What is Commercial Law In Australia? History and Practice Areas

The business and commercial sectors are really vast and rapidly growing. As this sector expands itself, so do the laws related to it. Whenever we start a business, sign agreements, or make transactions, we first look into the policies that regulate these things to become familiar with the law and work according to it.

Australian commercial law is very complex to understand. As it involves all the factors related to your business, it is important to understand the basics of the law to ensure that you are proceeding in the right direction. These laws are meant to protect you from potential damages and fraud.

In this blog, I’ll explain the history of Australia’s commercial law and its practice areas to familiarise you. Moreover, reading this blog will give you insight into the current historical background of the law in Australia. Read the blog and become aware of Australian business and commercial law.

History of Commercial Law In Australia

At the time of the Federation in 1901, the constitution of Australia gave limited corporate powers to the parliament. Every state had the residual power to control matters outside the jurisdiction of the Commonwealth. It was observed that companies operating beyond one state face many legal problems and extra costs because of the legislative differences between the states.

By 1962, all the state and Commonwealth governments had worked together to make a standard national company code that was implemented by law in every jurisdiction. Although this law was practical, it didn’t seem to work in the long term as it didn’t allow for its revision. It was applicable only when the government or policies remained consistent with changes in existing governments and each state developed its own independent laws once again.

The High Court ruled that the states, territories, and Commonwealth’s attempt at a complex cross-vesting arrangement was unlawful. According to Strickland v. Rocla Concrete Pipes Ltd. (1971) opinion, legislation sufficiently related to constitutional firms’ business activities is legitimate.

Let’s learn more about the amendments in the Australian commercial law.

By 1962, every state and the Commonwealth had worked together to create a standard national business code that was enacted into law in every jurisdiction. The problem with this plan was that it needed consistency in revising the rules, and when government and policy changed, each state’s laws once again developed independently. The High Court declared this effort at a convoluted cross-vesting agreement by the states, territories, and Commonwealth illegal. The ruling in Strickland v. Rocla Concrete Pipes Ltd. (1971) established the validity of statutes that have a sufficient relationship to the commercial operations of constitutional companies.

In 1978, a second cooperative system was decided upon, and by 1982, it had been put into action to address the shortcomings of the first. A Ministerial Council would approve all laws and revisions before they were automatically implemented in each jurisdiction. The National Companies and Securities Commission (NCSC), the antecedent of the Australian Securities & Investments Commission, was established as a result of this second program. 

Even though it was an improvement over the original scheme, the 1982 plan still had a lot of issues since the NCSC gave state commissioners administrative authority while keeping control over takeovers and policy. Financing issues and ineffective corporate regulation resulted from this. The Commonwealth corporations’ right to enact legislation about firms that have begun trading rather than those still in the formation stages was established in the 1990 Incorporation Case, New South Wales v. Commonwealth.

Subsequently, the Commonwealth attempted to assume complete control over Australian corporate legislation. The current setup occurred in 2001 due to the states delegating their corporate authority to the Commonwealth.

Now, I am going to tell you about the practice areas of commercial law.

Practice Areas of Commercial Law

Commercial law in Australia is also referred to as business law. This legislation covers the relationships, rights, and conduct of individuals and businesses engaged in commercial activities. 

Although, its main practice areas are listed below:

• Contract Law
• Intellectual Property Law
• Consumer Protection
• Banking and Finance
• Property Law
• Insolvency and Debt Recovery
• Mergers and Acquisitions

1. Contract Law

Contract law includes all laws and rules intended to enforce specific obligations. It is critical to be aware of and understand the legal framework that will control a contract before engaging into one, both throughout the creation process and if a disagreement arises. Contracts involving Australian counterparties, or contracts that are believed to be regulated by the law of Australia are not unusual in today’s global economy.

We often fail to realise that we are actually entering into contracts or should give them more consideration. But if something goes wrong (for example, if one party fails to deliver goods or render services that are flawed in some way), it might be crucial to determine whether a valid contract was signed or not. It is important to understand its specific terms and obligations, as well as the solutions available in the event of a breach.

The “common law” governs contract law in Australia, although more and more legislation is added to the common law of contracts. This is particularly notable in areas like consumer protection, although it is not limited to that area alone.

Aussie Legal Partners has been a trusted firm for years with its diverse knowledge of banking and finance cases. You can get a free consultation with our commercial lawyer to discuss your case.

