Welcome, everyone, to our webinar on common disputes in retail and how to avoid them.
My name is Dimi Tong and I am a senior lawyer here in LegalVision’s disputes team. My co-host is Julia Cremona, a Practice Leader in the disputes team.
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Today we will be discussing common types of disputes for retail businesses, what to do when faced with a dispute, early dispute resolution and how to resolve your dispute without going to court, what happens if you go to court, tips to protect your retail business, and then we will finish with some Q&A.
Now Julia will speak about common types of disputes for retail businesses.
Starting or managing a retail business? Download this free guide to learn the key legal essentials, from contracts and employment to data protection and brand protection.
Common Types of Retail Disputes
Julia Cremona:
Thanks, Dimi. What types of disputes commonly arise for a retail business?
First and foremost, contract disputes. These generally arise with parties such as suppliers, manufacturers or customers. They commonly involve issues like late deliveries, wrong products, quality issues and payment disagreements.
For example, you have ordered 500 units of a product for a Christmas rush sale. They arrive two weeks late, 200 are the wrong colour and your supplier is now chasing payment for the full amount. Does this sound familiar? That is the reality of the type of contract disputes we see in retail.
Sometimes your contract will have express clauses or warranties that deal with these issues. Warranties are essentially extra promises a business makes about product quality or how problems will be fixed.
Here is what many retail businesses do not realise. Even beyond what is in your written contract, you are also subject to Australian Consumer Law guarantees. These include guarantees that goods are of acceptable quality, match descriptions or samples, or are fit for a particular purpose.
Depending on the issue, a variety of remedies may be available, ranging from repairs and replacements through to refunds and compensation.
Another recent theme for retail businesses is unfair contract terms. These usually apply to “take-it-or-leave-it” standard form agreements that create a significant imbalance in rights. This can arise in contracts with suppliers or manufacturers, or in standard agreements your retail business has with customers.
Common examples include unilateral rights to vary prices or product specifications, one-sided termination clauses, automatic renewals without proper notice, and overly broad indemnities or limited liability clauses that shift all risk onto one party.
Unfair contract terms in standard form contracts can be unenforceable if considered unfair. For example, if they cause a significant imbalance in rights and obligations, are not reasonably necessary to protect legitimate business interests, and would cause detriment if relied upon.
Remember that you do not always need a written contract. A legally binding contract can arise through actions or communications.
Another common dispute for retail businesses is lease disputes. These frequently involve fit-out requirements and costs, rent reviews or increases, responsibility for maintenance and repairs, lease renewal obligations, and make-good obligations at the end of the tenancy. These disputes can seriously impact cash flow and operations.
For example, three years into a five-year lease, the air conditioning breaks down in the middle of summer. Your landlord says it is your responsibility to fix. You say it is theirs. Meanwhile the shop is hot and customers are walking out. This shows how such disputes affect cash flow and day-to-day operations.
It is also important to check whether your lease is a standard commercial lease or a retail lease, as retail leases are governed by specific legislation with additional tenant protections.
Another common category is intellectual property disputes. These typically involve infringement of branding, designs or trade marks, such as unauthorised use of logos, brand names or product designs, or passing off goods as another business’s.
It is not uncommon to see a competitor using a confusingly similar name or logo. In these disputes you must be vigilant in protecting your own IP while ensuring you do not infringe another’s.
Another common dispute is partnership and company disputes. Where a retail business operates through a company or partnership, internal disputes may arise about business direction, profit sharing, misappropriation of funds or exit arrangements. These can be particularly damaging because they affect core operations and relationships.
Finally, employment disputes regularly arise. Retail businesses rely heavily on employees, and common issues include breaches of confidentiality or employee restraints such as non-compete or non-solicitation clauses. Protecting business information and client relationships while managing employees makes well-drafted employment agreements essential.
The matters we discuss moving forward are general and apply to most disputes that could arise in a retail business.
What to Do When a Dispute Arises
So, let us get practical. Disputes can happen, but what should you do?
First, document everything. Put everything in writing. Gather documents and take notes after calls or meetings. Contemporaneous records — records created at the time — are crucial evidence if a dispute escalates. It is easy to forget details later, so writing things down helps.
A good habit is sending a follow-up email after conversations summarising what was said or agreed. Throughout this process, make your position clear, remain professional and aim for a solution if possible.
Second, narrow the issues. Be clear about what the dispute is about. Often disputes accumulate multiple grievances over time and become messy. Breaking issues into specific points makes them manageable and identifies what matters most.
Third, seek external help. Organisations such as Small Business Commissions, Fair Trading or consumer affairs agencies, or industry bodies like ombudsmen, provide guidance and sometimes dispute resolution services.
Next, review your contracts. Check for dispute resolution clauses such as mediation requirements, notice periods or arbitration. These mechanisms are often more cost-effective than court and sometimes mandatory before litigation.
Contracts also usually specify governing law and jurisdiction, which affects strategy and cost.
Finally, obtain legal advice early. Understanding your legal position and options informs strategy and decisions about negotiation or litigation.
You may choose direct legal involvement or arm’s-length assistance. Lawyers can advise in the background while you negotiate, or act directly. The right approach depends on strategy and budget.
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Early Dispute Resolution Options
Dimi Tong:
Thanks, Julia. What happens when you face a dispute and what early resolution options exist?
First, try to talk it out. Arrange a call or meeting with the other party. Many disputes arise from misunderstanding and can be resolved through direct dialogue. Use neutral language, avoid accusations, focus on facts and desired outcomes, and approach discussions collaboratively.
For example, your supplier may think delivery was required by month-end, but you needed it by the 15th. Or your landlord may not realise an air-conditioning failure is affecting trading. These misunderstandings can often be resolved quickly.
