In November 2019, Manly Ltd, a manufacturer of heating systems, was taken to court by one of its competitors, Heating Lt

[answerhappygod]

In November 2019, Manly Ltd, a manufacturer of heating systems,
was taken to court by one of its competitors, Heating Ltd, under
the Competition and Consumer Act 2010(Cth). Heating
alleged that Manly sought to enter into exclusive agreements with
several retailers that they would only stock Manley’s
products. While manly incurred $240000 in legal costs in
defending the action, the case was settled out of court. The terms
of the agreement on 20 February 2020 provided that Manly would pay
Heating $$500,000 immediately, and an amount equal to 3% of profits
over the next two years. For 2018/2019 the profit was estimated to
be $660,000 and the year after $780,000. Advise Manly on the
deductibility of this expenditure. Make sure you include the
relevant sections of the legislation.
Subject: Australian taxation law