Every small business has to deal with contracts; most business relationships will involve some sort of contractual commitment or obligation.
Ensuring contracts are put in writing and that each party understands their obligations can help you avoid disputes. If you are using contracts, making sure a dispute resolution process and a way for handling complaints are included, will make it easier to resolve problems if they arise.
Before entering a contract you are recommended to always seek independent legal advice.
If you are in a contractual dispute it is advisable to:
- check your contract to be clear on your facts
- discuss the issue with the other party or parties
- note any discussions or agreements in writing
- write a letter to the other party
- if you cannot reach agreement, contact us for further assistance, including access to our dispute resolution service
- seek legal advice.
Our free dispute resolution service can (DRS) help you resolve disputes involving other businesses or Government departments. The types of disputes we can help with are listed below. Watch this short video for a quick overview of DRS.
Leasing business premises
If disputes between tenants and landlords arise it’s important they are resolved as cost-effectively, and with as little damage to the relationship, as possible.
The first step is to read the lease and other associated documents to understand your rights and obligations. In many cases, a well-written lease will make it clear what both parties have agreed.
If the lease or other documents do not clarify the issue contact one of our commercial leasing advisers for guidance or seek independent legal advice.
Retail shop lease disputes
If your dispute relates to a retail shop lease you can contact us for help to resolve the matter. Our case managers will assist both parties to clarify or resolve the issues through negotiation and mediation. In relation to most retail leasing disputes you will need to first attempt to resolve the issue through our dispute resolution service, before you can make an application to the State Administration Tribunal (SAT).
Non-payment or non-performance of goods and services
Under Australian Consumer Law (ACL) your business is considered to be a ‘consumer’ when you purchase goods and services that are:
- valued at less than $100,000
- valued at more than $100,000 and are normally bought for personal, domestic or household use
- commercial vehicles or trailers used mainly to transport goods on public roads
In these instances you may be entitled to a range of remedies under the ACL consumer guarantees provisions if something goes wrong. If a dispute arises in relation to goods or services provided in the course of your business our dispute resolution service may be able to help.
If your business supplies goods and services to customers you must provide consumer guarantees as set out in Australian Consumer Law.
Action to take
Non-payment in the construction industry
In Western Australia, there is legislation that provides a rapid adjudication process to resolve building and construction sector payment disputes.
For contracts entered into from 1 August 2022, the Building and Construction Industry (Security of Payment) Act 2021 will apply.
The Construction Contracts Act 2004 applies to contracts entered into prior to 1 August 2022.
These Acts allow for the appointment of an adjudicator (a registered, trained professional who is experienced in construction contract administration and dispute resolution) and sets a strict time limit on the process so decisions can be made quickly and payment is not held up.
Adjudication claims must be made within 90 business days of the payment dispute arising; this could include the amount being in dispute, payment not being made on time or not paid in full.
The Department of Mines, Industry Regulation and Safety website has more information on payment disputes in the construction industry:
- Information for disputes over contracts entered into prior to 1 August 2022 (falling under the Construction Contracts Act 2004)
- Information for disputes over contracts entered into from 1 August 2022 onwards (falling under the Building and Construction Industry Security of Payment) Act 2021.
Disputes with government departments or agencies
Sometimes a dispute may arise between a business and a government department or agency. Our dispute resolution service may be able to help by contacting the relevant government body with a view to clarifying the issue and resolving the dispute.
Most franchise agreements will include an obligation for both parties to attempt to resolve issues through a process of dispute resolution, including mediation. Parties covered by a franchise agreement also have rights and obligations under the Franchising Code of Conduct to consider. The Australian Competition and Consumer Commission (ACCC) administers and enforces the Code and can be contacted for further information.