Discover a Software Development Invoice Example for Legal that Simplifies Financial Transactions

Software development invoice example for Legal

[Music] so let me just introduce Cameron Shaw uh Cameron's worked here for uh at ssw for many years before he went off and became a lawyer he'll tell you more about that but uh I can tell you that a lot of people would talk to me about uh especially um other smaller guys that are trying to get up and running with um you know independent Contracting when they're working for clients that are substantially bigger than they are and they ask about how do we do that and how do we manage different clients and I can say these days like you know we have a fairly smooth running um you know Consulting practice we we haven't had any project not going go into production in the last uh six years now but it hasn't always been like that we've obviously been through through um School of Hard Knocks and um Cameron has been been with the company for a fair while um before he's gone off and become you know went off and did a law degree um and uh I think that um you'll see tonight uh a session that I wouldn't have minded seeing myself quite some time ago because obviously you learn things the hard way and um you know it is a lot about setting up expectations he's obviously going to have a bit of knowledge about how software works so he's should be able to tailor it to whatever you guys want and should be able to answer questions as we go okay after after working at ssw for a while I got uh involved in projects uh contract negotiations you know arguments with clients about this that and the other and um I really I guess took it uh got a taste for the legal side of things so after a while I went and got myself a law degree so and here I am back again now being a being a lawyer we fill our lives with disclaimers and caveats and you know warnings and the like and so I have to tell you very clearly that um this presentation does not constitute legal advice so if you got a I'm here to give you some information some uh tips and tricks about what's going on but if you got particular legal questions I'm happy to take any questions on the way through um but but anything I do say I'm not really taking into account your personal or particular situation I'll make General comments you might need to go and get yourself some independent legal advice if you've got a particular legal question so um don't do things expressly on what I say so if that means turn your ears off and walk out legally then that's what I'm saying but you know take take everything I say here on the understanding I'm providing you with some information and uh if you got particular legal issues that you you think need to be addressed then you should go and get yourself a good lawyer I've got a few lawyer jokes dispersed on the uh slides um because we deserve those jokes most of the time so feel free to laugh or not as you go through anyway the things I want to talk about tonight is essentially matters concerning contract and everything that flows off of that so uh the notion of does anyone tell me what they think a a contract is that could they Define what cont contract law is or what how a contract Works anyone got any ideas Define what a contract is or or how a contract Works people say that again a bit loud agreement between two people absolutely it's an agreement between two or possibly more people now it's a special kind of agreement anyone want to add a little bit more information to that word agre consideration yeah there's all those elements to it uh which legal perfect that's exactly what we wanted we want a legally binding agreement between a number of people so it actually binds people's legal situation so out of a contract you've got rights so someone's got these rights that they can go and enforce against someone else or you've got obligations so someone has all these things they've got to do in ance with that contract and uh the whole of Life Works off contract a number of other basic laws but we do that the contract sets out the rights and the obligations between the parties so I want to uh think about what those rights and obligations are how do they arise how are they defined and the like the the issue that lawyers confront is when we're uh considering drafting contracts or getting involved in contract negotiations is we think of the worst possible scenario that can arise that's the situation we have to provide for in business when you're a a software guy and you're speaking with a client you're thinking everything's going well you you're being friendly you're thinking you're going to work in a good faith environment and everything's going to be pretty um but the piece of paper that you sign or the term of the agreement that you that you f uh finalize that has to be drafted so that if everything goes um up up the creek does everyone know and does everyone agree on what's going to happen in that situ situation so we try and think about um when everything goes wrong so that's why we always always think to the most negative outcome possible um I want to talk about how you as a software developer protect your position um what are the issues that I think practically about why ultimately you're going to get sued and then of course if you know the answer to those questions you might be able to provide some solutions now I guess I just want to ask firstly show off hands who here works for a software consultancy um that provides a service to bigger corporate Enterprise or or bigger clients all right quite a few people how many people in this room work for a large corporation and is a software developer within a large corporation all right so quite a different mix from the group in uh Cambra which you might guess is a has the balance the other way all right so from your perspective how how many people here make the business decisions you know the business is in the in their hands they they're on the line if everything goes to to pot yeah so there's quite a few people here in that in that position um from from my position in my as a lawyer I I don't work for a big firm I work for a smaller firm and so for my clients are people probably in your position who are fighting the big baddies out there um so I I come out a little bit from that angle about how to protect a software developer but if you if you just take your software development hat on and think put your client head on for a second pretend you're the client you obviously what you're trying to do in that situation is try and screw the software developer down in a particular way so that he gives up all these rights uh and has lots of obligations but you know we can uh we can attack it from both angles that's what we do as lawyers anyway what I want to uh talk about first is um just a a first scenario uh a factual situation or describes a factual situation and of course anything I say here has any any any um resemblance it has to what occurred in reality is purely con coincidental let's say you're a software developer you um enter into a contract with another company called Northwind proprietary limited the nature of the work that you're going to do is like a discret internal management system it's a system that only a few users are going to use it's not it's not a public site it's something that you know you might have a a number of managers across a number of states um but they're all going to use this system for for running running their business in any contract you're going to uh you contract as a concept doesn't need to be written it can take