AUSTRALIA Law and Practice Contributed by: Warren Scott, Stewart Levitt, Erik Purcell and Lachlan Speirs, ARCHER SCOTT Lawyers
8. Dispute Resolution 8.1 Enforcement of Foreign Judgments Australia is party to the New York Convention. If it is likely that an overseas award will need to be enforced in Australia, it is recommended that an arbitral award is provided for as it is the easiest path to enforcement in Australia. 9. Payment and Taxes 9.1 Restrictions or Limits on Franchisee Fees and Royalties Australian law does not prohibit any particular types of fees under a franchise agreement. However, under Australian laws, if an amount is a penalty rather than a pre-estimate of loss, it will not be enforceable and certain third-party costs are only to be charged on a pass-through basis, such as credit card fees. These issues are not franchise-specific, and each business should consider any relevant applicable laws that relate generally to their business model. 9.2 Withholding Tax Withholding tax applies to royalties and other pay - ments where payments are exiting Australia. Tax advice should be obtained. 9.3 Foreign Currency Controls Relatively few foreign currency controls exist, but certain arrangements apply in relation to jurisdictions based on relevant international considerations from time to time. 10. Execution Formalities 10.1 Authentication, Notarisation, Witnessing, Etc If the franchisor or franchisee is a company, the Cor - porations Act 2001 (Cth) sets out rebuttable pre - sumptions about the proper execution of documents. Where a company has more than one director or a company secretary, execution should be carried out by two officers; this can be either two directors or one director and one company secretary.
6.4 Channel Reservation Franchisors are permitted to reserve channels, such as the internet, to themselves, but must clearly describe this in the disclosure document provided before the franchise agreement is entered into. 6.5 Vertical Agreement Block Exemptions Vertical agreement blocks are considered in the con - text of competition laws generally, and do not gener - ally require exemption. 7. Choice of Governing Law 7.1 Possibility of a Franchisor Stipulating Non-Local Law The franchisor in Australia may choose any relevant law they prefer, including an overseas law. Notwith - standing this choice, the Franchising Code of Con - duct and the Act and various other laws in Australia will apply, as they are focused on the conduct occur - ring in Australia. 7.2 Local Law Requirements There is no requirement for franchise agreements in Australia to be governed by local law. 7.3 Mandatory Content There are no mandatory content requirements under Australian law. 7.4 Prohibited Provisions in Local Law Several provisions are prohibited in Australian fran - chise agreements. Some provisions are contained in the Franchising Code, such as a provision that the franchisee pays the legal costs of the entry into the franchise agreement. However, the more extensive prohibitions on contrac - tual provisions currently arise as a result of the general laws against unfair contract terms in standard form contracts.
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