A recent survey* of small businesses shows how to avoid an expensive and disruptive dispute.

Unsurprisingly late payment was the single biggest reported cause of disputes.

Although 60% of businesses who had been though a dispute recently thought the dispute was dealt with fairly, more than half thought the time and effort required was unreasonable.   The changes that the businesses said they would take to prevent another serious dispute were:

  • More clarity or detail in the contract (18% of respondents)
  • Have a formal contract in place (17% of respondents)
  • Pay more attention to the implications of the contract (8% of respondents)

None of these responses are surprising.  A good proportion of the disputes we see involve people doing business where either:

  • There is no written agreement at all and a “he said” “she said” argument emerges
  • There was a written document (often a standard invoice or terms and conditions) but it does not deal with everything or there was a separate “handshake” deal
  • Someone signed a written document either without reading it carefully or did not understand what it meant.

When disputes blow up we can help you present your argument and help negotiate the best possible outcome  but we would rather help you avoid the dispute in the first place.

A few tips:

  1. Use a written contract for dealing with suppliers and contractors – it can be simple but make sure it  protects you if the goods or services provided don’t meet your expectations.
  2. If you change the deal, get it written down – preferably in the contract but if not, at least in an email to the other business.
  3. Read agreements before you sign them and make sure your staff know not to sign contracts or agreements without checking with their manager first.

If you are in a dispute which is headed to court it is important to work with a pragmatic lawyer who looks for a strategy to negotiate an acceptable outcome quickly.  Last year we helped a business who was let down by a supplier (with no written contract terms) and another business who signed a document relying on unwritten promises.  Both court cases were resolved within four months.

At Rankin Business Lawyers we will give you a realistic assessment of your options and try to get you back to focusing on running your business as soon as possible.

Fiona McLay, Special Counsel

*hyperlink: https://www.asbfeo.gov.au/sites/default/files/Access%20to%20Justice%20report.pdf