Business Advisory Services

Running a business is difficult and not having appropriate, up to date contracts in place can be a risk.

Businesses go through various stages of their life cycle, particularly from start-up to expansion and at the crossroads. Perhaps there are issues dealing with internal ownership difficulties which may be a trigger to review the company’s legal contracts and arrangements. Changes in the marketplace, or seeking a new direction, or even exiting can be other events triggering the need to review legal issues.

If you are looking for a commercial lawyer in Sydney, or for further information in relation to your Business Advisory needs, please do not hesitate to contact any member of our Commercial Law Team.

I have a question about:

  • What is a business legal health check?

    The strength and value of your business is significantly affected by contracts you have in place. Within certain industries such as Medical Technology, this is even more crucial, given the constant development of new products, on-going regulatory changes and the need to be innovative. This requires strong, robust contracts to protect your IP and business reputation.

    There is also the ever-present risk to business owners in their personal capacity, as directors, to ensure that they are doing all things in their capacity to protect the interests of shareholders.

    Just as we all see the doctor from time to time for a general health check, it is good business practice to have your company’s legal arrangements reviewed to ensure everything is in order. When was the last time you reviewed your contracts? This can include:

    • Employment contracts
    • Post-employment obligations
    • Leasing agreements
    • Supplier agreements and supplier due diligence
    • IP checks
    • Shareholder agreements
    • Director duties
    • Super funds

    The AV Business Advisory Team offers complementary Business Health-Checks – where we meet with you to check the ‘well-being’ of your business by conducting an audit on your major contracts. We help ensure that you have planned for future liabilities and responsibilities, implemented the appropriate mechanisms to mitigate risk, and that you have in place contracts which do what they were intended to do, within the bounds of current legislation, and without exposing your company unnecessarily.

    Where there is a clear gap in your legal arrangements, or where we identify legislative changes which may not have been addressed in your legal documentation as they currently stand, we can provide a fixed fee quote to you to address each of the issues raised, and roll out the updates and changes over a timeframe which you can audit which is realistic, starting with the most urgent and serious risk factors first.

    One of the features which makes our service unique is that we offer an interdisciplinary approach, consisting of lawyers with backgrounds in commercial, property, litigation and employment. So we can provide rounded advice that takes into account all of the relevant considerations and potential outcomes.

    Contract Health-checks include the following areas:

    • Trademark Applications
    • Director’s Duties
    • Employment Law
    • Logistics Agreements
    • Warranty Claims
    • Code of Conduct
    • Supplier Agreements
    • Australian Consumer Law
    • Distribution Agreements
    • Statutory & Regulatory Compliance
    • Product Litigation
    • Trading Terms & Agreements
    • Code Compliance
    • Intellectual Property
    • Mergers & Acquisitions
    • Leasing Agreements
  • Corporate Governance and Corporations Law

    Corporate governance describes the principles and practices adopted by a company to ensure sound management of the company within the letter and spirit of the law. It affects and defines the relationships between the board, management and auditors, and includes obligations of the board and management to manage the company so as to protect and enhance shareholder wealth as well as meet the company’s obligations to all parties with which it interacts.

    We have an understanding of and commitment to the outcomes of corporate practices rather than simply focusing on the process of compliance. We recognise that corporate practice does not simply involve compliance but also performance.  As well, responsibility for corporate activities is not confined to directors and extends beyond the board of directors to individual directors, executives, officers and employees of a corporation.

    The Corporations Act sets out stringent requirements for the management of companies in Australia. Directors have an obligation to be fully aware of the major issues and financial management decisions of the company due to the personal liabilities which can attach to them where the company does not comply with its legal obligations. The Act also provides remedies for minority shareholders whose interests are being prejudiced by the actions of the majority.

    We assist our clients with:

    • incorporation, including drafting and amending company constitutions
    • ownership structures such as disposal and/or acquisition of shares
    • corporate governance, including the role and rights of shareholders, members, directors and creditors
    • compliance with reporting and other requirements
    • compliance with and training in relation to directors’ duties
    • compliance with fundraising requirements, such as disclosure
    • insolvency and external administration, such as voluntary administration
  • Liquor Licences

    In NSW the sale of alcohol at licensed premises is regulated by both the Liquor Act 1982 (NSW) and the Registered Clubs Act 1976 (NSW).

