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Businesses warned not to rely on TPA

user iconLawyers Weekly 02 September 2005 NewLaw

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…

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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