its form in a whole bunch of different ways it can be partly written it can be partly oral it can be simply oral you can even have a contract that's simply based on um an interaction between two two people where there's no words and no no um no words spoken and no words written when you um buy a newspaper you don't actually necessarily have to say or say anything you just have to do something but anyway let's say you've got a written contract and it's got an aspect of it which is fixed price and an aspect of it which is variable is this a familiar situation you're going to do both aspects how how many people here enter into fixed price agreements as a as a rule few people not many there's a few mad few mad people in the room all right um probably more prevalent before agile turned up to to enter into fixed price contracts but they seem to be going a little bit by the wayside in U probably Adam's kind of kind of business but in any contract you're going to have a fixed price element and uh this contract has a fixed price element and a variable element now what what happens in in any kind of situation is the contract's going to say certain things there's going to be a standard form of contract and it's going to say as an example that only soand so a particular person in in a business can authorize work under this contract because it might be especially under the variable price element that there's a degree of scope which is to be um to be agreed down the line you might agree an hourly rate uh for for that kind of work and then it's going to say only you know Mr Northwind himself is the one who can authorize work under that contract um and and sign it off and it must be done in writing um there people seen contracts like that before that state very clearly how work is going to be authorized under the terms of that contract but what happens in the course of business delegation that's right something changes people say Mr Northwind just like we were hearing before about product owners being too busy M Mr Northwind says I don't want to hear about this anymore um I want someone else to take over the role and so he delegates his particular responsibility under the contract to someone else okay you might have a chat and it doesn't happen formally does it you're having a chat with the boss of the company and he says look I'm really busy moment go on to talk to talk to Barry or go and talk to Julie my secretary she knows exactly what's going on she'll tell you what to do that's a a common a common scenario in just general day-to-day interaction with um with your clients the other thing is that the contract sets out what you're going to do obviously the fixed price element is going to State it fairly clearly what what's meant to be done or it should you're going to have the variable component might you know the contract might stipulate you know you need to develop these screens or this particular system but inevitably while you're talking to Barry or while you're talking to Julie she says look we've got a real issue in this part of the business we want you to create this new screen we want you to convert this Excel you know spreadsheet into a bit more of a manageable system because it keeps crashing and falling over so that's something that people have experienced where they continually changing something from what was agreed initially in writing suddenly the whole world changes through the course of the project probably as a developer you like that because you're getting more work beyond what you originally provided But ultimately the document that you sign didn't say do this this this and this and then of course what happens in the end is something goes wrong partway through the contract uh what inevitably occurs is that you've only completed a portion of the work client says software doesn't work I haven't got what I wanted and they refuse to pay they say well you didn't get the work signed off by me um you know we didn't authorize that particular work that's not in the in the contract between us and so you end up in a a dispute about um with with with a client now the challenge I have a question yeah yeah the question is um are is there a chance of an Australian developer being sued by other developers from overseas um if they infringe someone else's Payton overseas and he's specifically thinking of if he infringes someone's app in the app store and sued by a non- Australian yeah all right well there's couple of things to say about that the first thing is that that concerns intellectual property law and intellectual property law is an enormous area of law uh particularly when it comes to patents and if you want to become a patent attorney in Australia you got to do a whole lot more study after you do a law degree to go and become a patent attorney and you got to have another specialization you can only be a patent attorney for example if you've got another expertise in another field so you might be a scientist or food scientist or something like that so what what he's touching on there is is the question of of intellectual property law and that's beyond the scope of contract law because it's not about your you don't have an agreement with this other guy in in contract so there's other obligations which exist Beyond contract so that's the first thing to say is that you you need to speak to a specialist IP guy the second thing is to say that um in terms of copyright patents trademark all that kind of stuff there are international agreements which operate where like Australia for example has ratified an international treaty on copyrights where we'll recognize the United States patents they'll recognize our patents and the rest so ultimately because Australia has agreed to ratify someone else's patents then we're subject to all the rules and obligations that as if that other person was in Australia so yes there's a chance that you would be will be sued so don't don't think that simply because someone's in another country especially in patent law where it's particularly designed to cross international boundaries all right um the way you guys work when you write code I haven't seen people write code for a while but I remember when I first started here Adam used to code in a corner office in with access 2 up and uh he was very good at access 2 I don't know if he learned anything else Beyond access 2 did you Adam oh leave me alone but anyway what you guys do when you write a piece of code is you run it straight away and what happens ER you get error who whoever writes code without bugs you know good to hear good to hear um but you produce bugs and you fix them straight away on the way through that that's the way you work you can test your code instantly you select that those lines of codes you're right you compile it you run it and you work out whether you've delivered got a bug or not the big issue in contract is that there's no compile and test in contract law if you enter into a contract today you know you might know whether there's a floor in it for 15 10 years time you know 20 years time and no one's going to be able to tell you which way it's going to go for a long time and it's a real issue for um for for lawyers because we're really trying to navigate our way through without being able to strictly test what's going on so that's why when lawyers always get asked questions we always just say well you know it depends because there's an infinite number of factual circumstan aners or things that can change on the way through so um yeah it's it's a it's a real uh real challenge to get contracts