Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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The festive season is here, and most small business owners are busy wrapping up projects, chasing final invoices and lining up a well-earned break. It’s also a surprisingly good time to look at something less festive but very important: your legal foundations.
Legal problems rarely arrive as one dramatic “event”. They usually build up quietly over time - a copied contract here, a handshake promise there, a “we’ll sort that later” approach to compliance or equity. This guide walks through some of the common “naughty” patterns we see in Australian small businesses, and what the “nice” version looks like in practice.
We’ll look at contracts, regulatory obligations, employment arrangements, brand and intellectual property, online terms and privacy, Australian Consumer Law, equity promises and governance - and how to move each one from “lump of coal” territory into something more gift-worthy.
Contracts and Key Agreements
Naughty: Relying on outdated or copy-paste templates
Many businesses launch with whatever contract they can get quickly: a friend emails something across, a US template appears in a Google search, or an old document is repurposed for a new business. In the rush to get going, it feels efficient. But contracts are the main legal tool for allocating risk, setting expectations and resolving disputes. When they’re vague, mismatched to your model or written for another legal system, they can create serious problems later.
You see this when a client refuses to pay because they thought more was included in the scope and the contract doesn’t really clarify it. Or when a supplier relationship sours and you discover your “termination clause” doesn’t give you a clear way out. A small digital agency might use a US template that hands all intellectual property to the client and assumes US law. Twelve months later, they realise they don’t own the design elements they thought they could reuse, and any dispute has to be argued under wording that was never designed for an Australian context.
On the surface those contracts look fine: they have headings, signatures and legal-sounding words. Underneath, they may leave key issues entirely unaddressed.
Nice: Using up-to-date contracts tailored to your business
On the “nice” side, your contracts are current, governed by Australian law and actually reflect how you work. They explain what you are responsible for and what you’re not, how changes will be handled, how and when you get paid, who owns the IP, and how either side can bring things to an end if they need to.
This doesn’t mean turning everything into a dense legal brick. It means sitting down - ideally with a lawyer - and mapping a typical job from start to finish, then turning that process into clear, legally enforceable terms. When a disagreement arises, you’re not debating memories of past conversations; you’re pointing to what you both signed.
That’s the difference between simply having “some paperwork” and having contracts that genuinely protect your business and relationships.
Employment and Contractor Arrangements
Naughty: Handshake deals and misclassifying workers
Workforce arrangements are an area where “she’ll be right” can quietly turn into back-pay claims, Fair Work complaints and regulatory attention. In Australia, whether someone is an employee or an independent contractor has real legal consequences for minimum entitlements, superannuation, tax and more. It isn’t just about the label you give them; it’s about the substance of the relationship and, after recent High Court decisions, what the written contract actually says if it genuinely reflects how things operate.
Naughty scenarios include treating someone like a full-time employee - set hours, ongoing supervision, integrated into the team - but paying them as a contractor without properly thinking through the legal tests. There may be no formal agreement at all, just a trail of emails and invoices. When the relationship sours, the worker claims they were in fact an employee and seeks unpaid leave, super and other benefits. With little or no documentation, the business is on the back foot.
Even where the classification is correct, the absence of a proper contract leaves important issues unaddressed: ownership of IP, confidentiality obligations, expectations around outside work and what happens when someone leaves. Courts will usually start with the written contract if it genuinely reflects how the relationship operates in practice. If day-to-day reality drifts far from what’s written, you can still run into trouble.
Nice: Clear, legally sound employment and contractor contracts
On the nice list, every worker has a written agreement that matches the real relationship and is drafted with Australian employment law in mind. For employees, that means a contract that covers duties, remuneration and benefits, patterns of work, confidentiality, IP ownership and any reasonable post-employment restraints. For contractors, it means an agreement that reflects a genuine contractor setup - control, ability to subcontract, tools and equipment, allocation of risk - rather than using the label as a disguise for what is effectively employment.
