In a recent Federal Court ruling, Honda Australia Pty Ltd faced hefty penalties of $6 million for engaging in misleading and deceptive conduct.  It involved Honda’s false representations made to customers of three formerly authorized dealerships, saying that the latter would close or had closed and would no longer service Honda vehicles, when in fact, the dealerships continued to operate independent service centres. The consequences of Honda Australia's actions extend beyond ...

BACKGROUND The recent New South Wales Supreme Court case Lee v ATL (Australia) Pty Ltd [2023] NSWCA 327 found that a guarantor was not liable to a lender under a loan deed where that deed had been amended by a side letter between the borrower and the lender which did not include the guarantor. The Court found that the guarantor was not liable to the lender at all. TAKEAWAY If a franchisor is agreeing to vary the terms of a franchise agreement or related document, it should ensure that the...

The ACCC issued a report in December 2023 called “Unfair Contract Terms in Franchise Agreements – Key Findings of Targeted Compliance Checks on Franchisors”. You can find the report here. An important disclosure in the report was that the ACCC stated that: “We consider that the franchising sector is on notice regarding the ACCC’s views about UCTs in franchise agreements.” The ACCC gave the following tips when reviewing their contracts: 1.  &nb...