right and you're never going to have absolute certainty until you're in court what does that do to the liability situation of a lawyer because if I H you to wrun a contract and I realize 5 years da track that it's got a fatal floor in it which should have been corrected at the time my lawyer yeah absolutely lawyers are the number one target for people to get sued often in in most courts the most important thing to bear in mind when you're contemplating suing a lawyer is what's called or or anybody is What's called the statute of limitations so there is a time period which commences which starts and you've only got a limited time in which to sue people so in contract in New South Wales it's 6 years and it's 6 years from the date of breach of the contract so the date the contract was entered into is one date but that's not necessarily the date it was it was breached you write a contract for me today yeah and it has a floor in it is that contract breached today or is it breached when I it may it may well be breached today depending on the circumstances or it may only be breached when a further situation arises yeah so these are these are all the the issues that are going to create complexity to your case um because often in contract it's the date that you give the advice that is the but but then if you think of don't forget when you sue people you don't just Sue in contract you sue in a whole bunch of other basis another way of suing someone is on the basis of negligence now the time starts to run on negligence only when you've discovered that the lawyer was negligent so you might not discover that until you know the advice turns out to be bad later on anyway so testing a contract is extremely difficult and it means that when you work with your clients on a day on an ongoing basis you've always got to continually revisit your contract because just because you haven't had a trouble in the past doesn't mean your contract's good um the other thing I just want to mention is um that contract is a little bit in my mind when when I went through law school a little bit like algebra lot lots of aspects of law are a bit like that in order to be um convicted of murder as an example what you've got to prove is two aspects one called physical aspects and another one called the mental aspect the first one is you got to prove that you did an act which caused a death so you got to have those three elements you got to have a plus b plus C in order to get the physical element of murder so you got an act so you actually got to do something you've got to the ACT has to cause a death so you obviously need to prove a dead body an interesting case on that question is there was a girl she was upstairs in the room in a unit block there was a her biky boyfriend was bashing on the bathroom door and saying you know talking to her I don't I don't know what it was that she was saying but you know probably yelling abuse out or whatever she jumped out the window killed herself or died well was that did that act of knocking on the door and screaming at her did that act cause her death is the question so you've got to have all those components and then there's the mental side to it as well you've got to do it with a particular intention I won't go into all those elements now but similarly for contract you've got to have a plus b plus C plus d plus e plus f plus G in order to get the result that you want and that's why lawyers always think about things that you don't think are relevant because there's all these little pieces of the puzzle that we've got to we've got to put in to uh to get a a a contract in uh in the end so um Cameron um a an example that's current is that John Singleton thing where it it looks and smells that something was wrong with um Waterhouse and but all he could um do was work with a comment like off but he didn't have proof in between is that yeah that's right that that was an evidentiary question as to whether he could prove someone had said said something and what they decided in the end as I understand was no one could prove that someone had said something about the the health of the horse but um a a classic example of of an element of contract is is what we call agreement and I think someone mentioned before offer and acceptance so if you um if you make an offer to someone I'll do this work for $200 an hour they write back and say no you'll do it for $150 now and then you didn't start work on what basis are you working you know there's there's no agreement there as to what rate you're going to do is it 200 or is it 150 and so you have to have an offer that must be accepted so you must have the offer that's a you must have acceptance of the offer B in order to get that um condition of of agreement so um uh so yeah there's there's a whole bunch of little particular pieces in contracts that you got to got to put together and I'll go through some some of these I'm not going to go through these in details now because I want to go back to our scenario and talk about that but these are all the VAR some of the the various aspects of um contract that you got to piece together now does anyone he trade as a soul Trader all right so if you're a if you're a soul Trader people don't always necessar or if you're Contracting with a soul Trader is people write you know when a soul Trader trades they trade under a business name you know best software in the world whatever um the Contracting party in that is the person themselves you are Contracting with a person because there is no legal entity called a business name if you're Contracting with a company then a company has its own legal entity but how many here who run their own business and run their business under a company name have um a $600,000 property owned by that company as well or a a major asset also owned by that company or to most of you who run your own businesses have a company name and all your property and other assets is in your own personal name that would be the more common scenario I would suggest um why do we do that why do we put our Assets in our own name or in our wives names or our husband's name rather than in the company name limits access to them from a liability perspective yeah that's right and so when you're Contracting with someone it's particularly an issue if you're uh if you're being required by a corporation that if you're Contracting with Superior software for Windows proprietory limited sometimes that corporation's going to want a personal guarantee or the like or if you're Contracting with another particular entity and especially if you're a software development company that does work for other small businesses you need to think very carefully about who you're Contracting with and whether you're Contracting with a person with a number of persons or with a company and if you're Contracting with a company what's the underlying asset position of that company if everything goes Belly Up and you've got to sue them if they're anything like your company there's going to be no assets there so if you've lost a lot of money if they owe you a lot of money and all you've got is ultimately a a shell company then you're in a difficult position in terms of recovering any any loss down the line so you know the situation I have a contract with a company you know XYZ Corporation over there but when I come to sign contract says XYZ Administration limited or something like that I Sub sub company owned by the company I've seen that happen a couple of times where it's obviously been set up for some administrative reason yeah well that's uh that's