A well-drafted contract does more than tick boxes. It helps the business meet its legal obligations and gives workers clarity about what they can expect. It also gives you something concrete to rely on if there’s a disagreement about hours, bonuses, IP rights or notice periods.
Combined with good practices around awards, entitlements and record-keeping, these documents are one of the best ways to keep employment issues off your list of unpleasant New Year surprises.
Brand and Intellectual Property Protection
Naughty: Treating a business name registration as “ownership”
Brand is often one of a business’s most valuable assets, but it’s easy to misunderstand how it’s protected. Registering a business name or company name with ASIC is largely administrative. It doesn’t, by itself, give you strong rights to stop others using similar branding for similar goods or services.
This can cause two kinds of trouble. First, you might be the one infringing someone else’s earlier trademark without realising it, and end up facing demands to stop, rebrand or pay damages. Second, you might find that when you try to stop a competitor using a confusingly similar name, you actually have very weak legal footing because you never registered a mark yourself. A café that spends years building a reputation under a distinctive name, but never files a trademark, might later discover a newer operator has registered a similar mark in the same class and claims priority. As they haven’t registered a mark, the café’s options are limited.
Without a registered trade mark you’re operating with far less certainty and usually at greater cost.
Nice: Treating brand and IP as real business assets to protect
On the nice list, brand and other intellectual property are treated as assets to be intentionally protected rather than incidental decoration. That usually involves getting advice on whether your name and logo are good candidates for trademark registration, checking for conflicting marks and filing in appropriate classes if it makes sense to do so.
Beyond trademarks, it may also mean understanding how copyright protects your written content and designs, when you might need design registration for physical products, and how to keep genuine trade secrets confidential in contracts and day-to-day practice.
From a legal perspective, a registered trade mark can give you a clear right to stop others using a deceptively similar mark in relation to similar goods or services. From a commercial perspective, it makes your business easier to value, franchise or sell because ownership of the brand is clearer. Think of it as putting your name firmly on the presents you’ve spent years wrapping.
Online Terms, Privacy and Data
Naughty: Running a website or app with no real legal framework
If you have a website, app, online store or platform, you’re doing more than advertising - you’re creating legal relationships with users and, often, handling personal information. Problems arise when website terms are copied from another jurisdiction, bear no resemblance to how your product actually works, or are missing altogether. Privacy policies can be equally problematic if they make promises you don’t keep.
In Australia, the Privacy Act only directly applies to certain businesses, such as those over a particular turnover threshold or operating in specific sectors or handling certain kinds of information. But even where it doesn’t strictly apply, customers and larger clients increasingly expect clear, accurate privacy information and sensible data practices.
An e-commerce business that uses a generic US-style privacy policy and then handles Australian customer data in a different way can find itself dealing with complaints, reputational damage and, in some circumstances, regulator interest – not because it set out to do anything wrong, but because its documents and its behaviour don’t line up.
Nice: Online documents and data practices that match the law and your reality
The nice approach is to recognise that your website, app or platform is part of your legal footprint and to give it appropriate attention. That usually means having terms of use or terms of service that explain how people can and can’t use your site or app, how accounts are created and closed, what you’re responsible for and what risks users accept. It also means a privacy document that accurately describes how you collect, use, store and disclose personal information, and have internal processes to support those promises.
Even if you sit below some formal thresholds, following privacy principles and having honest, well-drafted online terms makes you look more professional and makes it easier to work with corporate or government clients who often require them.
Good online documents don’t just keep regulators happier; they reduce confusion and give your customers more confidence in clicking “buy now” instead of “close tab”.
Australian Consumer Law and How You Treat Customers
Naughty: Ignoring Australian Consumer Law and relying on “no refunds”
Australian Consumer Law (ACL) quietly shapes a huge amount of day-to-day business behaviour. It applies to most dealings with individuals and many transactions with small businesses where the value or type of goods and services meets certain thresholds. It sets out consumer guarantees - for example, that goods will be of acceptable quality and services will be provided with due care and skill - and limits unfair contract terms and misleading conduct.