    Formal proceedings for a breach of the liquor laws can be brought before NSW Courts in the form of either an ‘information’ or a ‘complaint’. An information is distinguished from a complaint in that the former refers to criminal conduct whereas the latter is of a civil disciplinary nature. Although no criminal conviction is recorded as a result of a complaint being lodged, enforcement action of this type can have a significant impact on licensed premises because the Licensing Court has the power to place conditions on the licence which can restrict trading.

    Information can be laid before the Licensing Court or Local Courts by an informant in person, or by his or her counsel, attorney, or another authorised person and is disposed of summarily by the Court. Specific penalties are stipulated for each offence (generally a monetary penalty) but additional penalties for offences can also be imposed by the Licensing Court.

    Applying for a liquor licence through the Liquor Administration Board requires advice around the changing laws on liquor licensing and related planning laws to which hoteliers, clubs and other clients need to adhere. We can also assist on related planning applications for variation of hours of operation and licence conditions, approval of management arrangements, applications for the grant of new licences and for the transfer of existing licences.

    One of our Senior Lawyers, Guy Vinden, is himself a vigneron with a Cellar Door, and is very familiar with the legislation first hand in the conduct of his winery Vinden Estate at Pokolbin, NSW. For this reason, over the years we have assisted many wine growers and registered Clubs with all of their liquor licensing needs. We also assist restaurants and other hospitality outlets with licensing issues.

  • Planning and Environmental Law

    Atkinson Vinden Lawyers are skilled in the area of planning and environmental law, including issues dealing with local councils, private instruments affecting land, conditions of development consent, appeals to the Land & Environment Court, building and compliance certificates and all advice relating to NSW planning laws and State environmental planning policies.

    In the past we have assisted Local Councils, and at present we act for many property developers, helping them to navigate the often complex world of planning regulations, right through the building and sale process.

    It is important to address these planning issues at the earliest available opportunity in order to avoid enforcement action from a local council or from a third party such as a neighbour.  Notably in NSW any person may bring proceedings in the Land & Environment Court to restrain a breach of a development consent.  This is known as ‘open standing’.

    We can provide advice on objecting to development that may have a detrimental impact on property and we have an in depth knowledge of the decision making process.  Often our clients’ interests can be furthered by a freedom of information application to obtain certain documents such as council reports and we can provide advice on how to structure a development application.

  • Trade Practices and Consumer Protection

    Atkinson Vinden is frequently called on to advise our business clients on the application of the Australian Consumer Law (ACL), in particular around Consumer Protection provisions.

    This is particularly important for clients who have a standard form contract, which, if improperly drafted, can result in a breach of the ACL.

    The first point for most clients is understanding what a “consumer” is. This is generally a point of some confusion, as the ACL’s definition of a consumer goes beyond what most people would expect.

    Generally a consumer is anyone (whether an individual, company or any other legal entity), who:

    • Acquires goods/services for $40,000 or less; or
    • Purchases goods/services for more than $40,000 where those goods/services are of a kind ordinarily acquired for personal, domestic or household use or consumption; or
    • The goods consist of a vehicle or trailer acquired principally for the transport of goods on public roads

    However this does not generally apply if the goods were acquired for the purpose of resupply, or being used or transformed in a process of manufacture or repairing other goods.

    It is important to note, however, that in some circumstances a manufacturer (which can include an importer) can be found liable for breaches of consumer guarantees, despite the fact they sold goods to a reseller, who then on sold them to a consumer.

    The next issue to be aware of is what guarantees are available to Consumers under the ACL.

    Amongst others the ACL implies the following guarantees in relation to any supply of goods or services to a Consumer:

    • Guarantee as to ownership of the goods;
    • Guarantee as to acceptable quality;
    • Guarantee as to fitness for purpose;
    • Guarantee that goods will match a description and/or sample;
    • Guarantee as to repairs and spare parts;
    • Guarantee that services will be provided with due care and skill.

    It is the guarantee of acceptable quality that most often causes issues, as it basically implies that goods will be as durable, safe, acceptable, fit for purpose and free from defects as a reasonable person would expect. This applies regardless of any warranty provided in relation to the goods and does not have a specific timeframe for effect.

    It is also important to note that the above guarantees cannot be excluded by contract (and attempting to do so may result in a fine), though for certain non-personal goods a supplier’s liability can be limited.

    What this generally means for our clients is that they must carefully review their contracts to ensure that they allow for the existence of the above guarantees and, importantly, that our clients are aware that the above may apply, regardless of the terms of their contracts or any warranty.