something you have to be particularly careful about about you know if especially with a big Corporation there's going to be lots of uh you know different entities under under a group and it may be that they use one particular company you have to repeat the question so I I beg your pardon all right I just been told to repeat the question so Greg's question is what if you're Contracting with a big company called you you think is a big company called Northwind Northwind limited but when you get the contract through the contract is actually with a company called Northwind contracts in ad Administration proprietary limited or something like that is that what you're well not so much an Administration but you know nor a different company other than the big company you thought you were dealing with number two Li yeah that's right yeah so what that means is you're Contracting with Northwind number two limited so whatever the assets and liabilities of that company are if you have to go to court that is the company that you will sue and that is the company that you will need to recover against so if that company doesn't have any assets um then you're in trouble and the the classic example of this not in a contract situation is where people have tried to sue the Catholic church because there is no such legal entity called the Catholic Church you know Incorporated in Australia that that most people have have you know tried to sue for for sexual assault and and the like what they've ended up you know they've tried to sue the particular priest well where's that going to get you you know that's you're not going to recover damages from that so it's very important if you're a small business and you're Contracting with other small businesses that you've got to know exactly who you're Contracting with and I would suggest that if um uh you know you can go and do a search on the AIC website and find out how long that company's been around for if the company's been around for you know 3 months you've got to start wondering what is the nature of this entity that you're dealing with does anyone remember there was something in the news recently I think about Target importing some um some um beauty products do anyone no one reads the legal disputes section the newspaper so T Target was importing some particular um makeup from a from a company in Australia the company Australia was getting them from um somewhere in America and what they discovered was that the brand that was coming from the company in America was s and so what's happened was the true um manufacturer of that particular product has then gone and sued Target for B basically doing you know breaching various various obligations that that it had on whatever basis that company the True Manufacturer has also sued that Australian importer that they would say knew what was was the wrong thing they doing the wrong thing but the point is that Australian importer has only been around for three months it's got no assets the directors of it have disappeared so targets left as a company as I understand it that's just uh doesn't have any it's going to recover from from being deceived in that situation so if you're doing business with a small company you should find out how long have they've been around for should I get director's guarantees from from the people that that you're dealing with um all right I I won't go through all these because I I'll touch on them um as as we go through but I will make this point about only contract question mark as the final point there um when I said before about that you'd probably Sue in negligence you know you could sue someone in negligence as well as in contract the terms of the private agreement that you have between yourself and the other party is not the only basis in law on which the two of you will have rights and obligations to each other everyone's heard of negligence does anyone know where negligence came from the famous the famous case it was handed down in the um I think it was in in England or in Scotland in 1932 case called Donahue and Stevenson anyone heard of that anyone heard heard of the snile in the bottle case I've heard of it I did it at University you did it at University yep I had to do did you go into the wrong class no you have to do one subject of Law and I hated it but I remember that because they um he he drank from a bottle that was opaque and he sued because I think he got sick from the snail that's right that's that's pretty close so what happened was is um this woman went on a day trip with her friend she went to the local corner store in 1932 somewhere in Scotland and she ordered a uh it was actually a ginger beer spider so the owner of the corner store opens this bottle of ginger beer and it's opaque and he half pours out this bottle into the um in into uh this This Woman's glass with ice cream in it the Woman's friend then pours the rest of the glass in after she's after she's already taken a sip and what emerges out of this glass is a half decomposed snail and of course this woman suffers terribly she goes to the doctor and she gets um diag noosed with gastroenteritis I don't know how much of the snow she must have eaten and she's diagnosed with um nervous shock well with you know she's obviously mentally distressed by the incident with the half decomposed snail and we do hear stories about that from this from time to time when someone goes to McDonald's and finds half a finger or a bullfrog or whatever in their in their Quarter Pounder now that case up before that case there was no principle in law called negligence a negligence is where you as a person owe a duty of care to another person and if you breach that duty of care and they suffer damage as a consequence of that breach you can then get sued so it happens all the time now in motor vehicles and uh Med medical issues so you as a car driver have a duty of care to other people on the road that you you know drive carefully so in the before that case there there was no such thing as negligence and now it's everywhere it it dominates uh dominates the um the law particularly in America where negligence suits are enormous so when you're thinking about the obligations that you have between you and another party you might strictly Define them all in contract strictly Define the terms of the agreement between you and the other person but it might be that the law of negligence cuts across that um that particular contract and and and changes everything um so it's different to what the contract says the classic case of this is where you have a contract which limits your liability who he has a has a written form of contract which states that there's a limited liability uh that you would owe under the contract to that particular person yeah and what's the normal way for how it's limited what what are you normally limit it to gener the spend on the contract yeah that's a little bit more but generally what's yeah that's right so yeah so the comment was that the general rule is that you you limit the liability to how much you've been paid in the contract or how much the contract is worth so if you do $4,000 fo worth of work um you try and contractually limit your liability to $440,000 now the thing is that the law of negligence and other areas of law can just cut across that contract and basically get that turn um kind of read down by a court or TH or thrown out by a court not not strictly thrown out but the court won't won't have won't find itself Bound by it when it's coming to an argument about it there there's other areas of law as well is uh