Assignment of Business Goodwill without the Business Name: A Franchise in Disguise

Abstract

Even in 1901 it was said that "goodwill is bought and sold every day. It may be acquired... in any of the different ways in which property is usually acquired. When a man has got it he may keep it as his own." Despite agreement as to its proprietary nature, one hundred years on there is markedly little agreement about what exactly goodwill is or what comprises it. In the seminal judgment of Lord Macnaghten in Inland Revenue Commissioners v Muller & Co's Margarine Ltd it is described as being an 'attractive force' and composed of 'elements'. In Australia, a joint judgment of the High Court of Australia describes it as 'a valuable right or privilege' to make use of such forces or elements, a 'quality or attribute' that derives from 'sources' being the assets of the business. The intention of this paper is not to revisit the broad question of 'what is goodwill', but rather to focus more specifically on the legal relationship between business names and goodwill in business acquisitions.