  • Product Liability Law

    Atkinson Vinden is proud to act for many businesses involved in the importation, manufacture, and supply of goods. One particular industry we have many clients in is Life Sciences and Health Care (including medical technology and pharmaceutical), but we also assist clients in industrial manufacturing, beverages, fresh produce and packaged foods, and many others.

    One of the greatest areas of risk to any manufacturer of goods relates to the safety of those goods. Any safety defects will require a careful, considered response, which should incorporate advice from professional advisers such as your public relations advisers, accountants and solicitors.

    However, even before a safety defect situation arises, it is vitally important that any manufacturer be aware of their responsibilities when it comes to product safety as the Australian Consumer Law (ACL) subjects manufacturers to a number of obligations in this regard.

    Firstly, it is important to know what constitutes a manufacturer. The ACL defines a manufacturer fairly broadly, as any entity which:

    • Grows, extracts, produces or assembles goods;
    • Holds itself out (or allows another to hold themselves out) as the manufacturer;
    • Allows their name, brand or mark to be applied to goods;
    • Imports goods into Australia, so long as the actual manufacturer does not, at that time, have a place of business in Australia; and
    • Does not respond to a request for the identity of the manufacturer of goods sold by that entity.

    This encompasses a broad group of businesses, many of which would not ordinarily consider themselves to be the “manufacturer” of goods.

    If you are a manufacturer, then your obligations under the ACL include the obligations to:

    • comply with any safety standard in relation to the goods;
    • avoid supplying any goods which do not comply with any safety standards;
    • comply with any governmental bans on the supply of certain types of goods;
    • comply with any government mandated recalls;
    • give notice to the government of any voluntary recall of goods within 2 days of taking action;
    • report, within 2 days, any incident where your goods have caused either death or serious injury or illness, or where any person suspects or alleges that is the case.
  • Contracts

    Properly worded contracts provide certainty and control.  They ensure that when parties enter into a commercial arrangement, the rules are clearly set regarding who is responsible for what. They also provide something of an insurance policy, in that they should also set out what happens when problems arise, whether that be performance issues by one of the parties involved, or where something unexpected happens that takes everyone by surprise.

    The Problem with Verbal Contracts

    Many business take unnecessary risks when it comes to documenting their arrangements. Often agreements are done by handshake, which is all very well when things go as planned. We often see this with start up businesses – people want to show their trustworthiness by no requiring legal documentation. The problem with verbal agreements is that often when differences of opinion arise later on, people’s recollections of what was agreed to often vary considerably. Having an agreement properly documented avoids legal disputes down the track because, if the document is well prepared, most potential future problems have been identified and provided for in a clear way.
    Verbal contracts will not usually contemplate a variety of terms and conditions that will be found in almost every professionally drafted contract. For example:

    • While in some cases legislation implies warranties into a contract for the supply of goods and services, these generally only apply if the price is less than a set amount, or the goods are not provided for re-supply. As such if you are buying a large piece of machinery, or equipment to be on-sold you will likely have limited recourse against the supplier unless a properly drafted warranty is in place.
    • A well drafted indemnity clause takes into account the ability of each party to control the risk of any loss or damage and apportions the liability for that risk accordingly. If this has not been considered and put into writing you may find yourself open to liability over which you have limited or no control.
    • While we all hope that our contractual relations go smoothly, with a satisfactory outcome for everyone, the simple fact is that this does not always happen, just ask our litigation team. In such a case it is advantageous to have in place an agreed process for discussing and resolving any disputes, including requiring mediation. Without such your only option may be costly litigation where you could wind up having little or no say in the outcome.

    Understanding the terms of a Contract

    It sounds trite, but often we see disputes arise in circumstances where one party failed to fully comprehend the meaning of a contractual term.
    When entering into a contract, consider carefully what you are hoping to achieve from it.  You will have in mind some specific targets, perhaps regarding time of delivery, or quality of product or work.  Be specific about these terms, and satisfy yourself that they are clearly and properly expressed in the contract.
    The other party to the contract will also have specific targets in mind when contracting with you.  These are the terms you need to be most careful of, as they will inevitably favour the other party, potentially to your detriment.  As tedious as it might be, you must discipline yourself to consider these terms carefully and satisfy yourself that you understand the impact and effect of these terms to the same level of clarity and detail that you would insist upon for the terms that favour you.
    The only airtight answer to this issue is to seek legal advice on the terms. When presented with a contract, discipline yourself to sit down and read each clause one by one.