2. Intellectual Property Law

The “products of creative and innovative endeavours” or the “property of your mind or proprietary knowledge” are referred to as intellectual property (IP). It is called “intellectual” because it is the product of using one’s mind, and it is called “property” because it may be owned, sold, transferred, leased, or given away just like any other kind of property.

The government organization in Australia that is in charge of IP rights, laws, and registration which is called IP Australia. Additionally, Australia is a party to several international accords safeguarding intellectual property rights abroad. 

Intellectual property comes in several forms:

• Creative works, music, databases, software, and other items protected by copyright;
• Patents cover new or enhanced goods and services;
• Trademarks include emblems, names, colours, forms, smells, etc.
• Registered Designs: a product’s form or appearance;
• Plant Breeder’s Rights: creation of new plant kinds; design rights for circuit layouts.

3. Consumer Protection

The Australian Consumer Law (ACL) will impact company owners in Australia. You must know how consumer laws impact your organization, regardless of whether you interact with clients and companies, offer services, or sell products.

A national legislation protecting consumers is called the ACL. The ACL is jointly administered by the state and territory consumer protection agencies and the Australian Competition and Consumer Commission (ACCC). ACL applies to all enterprises operating in Australia, including international ones.

4. Banking and Finance

Banking and finance legislation covers all matters related to bank and financial institution activities. Commercial or corporate lawyers are experts in handling the cases of national and international transactions within the intricate legal framework. A commercial lawyer is always recommended to solve your bank and finance issues, as they help you outline different financial arrangements’ parameters, draft the agreements, and negotiate with the other party. 

Banking and finance attorneys also provide legal counsel to businesses engaged in significant transactions, including mergers and acquisitions, initial public offerings, and even liquidations.

5. Property Law

Australian property law covers the transfer, disposal, ownership, and use of real and personal property. This property may include buildings, lands, and other assets. Australian property laws are developed by legislation and precedents set by judges in court, and every state has its own law. In Australia, the main sources of property law include the common law, the Torrens system, and certain legislation such as the Transfer of Land Act, the Conveyancing Act, and the Real Property Act.

All Australian states and territories employ the Torrens system for land registration, except the Northern Territory. The Torrens system is the most widely used property law legislation in the country. The foundation of the Torrens system is the idea of title by registration, which states that recording an owner’s name on the land title register establishes who owns the land.

6. Insolvency and Debt Recovery

Recovering a debt is an urgent and difficult task that requires a deep understanding of the law to be successful in your case. The debt recovery legislation in Australia describes the rights of creditors and debtors. It also oversees the process of debt collection and recovery. Getting the right assistance and understanding the laws and policies governing debt collection are important to get through the debt recovery process successfully.

There are several important elements of debt recovery law that you need to understand, such as:

• Demand Letters: This field of law governs the procedure of sending demand letters and legal notices demanding payment of a debt.
• Court Procedures: This field of law describes how to file a debt recovery case in court, including how to issue a writ of summons, file a statement of claim, and pursue other legal options.
• Debt Recovery Organizations: This area of law governs the use of debt collection companies and the rights and responsibilities of creditors and debtors throughout the debt collection process.
• Statute of Limitations: This area of law governs the time frame within which creditors must pursue debt recovery. 

7. Mergers and Acquisitions

In Australia, the laws governing mergers and acquisitions are intricate and control the merging or transferring ownership of one or more businesses. This field of law regulates the rights and responsibilities of both purchasers and sellers, as well as the steps involved in executing mergers and acquisitions, such as contract drafting, discussions, due diligence, and closure.

Closing Insight

This was commercial law and its practice areas in Australia. You might get introduced to commercial law by now and also get an overview of its history. Commercial law is still very complex in Australia, as all the states have laws and policies regarding businesses and commercial activities.

It is always recommended to hire a commercial law lawyer who can help you understand the legalities of your business. Furthermore, hiring an experienced lawyer will minimise your chances of losing your case. Aussie Legal Partners allows companies and individuals in Australia to deal with their commercial matters. With the help of their professional lawyers, you can easily sort out your issues and run your business smoothly.

FAQs

What is the role of a commercial lawyer in Australia?

An Australian commercial lawyer is your advisor for your business and organization to minimise risk, increase profit, and ensure your business will not face legal trouble. Commercial lawyers provide you with strategic and corporate legal services.

When do I need a commercial lawyer?

You need to hire a commercial lawyer when starting a new business, as it requires a lot of documentation. Sometimes, mistakes in the contracts lead to major disputes, which can be avoided by hiring a lawyer.