who's heard of the Trade Practices Act well it doesn't exist anymore so there's a new act called the uh competition and consumer act um and that annexes to it the Australian consumer law and it creates all these obligations on um manufacturers and service providers to Consumers um has anyone bought anything recently like even from apple or Microsoft whatever and there's been a little extra slip of paper in the in the box that you've got that's referred to the consumer law is anyone do that ring a bell or you just throw out those pieces of paper never yeah so when when you buy something in in Australia now there's going to be this new warranty clause which is very powerful and it basically says you know if you don't like this we'll have to give you your money back you know pretty not quite to that extent but that's that's what it says so that law is is a new law um well it's changed the the Trade Practices Act uh a little bit but it's put a lot of power in the hands of the consumer now who here thinks that when they're Contracting with another company that that other company is a is a consumer yeah the default position is they are until they're proven not to be there's lots of particular rules about the Australian consumer one is when you're doing contracts for less than $40,000 you know if you're doing a contract for less than $40,000 that really opens you up to the Australian consumer law would most people here who run small businesses do contracts on a regular basis for less than $40,000 yeah you know so you're really exposed not only by the law of contract not only by the law of negligence but also by other statutory rules that cut across and affect your legal obligations and rights Cameron I have a question from um a live streamer and basically he's asking he's saying look I want to put an app into I'm a little guy I want to put an app into the App Store I'm only going to charge 9 cents but I'll get a lot of people and um how do I protect myself like it's going to show um the parents where the kids are but imagine the app fails and it's not showing the parents where the kids are can I be sued you know and I only charged the 99 Cents he said how much can that Ula you know the uh yeah yeah software agreement stop them from suing me and of course the reason that the app would fail would be someone else which would be Azure or Amazon web services or whatever look one one of the issues with um getting sued and and of course this you know when you build building an app it's going to cut across International jurisdiction so you know you have that part to think about all I can speak about is Australian law but one of the rules in when when you're suing someone is that you got to prove that you're you suffered damage so you suffered a loss and the damage flowed from either the breach of contract or the negligence or some other breach um by by the person now you know I'm walking down some steps there's a a loose tile that you've known about I slip on the loose tile I break my nose that's pretty clear that my broken nose is caused by your negligence in that situation there's a rule that basically says the damage can't be too remote it's called the rule in Hadley in baxendale if you want to write that down um but ultimately it's got to be that it's within the contemplation of the parties that you um this is in Australian law anyway that um that such damage might flow if you didn't do what you meant to do so if you think you know you've said this person this app tells people where their children are the child goes out the child the app doesn't work and the child Falls over or gets hit by a truck and you know suffers some kind of loss there's so many steps in between the failure of your app and the damage which flowed that the courts might say look that's too much of a stretch it's too remote the D damage is too too remote the remoteness is is the legal term but it's just too too far stretch from from um from from from the negligence because you know even if you had known where the children was were would that have would that have stop the damage occurring so you know just just because you knew your child have been hit by a bus or was near that you might have done anything about it so the courts are going to be reluctant to go that far but having said that um obviously the uler that you write has to take into account all these things and basically say this app says you know we're going to do this but the ul's going to say but we're probably not going to do it just like that Snapchat which said you know it says we're going to delete it and then the Ula says but we can't guarantee that the files are going to be deleted so you kind of you know and and then there's a whole bunch of other issues uh emerging so look it's it's it's a risk to think about you've got to provide for it but if that's situation occurred you'd um yeah uh driving the loss against you it's going to be possible but hopefully your lawyer is good enough to say it's way too remote so Cameron um before we said like in Consulting engagement um if the Consulting engagement is for 100k they can only sue you for 100k since since they only purchased the app for 99 C can't they say you can only sue me for 99 um well that's right but what I said before was that the other laws will cut across that contractual agreement and and basically a court would would would say well what we're not going to the the parties aren't Bound by that limitation of liability that says what's Limited to 99 cents look you know software is a um a whole new world in in the App Store and I'm I'm sure Apple would actually provide developers with some kind of information about that stuff so but yeah you if if you're buying something that's going to be consumed by the public in Australia you're going to be subject to the Australian consumer law and there's a whole series of obligations are going to fall on you when you're providing something that goes out to the public Cameron if I put out an app or whatever and say this is what it's for but you must test it to make sure it meets your requirement does that cover me and you know I'm going to put all the ifbs of babies at us might not be up 100% of the time or whatever but if I say you've got to take on the responsibility of testing it for your usage of it so that child monitoring they you got to make sure it works for monitoring your children in your location uh and have I covered myself a little bit well you've got to be care you've got to um sorry I'll repeat the question the question is um if I summarize if I say that my app does this but you need to check it that it does does this to satisfy you uh it does that cover you in a liability question well my first response is that you shouldn't say things that aren't true so if you say the app does this the app should do it as a general rule so statement is that you need to test it in your situation because you you might be using a piece of equipment uh and it's incompatible with my for example sorry say that again you might be using a piece of equipment or a software version which is a it works on well well then what what yeah okay so the question is what if your app integrates with a third party or something like that I guess that's that's where you say you you're actually limiting what you're saying the app does this app works this way but you know does not operate with third parties and so what you need to do is you just need to say the limitations of your product at the very beginning because there's a very important part in the Australian consumer law called misleading