BUSINESSES AND THE LAW: Managing Change

Usually, the law changes at a much slower pace than other features of the business environment. Every now and then, a truly revolutionary change can occur in the legal sphere...


Whenever the law does change, however, be it in a large or small way, businesses may need to change their practices and procedures to comply with the changed law. Apart from changes to existing laws, the government introduces new laws all the time, to cover new activities.

Businesses are starting to use drones to make deliveries to customers. Driverless cars and buses are under development. An Italian company has just developed a round rolling robot suitcase that can guide its owner through an airport using GPS while holding 18 kilos of contents.

Will new regulations be created to deal with these things? How will those new laws impact the activities of businesses?

Keeping up to date with legal changes
How does your business stay up to date with legal changes? If, like most people, the only contact you have with a lawyer is when you need one to solve a problem, then you may not be learning about legal changes directly from lawyers. The news media can be a good source of information, but it can be sheer luck whether any change is reported in a way that you will notice.

Some government departments embark on advertising campaigns to publicise changes in the law. Another source of information is industry associations and chambers of commerce, which have websites and distribute newsletters. But, if you are too busy to spend time studying these sources, important changes to the law may escape your notice at the time you most need to see that information.

Recently, I saw a commercial lease that referred to the Sale of Goods Act of a particular State. That reference was out of date, quite badly. The Sale of Goods Acts were replaced in each State in about the 1980s by the Fair Trading Acts, which, as mentioned above, were replaced in 2010 by the ACL.

How amazing then that in 2017 we can find a new tenant being handed a lease by a real estate agent that has a reference to an Act that dates to 1895.

This story illustrates a common issue: many standard documents are never reviewed. Errors creep in, sometimes because of poor editing, and are never picked up. Does it matter?

It might. If you get into a dispute over your lease with your landlord and it just so happens that the clause that you are arguing about refers to the Sale of Goods Act, what will happen?

Things to do

The problem is: how to keep up with legal changes and know what to do in response.

Here are some suggestions:

  • Use email to receive news and alerts. Why not subscribe to a legal newsletter? Many lawyers, including me, publish a regular email newsletter filled with useful information. Some websites alert subscribers to updates about particular laws or areas of law. If you operate in an industry that is controlled by a particular law, this would be a good idea.
  • Check your documents carefully. Is your business is relying heavily on certain key legal documents, such as a lease, your terms and conditions, or an employment agreement template? Go over those documents with acritical eye to see if there are any problems you haven’t noticed before.
  • Get expert assistance when it counts. I estimate that only a very small proportion of business owners ever ask lawyers to review agreements and leases before they sign them. If there is a glaring mistake in a template document, like a reference to a law that went out of operation over 20 years ago, then the chances are that no lawyer has been asked to check that document for a long time. Why take a risk with something as important as the lease that allows you to stay in your business premises? Ask an expert to check the document for you.

It is important to do something proactively to monitor and implement changes in the law that affect your business. Doing nothing and hoping for the best is probably not a good approach.

Breaches of the law can attract investigation and prosecution by authorities, and can form the basis for civil lawsuits by private persons. If any particular law seriously impacts your business, find a way to learn about any important changes in that law when they happen so you can take whatever steps are required to comply with those changes sooner rather than later.

James Irving is a business lawyer in Perth who has both franchisees and franchisors as clients. Visit the Irving Law website <http://irvinglaw.com.au > for more information about James and his areas of practice.