Lessons from the Julstar decision and government position on penalties for Franchising Code breaches
By Rebecca Bedford, Kate Watts and Ben Dodgshun
The decision in Julstar Pty Ltd v Hart Trading Pty Ltd highlights the importance of exercising caution in making pre-contractual representations and documenting those representations prior to entering into an agreement. The failure to do so in this case meant that the court had to decide between conflicting oral accounts and contextual circumstances years after the alleged events and also meant that the case was more expensive and time consuming to run than it otherwise would have been.
Most franchisors have streamlined their processes, so that all information relating to the franchise is contained in writing, including in disclosure documents. However, when oral discussions with franchisees take place, it is important that those discussions are documented (if possible). Similarly, discussions between incoming and outgoing franchisees (which have the potential, as in Julstar, to widen to include the franchisor) should ideally be documented. In the absence of contemporaneous written material, disputes between franchising parties, which often arise years after discussions have taken place, will depend on memories of events that have understandably faded. The outcome of disputes that turn on oral evidence can be difficult to predict, and these cases are often more difficult to settle as a result. If not avoided altogether, the time and costs associated with a dispute can be significantly reduced if contemporaneous written notes are made of any pre-contractual discussions between the parties…
If you are registered and logged in to the site, click on the link below to read the rest of the Minter Ellison briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Minter Ellison
News from The Lawyer
Briefings from Minter Ellison
On 19 January 2015, the Ministry of Commerce (MOFCOM) published the draft PRC Foreign Investment Law (the ‘Draft’) along with an explanation paper, and called for opinions from the public.
This briefing sets out some high level issues to consider on a global M&A deal where the target is an Australian company or business or where downstream Australian subsidiaries are involved.