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Federal Labor reviews Code and good faith

by Norton Rose
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It is understood that the Federal Government has commissioned preliminary work in relation to the inclusion of a statutory concept of good faith as a specific statutory obligation in the Code. The Government is examining whether such a concept would be capable of definition with legal certainty. The Government has advised the Franchise Council of Australia that no change to the law would however be made without industry consultation.

The decision of Far Horizons v McDonalds Australia confirmed that there is an implied duty to be implied into every franchise agreement to exercise the rights and obligations conferred on the parties by that agreement in good faith. It is therefore hard to see why any statutory codification of this general duty is required. Indeed to do so would create legal uncertainty. However it is understood that the impetus to consider the matter has been provided by lobbying to create a specific statutory right for Deacons is Australia's leading franchise law firm, with offices in Melbourne, Sydney, Perth, Brisbane, Canberra and in 11 locations in Asia. We have assisted over 200 franchise companies, from large international corporations to start up franchisors. We do not handle franchisee matters. 03.03.2008
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