and deceptive conduct and you can't engage in conduct which is or is likely to be misleading and deceptive so if you say x but why is the case then you may be breaching that statutory provision so what you need to do is say you know this x this app does X in this situation but does not do y you know you've you've got to be pretty clear about what you what your software actually does and doesn't do so you open up to class well if it's doesn't do something you that's right I I guess my comment on that is um I I understand that a particular Law Firm has been you know in investigative process of a class action against vhone um for their for failures in or issues with service from some years ago and I think that's been going for two years now that investigative process there's um there's that Voile website I think he got a a lot of public out of it um but look if you're a little guy that's working out of his back shed lives at home I think if someone want to bring a class action against you well if they want to make you bankrupt and spend 50 Grand going down that path you know Bring It On you'll suffer the pain but you got to think that that lawyers think practically as well and if there's nothing to be gained um then you've got a you know that it's unlikely that it'd be pretty brave person that took action and if you think you know vone there people raised issues there and that hasn't as far as I know or I I haven't seen much much in the courts about that so um you know even when you got a A lot of people complaining about an issue um it hasn't it's not like you know vter phone's immediately being being sued as far as I can sorry um with regards to developers to what extent are are we liable to neg negligence as a result of hacking um all right well I guess the okay the question is um how liable are developers to issues which flow from hacking I guess the first thing to say is that you know did you develop an app which you said was Secure um did you take reason will care in making it secure you know did you put a security system in place um so what I'm what I'm trying to apply the law the law is you've got a duty of care you know the duty of care may or may not be that you write a secure app it depends if someone says I just want an app it's only going to be me and my company using I don't need security then you know you've got an argument to say that it wasn't within the the scope of the duty that you actually produce a secure app but if you're producing an app that's out to the public and um you know people are going to be putting their private details um in into your app because it's a convenient app for saving credit card numbers or birthdays or whatever um then you've probably got an obligation to put security into that app if you failed to do that and um you know if the hacking was someone could just press a button and all this private information came out then you know that's probably you stuffing it up but if they' literally done some kind of hacking Wizardry to get in by finding some floor in some other system um then it's probably that that wasn't necessarily a breach of your duty of care because you did what was reasonable in the circumstances and it wasn't reasonable for you to design a system that couldn't be into by someone from Anonymous you know who spends all their days doing this that and the other I mean even if even if it was a breach of the duty then you've still got the question of what damage flowed from that breach and was that damage attributable to your breach or was it too remote so I guess the point is everyone asks can I be sued for but there's so many steps on the way the algebraic equation that you even if you get a B C D and E if you need F if you need the damage to not to remote and you fall over there then you can't they're going to Lo uh fail in their suit against you is is there a requirement of developers to develop software that's Pur you see more and more products on the internet the terms and conditions and like this product will be really unlikely to work in all circumstances it may break down it's so negative it's almost like if it worked at all you would be really surprised do they really get protection by writing such negative look um there's an the infinite number of answers to that question it depends on each particular fac rep oh sorry repeat the question the question is um can you say is it a requirement that software is fit for purpose and if you say in your disclaimer this software may not be fit for purpose does that get you out of an obligation to provide fit for purpose software well um there's an obligation that if you produce a product that it's that it's fit fit for the purpose that you say and so what it comes down to is what purpose are you saying this product is for so if if what you're trying to do is kind of by you know what's called fluff just say you know all sorts of stuff about how good you are you know best software developers in Sydney um that might not be really making a clear statement about what you're actually going to do and so what you do in the disclaimer is say well this is what we're going to do we're only going to do this particular piece of of work uh we're only going to solve this particular problem even though the the fluff says more than that so the issue is that you've got to decide what the purpose of the software is and if you're going to make software for that purpose it should be fit for that purpose so you got you need to limit what the purpose is if you're going to limit the yeah so the Australian consumer law Cuts in there it basically says if you buy something it's got to be it's got to be fit fit for purpose but there's a whole series of you know considerations in that if you're buying something for 99 cents then you know it might be that you shouldn't run run a multi-million dollar business on something that cost 9 cents like that doesn't make it's that's not the purpose of that app that you that run a multi-million dollar business all right how am I doing for time just keep keep keep going on all right um all right okay coming back to my question with Mr with Northwind proprietary limited I just want to highlight some of the issues that emerged or that could emerge in particular software projects and um and kind of highlight some of the I guess the solutions the first issue is um invoicing how many people here have a perfect invoicing system that invoices their time every every week ssw ssw does have a pretty good invoicing system and I think that um some pain that ssw suffered in the past led to this really good solution to invoice regularly because um what what invoicing regularly does it puts it does it does two things it puts everyone on notice of what your understanding of the contractual relationship is if you if you are sending an invoice on the Monday for the work you did in the previous week and you're billing them 40 hours then that other side is on notice that your understanding the contractual relationship is that you're billing them for your time that you spend if they then pay that invoice then they're basically in a sense agreed with what you done or if it's different to what the written document says they're kind of agreeing to a slightly different State of Affairs than what the written document says so it's really good from a contractual situation to send out regular invoices even when you're in a dispute even when you're having an argument with a client about invoices keep sending your invoices because it's continually showing that you're engag in in work and that you're