If that does not work, put your position in writing or have your lawyer send a letter. Written communication records your position, shows seriousness and allows proper consideration. Maintain a neutral tone, explain what happened, its business impact and the desired outcome. Provide a reasonable response timeframe, usually seven to fourteen days.
Consider making a settlement offer — a middle ground. This demonstrates reasonableness and willingness to compromise. Sometimes non-financial solutions are valuable.
Few disputes end with one party getting everything. Consider minimum acceptable outcomes, realistic expectations and the cost of continuing. Accepting 70% quickly may be better than fighting for 100% over years.
Also consider leverage: ongoing relationships, reputation, legal strength and timing. Use leverage carefully; threats often backfire. The goal is quick, cost-effective resolution allowing both parties to move forward.
Costs of Litigation
Dimi Tong:
If disputes escalate to tribunal or court, costs increase. Financial costs include legal fees potentially reaching tens or hundreds of thousands. There are also other costs.
There are time costs — time you could spend growing your business, serving customers or developing products, instead spent in meetings with lawyers, reviewing documents and attending court.
There are stress costs. Ongoing disputes are stressful and may affect your health and relationships with family and staff. I have personally seen business owners become consumed by disputes, which affects their entire business.
There are opportunity costs — missed business relationships and innovations while focusing on the dispute.
Finally, there are relationship costs. If this is a supplier, customer or landlord you need to work with again, going to court will almost certainly damage that relationship. When you add these costs up, resolving disputes early can be a good investment even if compromise is required.
Mediation
We will talk briefly about alternative dispute resolution, particularly mediation.
If direct negotiation is not working, mediation is often the next best option. An independent third party — the mediator — helps facilitate discussion. The mediator is neutral and does not decide outcomes. Their role is to help both parties communicate and explore solutions.
Unlike court, where a judge decides, in mediation the parties agree on the solution. Mediation is confidential, relatively inexpensive and can usually be arranged within weeks rather than months or years. Most commercial disputes that go to mediation settle on the day or shortly after.
Some states provide cost-effective mediation services, such as the Small Business Commission in New South Wales.
Once settlement is reached, we recommend entering into a settlement deed or settlement agreement. This is a formal legal document recording the settlement terms — what each party will do, when, and what happens if they do not comply.
It provides clarity and certainty so both parties share the same understanding. It is enforceable — if breached, it is simpler to enforce than restarting the original dispute. It provides finality through release clauses preventing future claims on the same matter. It is usually confidential, helping protect commercial relationships and reputation.
What Happens if You Go to Court
Let us talk about what happens if you go to court.
Court proceedings begin when one party files a claim and the other responds. The court depends on the type and value of the dispute.
These processes usually take a long time — often six to twelve months to hearing, sometimes longer. They require significant ongoing attention.
They are expensive. You pay lawyers to draft documents, affidavits, defences and replies, plus court filing fees. Some small claims or tribunal matters may be run without lawyers, but legal advice is still recommended.
In some cases you also engage a barrister as well as a solicitor. The solicitor manages the case and strategy. The barrister is an advocacy specialist who appears in court and advises on complex law. Higher-court or complex cases usually require a barrister.
Many matters resolve before trial — even the day before or morning of trial — after most legal costs have already been incurred. If most cases settle eventually, settling earlier may be preferable.
Court outcomes are uncertain and unpredictable. Judges interpret evidence differently, and precedent may be unclear. Your lawyer can assess prospects but cannot guarantee outcomes. Evidence may also be perceived differently than expected.
Even if you win, you may not recover all legal costs. If you lose, you may pay your own and part of the other side’s costs.
Court proceedings are generally public. Judgments are published and searchable online, creating reputational risk. Alternative dispute resolution is confidential.
Finally, consider insurance. Some business insurance policies include legal expenses cover. Public liability may cover injury or damage disputes. Professional indemnity may cover disputes about professional services.
Practical Tips to Protect Your Retail Business
Julia Cremona:
With all that said, here are practical tips for protecting your retail business.
First, use written contracts with clear terms and conditions where possible. Written contracts are the first line of defence because verbal agreements create ambiguity and are harder to enforce.
Second, be specific about essential terms important to your business — payment terms, quality standards and delivery terms. Avoid vague language such as “reasonable quality” or “prompt payment”, which invites disagreement.
Third, set up clear policies for handling customer complaints. A documented complaints process ensures consistency, resolves issues early and demonstrates responsiveness. It should cover how complaints are made, timeframes, responsible staff and available remedies.
Another point is to be familiar with your business documents and review them regularly. Do not simply file contracts away after signing. Ensure key staff understand obligations and rights. Set reminders for important dates such as lease renewals, termination notice periods or milestones. Annual legal review helps ensure documents reflect business practices and current law.
Get advice before signing significant agreements such as leases, supply contracts, franchise agreements or partnerships. Early legal advice can prevent later disputes.
Keep organised records of transactions. Good record-keeping allows quick responses to disputes with supporting evidence. Consider a document management system.
Build good relationships with stakeholders — suppliers, landlords and customers — because goodwill helps resolve issues. Regular communication, timely payments, reasonableness and respect all support flexible problem-solving.
Be professional and courteous. Stay calm even under pressure. Maintain professionalism to prevent escalation. Pause before responding, focus on facts rather than personalities and approach issues collaboratively.
Finally, understand disputes do occur and act quickly. Warning signs include late payments, complaints or communication breakdowns. Address concerns early — through discussion, meetings or advice.
Closing
That brings us to the end of the main part of this webinar. You may find our publication on legal essentials for retail businesses useful — accessible via the QR code or resources tab.
You may also be interested in our upcoming event on Payday Super: what employers need to know about the new rules, on 4 March at 11:00 am. You can register via the link on screen.
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