Is my email a binding Contract?

It is a surprise to many of our clients that the exchange of emails can constitute a binding Contract. The courts are frequently holding people to these Contracts and it is a topic that requires some careful consideration in times where email is the dominant method of communication. Stodgy old paper Agreements with a lengthy witnessing clause might get left on the desk when parties are talking. However, if there is sufficient dialogue and certainty of terms by email, that may be enough to create a legally binding agreement. When parties are negotiating it is a real danger time and there are some rules that should be followed during those exchanges. Although the Courts are often perceived as being backwards in regards to technology, they have in fact responded to this shift in communication by accepting email as a means of creating binding agreements. Not all business managers have caught up with this trend and are regularly placing their company at risk.  It is a mistake to believe that what is said or agreed over email is not binding, and that a legally binding contract is only made when a formal written document is signed. Take a look at some recent cases with us and let us know if you have a similar issue in your business. EMAIL NEGOTIATIONS – BINDING OR NOT? If you have started to negotiate by email but don’t want your emails to be a binding contract, then you must clearly state in your emails that “no binding agreement is formed unless and until a formal contract has been executed”. If you don’t expressly state...

Timing is everything securing rights under PPSA

The significance of timely registration of security interests under the Personal Property and Securities Act (PPSA) has been delivered in the recent case of Relux Commercial Pty Ltd (in liq) v Doka Formwork Pty Ltd. The case required consideration of Section 588FL of the Corporations Act. Section 588FL provides that certain security interests under the PPSA not registered on the Personal Property and Securities Register (PPSR) within a certain period vest in the company that is being wound up. This case involved the following facts. Relux rented formwork equipment from Doka Formwork Pty Ltd (Doka) and operated a formwork construction business. Relux Commercial Pty Ltd (In Liquidation) (Relux) appointed administrators on 7 April 2014, and had possession of the formwork equipment. The administrators were appointed liquidators on 16 May 2014 at a creditors meeting. From March 2013 Doka leased the formwork equipment to Relux for indefinite periods. But, only on 20 February 2014 did Doka register a PPSR security interest. Formwork equipment was provided to Relux in 2013, while some had been leased in February and March 2014. The liquidators applied to the court for a decision on who had superior rights and interest in the formwork equipment. His Honour determined that Doka’s leases were ‘PPS leases’ under Section 13 of the PPSA because they were for indefinite periods, and Doka’s business leased such goods to the public. His Honour then considered the Corporations Act, Section 588FL, regarding the timing of Doka’s registration. Section 588FL provides a PPSA security interest vests in a company where, at the time of administration or liquidation: (a) The security interest is enforceable against third...

New Crilly Lawyers Client Survey

Apart from wishing everybody an early Merry Christmas and Prosperous New Year, we would like to take this opportunity to invite you to complete a short survey.   We think that it is more important than ever that we canvas your views on the types of services that you want and your attitude to risk and value. Even though we have a detailed knowledge in the law, it is the specific tailoring of your requirements within that framework that we really want to target. As an example, we have moved far more towards a fixed fee for a set list of deliverable items as a scope of work. This makes it easier for us to identify the limits of the instruction and for our clients to understand exactly what it is they can achieve as an outcome. Ask us about our fixed fee client agreement and please complete the below survey which should really only take about two minutes of your time. Note that the first four surveys will get a free bottle of French champagne as a bonus. Thanks very much, we look forward to the opportunity to act of your behalf.   Please take the time to complete our survey below, we would love to hear from you https://www.surveymonkey.com/s/CrillySurvey...

Revenue Law Changes 2015

It is amazing to see how the tax and stamp duty implications of a proposed transaction change the outcome for clients. We have done a lot of work in conjunction with some strategic accounting firms in structuring a business or a transaction for a change in ownership in a way that optimises the interests of all parties. The key point here is to have the original plan in an open discussion with a strategic advice to identify potential options open to the parties, before they sign any transaction documents.   Enormous financial benefit can be achieved both in the short and the long term if clients stop and explore these options first. We are constantly amazed at the potential advantages that clients can achieve by just taking the time to consider alternatives to a proposed transaction and their individual tax circumstances. If you are thinking of a change of ownership or structure in your business, make sure you give us a call first in plenty of time so that the revenue aspects are...

Changes to Property Law for 2015

There are significant changes commencing on 1 December 2014 which effect all property contracts and appointment of agents. The simple solution is to always check any documents before you sign. Everyone must be diligent in making sure that the regulations are complied with otherwise you cannot assume that a transaction will complete as expected. Given the size of the average property transaction it is highly beneficial to have at least 30 minutes of professional advice before proceeding. We are very happy to review contract prior to execution and give advice about the terms. Our view is by adding a simple but clear Special Condition an enormous amount of heartache can be saved at the pointy end of the...

Business Succession and Property

Each business will have its unique requirements. I assisted some clients in relation to a business succession agreement for four partners in a successful business. At the time of formation of the original business entity, there was a simple husband and wife team. Over the years, the business grew. They were joined by their management executive and they sold shares in the company as a result. The business expanded again and they sold a further tranche of shares to another key management person. During the expansion phase they also had the opportunity to purchase the business real property from which the business was conducted. As it was around the time of the last manager’s buy in, he could not afford to purchase an interest in the property as well. So the end reality was four business owners and three property owners. They acquired the property in a separate family discretionary trust as tenants in common in one-third shares each. A commercial lease was established between the business trading entity and the three trusts as owners of the property. All simple so far… The question arose as to how to deal with the property interests upon death of a principal in the business. It is a simple matter for the one that did not buy in, as it is simply the value of his interest in the shares of the trading entity. However, when it comes to the buy/sell agreement for the three that have an interest in the property, this was a completely different matter. The issues are Does the deceased business owner need a continuing interest in the...