expecting to be paid I think before a dispute operates it's good from a practical commercial sense because the worst thing in business is is a surprise so it it reduces it reduces surprises the second thing that can emerge in issues before where you have um Mr North Norwin says go and speak to you know Julie the secretary and get some instructions from her and do do the work that she says is to bear in mind that contracts can be both written they can be oral or they could be partly written and partly oral and you've got to bear in mind that when an oral conversation or an oral contract emerges what do you think you should doc that's right you should document it and how should you document it there conversation email well that's that's exactly right and who do you send that email to Mr northwin you start putting conversations in writing and you start see seeing the relevant people this is important as well when just a point of operations it how you do things I've got a contract I've got a contract with Adam he's delegated to you for uh management of it you and I have agreed on something are you saying I should send my email to Adam I think that's rude I should send it to you and CC Adam now have I then diluted the value of it by CC sorry um can you sorry can you repeat the question cuz I was distracted in my own mind you repeat the question basically asking does it make any difference if if they're in the two or the CC um well you should asked James Murdoch that isn't didn't that come up in the uh oh in the um in in that inquiry in in America in in the UK about the um the phone hacking I think there was a you know there's a an attachment or an email all the way down the line and it wasn't drawn to James's attention that a particular s of circumstance anwers was the case and uh he said no I never saw that email yeah I think I think it was sent to him but he said he didn't read it yeah look it was in an email down the line so there's a degree to which you should draw there's an answer to which you would if if I was acting for you I'd say no it doesn't matter as long as Adam got it that's all but I would say to protect your position send it for the attention of the person who matters who makes the decisions who's going to be able to do what um who's Authority you're relying on them delegating there there's a classic case in um in car Parks I think a judge by the name of Lord Denning who was a wonderful British judge and said all sorts of wonderful things he said that if you're wanting to wave or limit your liability and you're the owner of a car park there should be a big red hand pointing to the disclaimer that's that's you know a sign on the side of the of the car park that's what he wanted he wanted a big red cold hand saying read this disclaimer and there's a degree to which what he's saying is for the avoidance of Doubt make it very clear that the person who matters gets the information they need to get to so if Mr Northwind is the one who says go and speak to Julie about um this particular work then you email Mr Northwind and you say Mr Northwind as proud conversation XY Z so Cameron in our company um you have to CC the prodct owner in every case yeah so if somebody else is giving instructions as long as those instructions have the product owner CC that's fine yeah all right well that's a that's a company policy and I can't say whether that company policy would be effective if it came up in court as to whether or not the product owner had the Authority for that work it had had given the Authority for that work if the product owner's Authority was the case what one thing that matters in business is what's called a course of conduct if this is the way the parties operate over a long period of time it's pretty hard to say no you know that's not the what the contract says I'm TR to ask a question with regards to oral and particular the expectations from the sales people so I've been in a situation where sales people went in and did a sales job there's a big um travel agency Network in Australia and um it was like they said we promised the world and everything then the contract was was drawn up and then when we did the job U they said well hang on a second you said you do this as well and they went referred back to a conversation yeah happened as part of the sales process all right so I'll repeat the question because I've remembered to do that now after the fourth time what what happens when the written document doesn't isn't in Concord with the oral representations of the sales people uh and suddenly say someone says hey someone told me it was going to do this and it doesn't because and the contract doesn't say it well there's two aspects there oh there's a whole series of of questions there often contracts say um only things written in this contract are the terms of the contract and no representations outside of it are to be incorporated into this contract and on that basis you would say well the written documents doesn't say it so it doesn't get done however there's all sorts of ways around this kind of situation if you're fighting for the client on that side and and they would say well you we entered into a contract that it would do x with the salesperson that was a contract and that contract is a collateral contract and then we only entered into the second contract because we entered into the first contract and and so therefore even if you've got a clause which says you know in the second contract the terms of this contract are wholly comprise within this document if you got a second contract it's not as if this is just another term of that contract that you're trying to get into the second contract it's actually a a second contract that sits alongside so yeah there are always issues with with that um in terms of what sales people say a a really important part of a representation that a sales person makes is is it a promise did they promise in a legal sense that this was going to happen in this case they felt that they had we ended up doing yeah that that's right and and what that highlights that in many cases you take a commercial approach to disputes because um having a fight in court over that is just going to cost everyone a lot of money um and what it does mean is that salesp people need to be careful and they can't just rely on the fact that they're salesp people and whatever they say doesn't matter yeah um yeah so similar when an oral contract comes in place uh with variations variations happen all the time and um you you need to document um the variations that that of to to any contract that you go through the issue of authority who has Authority um in a company Adam you have a favorite term for who has Authority in company don't you you're talking about company something about organs or something oh yes yeah do you want me to tell us yes we had this situation that arose where um the client wouldn't pay for yes you on no I'm not I'll get closer if you can with the situation where oh 15 years 12 years ago we went to 12 years ago we went to court and um the judge had to decide whether we were going to get paid for the work we' done cuz we' clearly done work and we had clearly been given instructions to do the work so I assumed that meant they had to pay but the um the judge who handed out decision N9 months after it closed for some reason I always thought i' give the decision on the end of the day um very frustrating he um said I've decided that that all the bills where the product donor essentially was cced um had to be paid and any of the bills where it was just other people