    Ambiguity in the wording of Contracts

    The worst disputes tend to occur in circumstances where a contract has been drafted with such ambiguity that it can be interpreted in two different ways. Where the interpretation results in a significant difference to the rights and liabilities of the parties, one way or another, disputes are likely to arise.  Inevitably each party will adopt the interpretation that most favours them. The problem with such a dispute is that where genuine ambiguity exists, until the court makes a ruling on the point, there can be no absolute certainty as to which interpretation is the correct one.  The potential for this to lead to wasted legal costs is almost limitless.
    We usually see ambiguity arise in contracts drafted by people without legal training (although lawyers have been known to mess this up as well!).  We have a range of contracts drafted for all types of commercial transactions which have been ‘battle tested’ (upheld in court), and can provide them for a reasonable cost.

    Be aware of the consequences of not properly documenting an agreement

    In determining how closely you need to scrutinize a contact before signing it, you need to have an appreciation for the potential consequences of stuffing the contract up.  Most serious commercial contracts will cause significant loss to one party if the other does not properly abide by its obligations.  For example, if you supply goods to someone who runs a business of selling them to consumers, you can expect any dispute over the contract to include a ‘loss of business’ component, which in the right circumstances can be shockingly high.
    Before entering into a contract, consider the worst-case scenario mess-up.  If the worst-case scenario is something that your business cannot afford to occur, it is probably worth speaking with lawyers to confirm the terms of the contract, and to ensure that your interests are protected.

    Unfair Contracts

    In 2010 the Commonwealth Government passes the Competition and Consumer Act, which largely replaced the Trade Practices Act. Amongst other things, this introduced the concept of Unfair Terms in consumer contracts and when these might be found to be void. In 2016 these unfair contract laws extended to many small business contracts.
    A small business contract is any contract which satisfies all of the following conditions:

    1. The contract is for a financial product, supply of financial services, supply of goods or services, or the sale or grant of an interest in land;

    2. At the date of the contract at least one of the parties employed fewer than 20 persons (which, in certain circumstances, may include casual employees); and

    3. Either of the following apply:

    • The upfront price under the contract is not more than $300,000; or
    • If the contract is to last for longer than 12 months, the upfront price payable is not more than $1,000,000.

    A term of a contract is unfair if:

    1. It would create an imbalance between the parties;

    2. It is not reasonably necessary to protect the legitimate interests of the party advantaged by the clause; and

    3. It would cause detriment to a party if the clause was relied on.

    The legislation also provides some guidance as to what type of terms might be unfair (e.g. granting one party unilateral rights to vary the contract, allowing one party but not the other to cancel the contract).
    Of course, just because a clause falls within one of the examples in the legislation does not mean it will be unfair. Conversely, there have been cases where clauses have been found to be unfair, even though they are of a type not described in the legislation.
    It is important to note some points regarding unfair terms:

    1. A term being found to be unfair does not automatically invalidate a contract. If the contract is capable of being enforced without the clause then the remaining provisions stay in effect.

    2. Certain terms are not capable of being unfair, including those which describe the subject matter of the contract (for example the amount being paid, or the goods being bought).

    3. It is preferable to have a balanced, fair term in your contract, which can provide you with some protection, rather than a one sided term, which may be completely struck out.

    4. The legislation will not apply to contracts entered into prior to the protections coming into effect, however it will apply to any renewal or variations of such contract.

    5. Only a small business, or the regulator, can seek to rely on these protections. A “Big Business” party to a small business contract does not gain the protections of the legislation.

    Our expertise in this area

    We have decades of experience drafting commercial contracts in a range of commercial contexts, for both small and big business. We have developed advanced templates which ensure that all of the key issues ever likely to arise have been taken into account. We make it our business to listen carefully to our clients to understand the nature of the business because without understanding the business and industry in which it will operate, it is impossible for the drafter of the contract to protect against all of the relevant risks.
    We often assist clients with the negotiation of contracts. The parties themselves will know the effect of what they hope to achieve in their agreement, but perhaps lack the legal understanding to create and negotiate a contract that achieves those outcomes. We can assist you in negotiating the terms of an agreement with the other party or their lawyers, to ensure a fair agreement that deals reasonably with the circumstances, and which is enforceable in circumstances where the other party is in breach.
    We provide comprehensive agreements dealing with:

    • Confidentiality, Distribution and Supply
    • Partnerships and Joint Ventures
    • Shareholders and Unit-Holders
    • Building and Major Projects
    • Buy/Sell and Exit Agreements

    We also have many years experience in the litigation of contracts, so that if something goes wrong, and the other party breaches the agreement, we can provide strong representation to ensure that you receive what you are entitled to under the contract.