Many small businesses land on the naughty list not because they mean to do the wrong thing, but because they don’t realise how broad the ACL is. Common issues include “no refunds” signs or clauses that try to wipe out rights the law automatically gives customers; one-sided terms that let the business walk away from obligations but lock the customer in; or marketing claims that promise results the business can’t realistically guarantee.
A service provider, for example, might refuse any remedy for clearly substandard work on the basis that “the contract says no refunds”, not realising that the ACL overrides parts of that contract and may entitle the customer to a repair, repeat service or refund.
Nice: Building ACL rights into your customer experience and documents
The nice version starts by acknowledging that the ACL is part of the backdrop - you can’t contract out of many of its core protections, even if both parties sign on the dotted line. From there, you can design your customer terms, refund and complaints processes to work with that framework rather than against it.
That often means replacing blanket “no refunds” wording with a clear explanation of when customers are entitled to remedies, and when they’re not; tightening up marketing to avoid overstatement; and reworking limitation of liability clauses so they fit within what the ACL allows. A lawyer can help you understand which parts of your offering are likely to be caught by consumer law and translate that into practical, plain-English documents and processes.
You still protect your business - you define what you do and don’t provide, set reasonable limits and build in procedures - but you do it in a way that will hold up legally. It’s customer treatment that even the Grinch would have a hard time complaining about.
Governance, Decision-Making and Dispute Prevention
Naughty: Relying on goodwill alone when decisions get hard
While a business is small and everyone is aligned, it’s tempting to assume you’ll always be able to “work it out”. But as the stakes rise - new investors, new locations, new products - the absence of clear rules around decision-making and exits becomes more dangerous. Common flashpoints include one founder wanting to sell while another wants to hold, disagreements about bringing on additional shareholders, or trouble when someone stops contributing but keeps holding a large stake.
Without a shareholders agreement or similar document, there may be no agreed mechanism for dealing with deadlock, no clear process for buying someone out and no roadmap for resolving disputes short of litigation. What began as a Christmas lunch idea between friends can end up in a tense and expensive legal battle.
Nice: Governance that’s more festive than feisty
The nice version of governance isn’t about bureaucracy for its own sake. It’s about deciding, while things are calm and everyone still likes each other, how big decisions will be made and what happens if someone wants out or the relationship changes.
A shareholders agreement or founder agreement typically covers how major decisions are approved, how and when shares can be issued or transferred, what happens if someone dies or is incapacitated, and how disputes are to be handled - for example, through negotiation, mediation and, if necessary, agreed buy-sell mechanisms. From a legal standpoint, that can prevent deadlock and reduce the risk of drawn-out litigation. From a human standpoint, it protects relationships by setting expectations early.
It’s the difference between going into the holidays with a clear plan for who’s cooking, who’s cleaning and who’s in charge of the music, versus hoping it will all sort itself out when everyone’s tired and hungry.
Staying on the Nice List into the New Year
No small business is perfect. Almost everyone has a mental list of “we really should sort that out” legal tasks that never quite reach the top of the priority pile. The point of a Christmas legal check isn’t to panic; it’s to bring those issues into the open and move a few of them in the right direction.
If you can head into the new year with contracts that reflect reality, a basic understanding of your regulatory landscape, clear employment and contractor arrangements, a plan for protecting your brand, online terms and privacy information that match what you actually do, customer treatment that aligns with Australian Consumer Law, structured equity offers and a simple governance rule book, you’re already well ahead of many businesses.
You don’t need to fix everything before you switch on the out-of-office. But choosing even one or two areas to move from “naughty” to “nice” can protect you from bigger problems later - and make that holiday break feel a little more relaxing.
If you would like some help getting on the legal ‘nice list’, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
