rare to argue this type of mistake.

      There are other types of mistakes, for example, one party could be mistaken about what it is they are buying. A party might think they are buying a website with all the existing content and so on, where in fact, what they’ve done is entered into a contract to buy a domain name.

      Now, it is likely that the seller in that circumstance knows that they are only selling a domain name and they probably have a level of awareness that the purchaser is mistaken as to what they are actually getting.

      In those circumstances the purchaser may not be able to end the contract, there might not be a remedy under contract law or common law, but there may be a remedy in equity. In equity, the party who knew the other party was mistaken as to what was involved in the contract, may be required to allow the other party to revoke the contract or to have rectification of the contract.

      Rectification is amendment to the contract to make it reflect what was understood to be the terms of the contract. Occasionally, both parties to a contract have mistaken some aspect of the contract, but different aspects.

      There have been some recent cases in Queensland regarding property development, where two parties to a development contract had different understandings of different aspects of the contract and they were ventilated when it went to court. Again, it is rare to have a circumstance where there is a unilateral mistake by both parties about different issues to the contract.

      A common mistake is where both parties are mistaken about something to do with the contract. A good example is where both parties think a description of a property refers to a visual address they agree upon, only to find in a property title search that the property they thought they were transacting is the property next door.

      For online content, the contracting parties might both think that the website is built with a particular programming language, for example, HTML, when it is built on a different system or with different programming language.

      Where there is common mistake, all party’s expectations around the contract are altered because something has risen that none of them were aware of when they first went into the contract. Again, the remedy is more likely to be an equity in terms of a rescission of contract or rectification of the contract, rather than a specific ability to terminate the contract. However, if all parties are mistaken and they have a mutual agreement to end the contract, then that is not a problem at all. It is only a problem when the parties are in dispute.


      illegal purpose

      Another aspect that will affect the binding nature or enforceability of a contract is whether or not it’s for an illegal purpose. A contract for the purpose of committing a crime is not enforceable. There are differences in criminal law in the different states and territories of Australia.  There are also proposed changes around Australia regarding slavery laws at the moment.

      Consider modern slavery, such as people immigrating from overseas and then having their passports taken from them and essentially going into indentured labor services. An offer to find work for someone in exchange for their payment to get help in immigrating will not be enforceable if it results in indentured labor.


      fraud or misrepresentation

      If there is misrepresentation or fraud before the contract is made, which influences one party to enter into the contract, then the contract may be challenged. Fraud is a deliberate untruth that can be relied upon to void a contract. Misrepresentation is something less.

      Consider an IT Service Provider. They say that they will be able to provide you a secure computer system and a phone system (being very simplistic, obviously), for a set monthly fee and an installation cost. Then you find out halfway through installation that it simply will not work with your existing systems, unless additional products or services are purchased, or there is some variation to what needs to be done.

      This may be misrepresentation, particularly if you have asked the service provider to review what your requirements are and tender on that basis, then you have accepted the tender and they can’t deliver what they said they would deliver. A remedy for misrepresentation is likely to be damages.



      Coercive control is a form of domestic violence that is very topical at the moment, and difficult for the legal system to articulate. Duress or coercive control is putting someone in a position where they feel they have no choice but to enter into the agreement.

      In a business situation, holding up payment pending an agreement can be a form of duress if the party withholding payment knows that it will have an adverse effect on the party due to be paid, and they intend to use that as leverage for future negotiations. It is effectively holding the company that is owed money to ransom for money it is already owed.

      Although the creditor company might have remedies in terms of taking the debtor to court for recovery of payment, the time involved in recovering that payment may be sufficient to effectively put the creditor out of business without the payment due being received.

      A threat can also form duress, unless there is a term of the contract that was agreed which supports it. “If you don’t sack that person, we will terminate this contract” is a threat unless the contract includes a provision that you can require the contractor to replace people if you are not happy with them.


      spoken contracts, or partly spoken and partly written

      An oral contract can also be valid and enforceable. A contract can be partly written, partly verbal and partly included in an exchange of emails. [https://onyx.legal/articles/contract-dont-have-to-be-in-writing/]

      For this reason, you need to be aware of when you’re making promises to other people and when you might be creating binding contracts, whether you intended to or not. Having a formally written contract with signatures on it is proof of the contract that was agreed. The documentation is not what is required to make it binding.

      Evidence obviously becomes an issue when contracts are oral. That is when disputes end up in courts, with different people claiming perfect, and differing, recollection of what was agreed.


      contracts and deeds are different things

      There is a difference between deeds and contracts. Contracts need consideration, which is the doing or giving of something in exchange for understanding that the other party to the contract or the other parties to the contract have obligations that they will fulfill in exchange.

      A deed is binding without consideration, and as a result, there are specific rules around the signing of a deed before it can become binding.  



      Once a contract is formed, the nature of the remedy depends upon the nature of the problem in the contract and can include a variety of remedies from voiding the contract from the beginning through to payment of damages, specific performance, damages for losses occurring within the contract and so on. These all depend on the terms of the contract agreed between the parties.

      Want more information?

      We love writing contracts. Especially contracts you understand, so that your customers understand them too. Keep it simple. Let us know what contracts you would like to put in place in your business by booking an appointment