in the company without the um product donor being cced don't have to be paid because the because the or because the organs of the company didn't know maner or was that that's right and I said what the hell how does the company have organs I haven't heard of this anyway so the managerial the managerial organs of the the company must know and that's why I referred to it being important the product don't it was always CC yeah so it is you know when you're directed to do something by someone who doesn't normally have Management Authority um you need to kind of put a practical hat on is there's a whole series of rules about working out who has Authority in an organization to do certain things if you ask a lawyer whether you know a company has agreed to a particular group the first thing they're going to look at is is there a clause that says you know executed this document executed pursuant to Clause 127 Open brackets one Clos brackets of the corporations act or not and has it been signed by two directors or director secretary and all the rest like lawyers will drill down to executed documents to that particular degree and make arguments about whether it's been executed properly and agreed to by the company so if you're dealing with a whole series of users in a company and trying to get instructions from the about what to do you got to think very carefully about whether those users have authority to spend their company's money and so while if it came to court you may or may not get awarded the work that you do ing to what a user tells you to do it's a lot better to think carefully about making sure the person who you know does have authority to um to to to uh understands or knows the work's going on at at the same time sometimes if if you're a software operator and a contract says X it might be that you know work will only be done on the signature of so and so it might be that without anyone saying saying anything you just send up doing work that someone else tells you to do who's not that person that says you know must be authorized in writing by by Mr Northwind you just start doing work orth you know that Tim says hey can you do this if you then send an invoice say you know work requested by Tim and then northwin proprietary limited pay that invoice and that happens a number of times you it's almost like you developing a course of conduct where Mr Northwind had a contractual right to say I'll only pay for work that's been authorized by me in writing but he's what's called waved that right he said you know well I know I had that right but I didn't I didn't enforce it on the way through and I allowed work the Tim asked to be done um orally to be um to be paid for and so you know you've got to think practically you you can't manipulate your client or be deceitful in the way you go through but in the course of a contractual life often things are going to be done different to what the document says and sometimes that can work in your favor all right covered that all right this um next one without Prejudice Savers to cost has anyone seen that written on a piece of paper by a lawyer before I've seen the without prejudice not the rest right does anyone know what it means all right it's essentially the way the courts work is that they don't want everyone going to court they want to stop people going to court as much as possible cu the courts are busy judges maybe would perhaps to have an earlier and longer morning tea than they normally get and um they still have lots of lots to work work to do and the courts are very stretched they're paid for by you know state governments for for the New South Wales New South Wales courts and um it's very expensive to run so there's a policy that basically says we want parties to be able to solve their problems between themselves without having to come to court and there's actually a a a section in The Evidence Act which says that you can't aduce evidence of negotiations in a proceeding um but just to avoid any am am ambiguity or misunderstanding as to whether something's a a Mis A a negotiation or not there's this phrase called without prejudice Sav is to cost which you can preface in any um it's not a magic phrase but it's a useful phrase it's in in any oral discussion or in a written document where you're basically trying to compromise your position with with your client as an example so if you've sent a client a bill for $115,000 and they say look we'll pay $10,000 then what you can do is and you know all these kind of things in any situation you should speak to a loyer to get particular advice but if you preface your letter back saying look without pred Savers to cost I'll agree that to pay that you pay me $112,000 instead of the $15,000 in full and final settlement of the offer if you don't resolve the dispute and it comes to court later on the other side can't say look he admitted that the work was only worth $112,000 otherwise he wouldn't have said I'll take $122,000 we are now arguing about over how how much the work the work is worth or whether it should be paid they can't then bring that up as evidence against you as an admission that you knew the work was worth less than what you were actually trying to get the $155,000 um and so while I say yes it's not it's not a a magic phrase in any sense but it's a useful phrase to um uh try and encourage negotiations where you can openly say something that's less than your contractual rights as you would see them without prejudicing your contractual rights um Cameron I want to push back on that being a useful phrase because I can tell you that um as soon as you mentioned that the relationship is terminally damaged by putting that stuff all right well terminally is a bold statement and so you've yeah it is a it is a commercial question to think about whether you want to do this but I would say speak to a lawyer get the lawyer to tell you to do it and then blame your lawyer and people people always hate lawyers they just just say look my lawyer I don't know why but my lawyer told me I had to say this um in order to protect myself so sorry but I've got to say it but you wouldn't be in that situation if you're billing money every week and they haven't been paid for 3 or 4 weeks then you're at a relationship probably where things aren't working now yeah uh so you would then to say well look you pay me 75% call quit that's when you would use that situation that's that's right and look yeah that that's right it might be that the relationship is broken down already but yeah Greg Greg's question was simply um hasn't the relationship broken down anyway so why do you bother trying to be polite is that what you're saying yeah basically yeah so I I guess the point is in any SpaceTime Continuum to use the language of Back to the Future which favorite movie of M there's a happy relationship and there's a destroyed relationship and there's an infinite number of points in in between my my point is is that in any situation you want to be very careful about waving your contractual position or indicating that you're willing to accept less than your contractual position um unless you do it on a without prejudice basis because that can be used May well they may try to use that against you down the line so my point as a lawyer is protect your contractual position if you want to find a way to try and make it that sound nice or blame your lawyers for the language that's fine but our advice is protect your position commercial considerations is is another is another aspect which we don't provide advice on that's not what lawyers give a