CLAYTON UTZ partner, Nick Miller, has warned prospective business owners, particularly franchisees, to make sure they have done their homework thoroughly before signing a contract.
He said that purchasers of business or property had relied on alleging misleading or deceptive conduct by a vendor in breach of s 52 of the Trade Practices Act as a remedy, recent court cases have suggested this can’t be taken for granted. The recent decision of the Full Federal Court in Poulet Frais v The Silver Fox, which concerned alleged misleading and deceptive conduct on the part of the franchiser in regards to the turnover of a Lenard’s Poultry store highlights this. The court found that “no reasonable person who had read and considered the whole of the material provided … could have been under any illusion that … any particular weekly level of gross sales would be achieved”.
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