The Laws of Fashion

As you know by now, every week we welcome talented bloggers to capture what Threads, the Business of Fashion Accelerator Program is all about. They play a key role in engaging with industry related discussions and get an exclusive insiders look on the program. For week 10 Fashion Law module, our Port Elizabeth Classroom was joined by Lifestyle blogger,  Chloe Farley


On the 5th of February, the Threads’ entrepreneurs met for their weekly lesson in fashion. This week’s class dealt with the important topic of South African fashion law and aimed to teach the entrepreneurs how laws apply to their businesses in the fashion industry. Legal knowledge is essential for all entrepreneurs as it not only protects their businesses, but also their ideas. A fact the entrepreneurs soon learn from SA Fashion Law advocate and director, Sumaiya De’Mar.

Fashion Law is practiced internationally in destinations such as the United Kingdom, Australia and now South Africa. One of its main objectives is to protect one’s intellectual property and intangible assets. “As a designer, you want to protect these important parts of your business as they stop someone from benefitting from your hard work,” says De’Mar. There are various types of tangible assets such as copyright which protects original art, trademarks which protect the marketing aspects of a business and patents which protects new technology and machinery.

Sumaiya De'Mar - SA Fashion Law Advocate & Director - Business of Fashion In Africa

After discussing intellectual property, De’Mar went on to explain the business foundations. According to De’Mar, every entrepreneur needs to adhere to the following legal requirements in order to protect their businesses and remain legally sound. One of the most important requirements pertains to registering a business with the Companies and Intellectual Properties Commissions (CICP) and the South African Revenue Service (SARS).

Registering a business is extremely important as it not only gives a business an essence of professionalism but also prevents other businesses from using the same name. “Having a registered business name really makes a difference, especially when interacting with clients,” Explains De’Mar. Other business foundation requirements include utilizing a confidentiality agreement, which is essential when disclosing business information to a third party. As well as an employment contract, which allows one to know the basic conditions of the South African employment act.

 

 

Sumaiya De'Mar - SA Fashion Law Advocate & Director

Sumaiya De’Mar Video Conference from Cape Town Hub with Johannesburg, Durban and Port Elizabeth Hubs.

However, the legal requirements do not stop there. Entrepreneurs should also take legal precautions and actions pertaining to the eCommerce side of their businesses. These actions include registering a domain name, implementing a privacy policy, incorporating website terms and conditions and most importantly, licensing. “Licensing is what you use to make sure you benefit when aspects of your business are sold or used by third parties.” Explains De’Mar. Therefore, when you choose to sell a product on a third party website, such as Spree or Zando, it is essential to implement a licensing agreement in order to make sure your business benefits from that sale. In this way, a license allows your business to benefit from a passive income.

The final aspect of fashion law discussed during the class pertained to contracts in the fashion industry. According to De’Mar, “Business owners often underestimate business contracts, but they are important as they make people more inclined to work with you.” The first type of business contract De’Mar chose to discuss was a manufacturing agreement. This type of contract is essential to all entrepreneurs who are outsourcing manufacturing to third parties as they stipulate all responsibilities and contain all clauses and quality agreements. This type of contract is particularly important in ensuring that your original patterns are not reused by the manufacturer. The second type of contract discussed is known as a consignment contract. This type of contract is essential when placing your products in a retail store whereby they sell it on behalf as it makes sure your business benefits from this agreement and outlines each party’s responsibilities. The third and final agreement discussed is known as a service level agreement. “A service level agreement is an agreement between two parties in order to achieve a business objective,” Explains De’Mar. Therefore, it is a general agreement that stipulates information such as responsibility and timelines. This type of agreement would be particularly beneficial when organizing events such as fashion shows.

During the Threads class on fashion law, the entrepreneurs learnt that they do not need to study law in order to be informed and utilize the laws that govern and protect their industry. Courtesy of Sumaiya De’Mar and Threads – Stitched by Standard Bank, the entrepreneurs will be able to take what they have learnt about intangible assets and intellectual property, business foundations as well as contracts in the fashion industry in order to take their businesses to the next level while remaining legally sound.

 

www.thechloerose.com 
A South African girl who has a passion for informing and connecting others to information that aims to better the readers lives.