Understanding the legal jargon | Why a business lawyer is the best person to speak to.
I say this a lot, In business, prevention is better than cure. And it is, there’s no doubt.
But what does it mean when it comes to what small business owners can do to protect their businesses? What do small business owners need to know, and need to do, to get their ducks in a row and protect the business they’re building?
The law can be complex to navigate. There’s a lot of legal jargon that is hard for not only small business owners to understand, but for some lawyers, too! I don’t know the history behind the all of the Latin phrases or why certain ambiguous words are so commonly used (when I was studying law at university I wasn’t able to get my head around some of the reasoning behind these archaic terms!) but the reality is the jargon is here to stay, so business owners need to get on top of it.
When diving into an area that is not our expertise, my approach is to bring in the experts if you want peace of mind. I seek out specialist accounting advice when I need to; talk to an insolvency guru if the need arises, and I most definitely don’t dive into anything IT-related. I bring in the experts. That’s what I suggest you do when it comes to legal jargon and lawyer-speak. Bring in the experts, and in this case, that’s your Australian business lawyer.
Here are some of the most common terms and phrases that I see clients get stuck on:
Disclaimer
When it comes to drafting your disclaimers on your website, or in your business terms & conditions/service agreements, this one is best left to an Australian business lawyer! A disclaimer limits the extent of your liability and any contractual or legal rights that a consumer or client may have against you down the track. If you don’t get this right, you can find yourself in all sorts of trouble.
Indemnity
This one is important when it comes to your legal documents. When entering into anything legal, always keep a keen eye out for the indemnities being given. An indemnity (drafted properly) will provide security or protection for a party to the document against a loss or other financial obligation that may arise in the future. As you can imagine, you can’t afford to muck this one up.
Intellectual Property
Intellectual property (commonly referred to as ‘IP’) is an asset of any business and it needs to be protected! In short, it’s the property created when a new design, product, idea, process, or service is developed. If you create it, it belongs to you and it will be considered your IP. The most common types of IP are Patents, trademarks, copyrights, and trade secrets.
To ensure you have your IP protected, you really need to engage an Australian business lawyer who can help guide you through the different processes available to identify and register where necessary, the IP that belongs to your business.
Force Majeure
This comes up a lot, especially over the last couple of years. It means events or circumstances outside the control of a party or parties to an agreement. Why can’t lawyers just say that? I’m with you on that!
Warranty
This one is important for every business owner, whether you’re a product or service-based business. Your obligations under Australian Consumer Law include obligations around warranties, so you need to get this right.
A warranty is a voluntary promise from a person or business that sells a product or service. It can relate to a promise to provide services again if they don’t meet the professional standards required, or it can be a promise to repair or replace a product sold that is faulty or defective.
Bone fide
A good old Latin phrase that means to act in good faith (yes, we lawyers could also use the words ‘in good faith’ but hey, who am I to say so?!).
Caveat emptor
You would be forgiven for thinking this has something to do with the Roman empire. However, it doesn’t. This relates to a buyer entering into a contract to purchase something (often land), and it means ‘let the buyer beware’. The buyer needs to have undertaken thorough due diligence because they are agreeing to be aware of all that they are contracting to purchase.
Inter alia
More Latin. This is just a fancy way of saying ‘amongst other things’.
Mitigation
I love some good old talk around obligations to mitigate.
Mitigation means steps a party needs to take to reduce the severity, seriousness, or painfulness of something. If you work with me and you are involved in a contractual dispute, we will be discussing whether a party has an obligation to mitigate their loss before suing another party.
Quantum meruit
A Latin phrase meaning ‘what one has earned’. In the context of contract law, it is referred to as a remedy that entitles a party to reasonable payment for a service that has been provided (either in full or in part) and not yet paid for. A party may seek damages for the value of work performed and not yet paid – the value of that work needs to be determined.
The takeaway here? We don’t know what we don’t know, and that’s ok. We’re not supposed to know everything about everything (and we can’t). So when it comes to legal jargon, law terms, and anything else specific to business legals, bring in the expert and talk to an Australian business lawyer. If you don’t, you’re leaving your business exposed to a risk that if something goes wrong, your business may not be protected.
What does this mean for your business? When you are preparing your legal documents, or about to enter into someone else's, talk to your business lawyer and get the right advice. Prevention is better than cure, and now is the time to get the right advice, early, to save the pain and potential financial exposure later.
Want to read more about our legal low down for small business owners? You can jump over here and read our resource Australian Law 101 – Guide for Small Business.
Keen to talk? Book in here for a free 20-minute consultation, and let’s get your business needs sorted.
