Resolving a dispute with your supplier

Having a good working relationship with your suppliers is vital to ensure your business runs smoothly. Although it’s likely you’ve taken the time to find the right suppliers for your business and build up a good supplier relationship with them, it’s still important to know what to do if any issues arise.

How to resolve a supplier dispute

Most disputes can be resolved quickly and efficiently using a common sense approach. If a dispute arises with your supplier, try these steps:

  1. Check your facts - if you have a written contract, the first thing to do is to read it through carefully. This can help you understand the problem more clearly and get your facts right before you take any action. There may also be a dispute resolution clause in the contract that needs to be followed.
  2. Contact your supplier as soon as you can and explain the issue. You may be able to find a simple resolution by simply talking it through.
  3. Listen to what they have to say – put yourself in their position and try to see the situation from their point of view as well.
  4. Keep records to help you keep track of what has happened. You may need these records if you need to take the matter further.

Remember – the issue could be a simple a misunderstanding. There may be facts or background that you don't know about, so it often pays to give the supplier the benefit of the doubt before you take any action.

The right suppliers for your business can be hard to come by, so you don’t want to lose the supplier relationships you’ve already spent time developing.

What should I do if I can’t resolve the dispute?

While many disputes can be resolved by simply talking with your supplier and working it out between the two of you, there may be instances where you won’t be able to come to an agreed resolution.

If you’re having difficulty resolving the issue, there are agencies you can contact for help, depending on the situation and the state or territory you operate in.

Here are some useful contacts and places to go to for help and advice:

Taking legal action

If you’ve tried all options and are still unable to resolve the dispute, you might consider getting independent legal advice about the actions that you can take. For advice, try your local community legal centre, legal aid office or your own lawyer.

In some cases, you may be entitled to take your complaint to the small claims court or tribunal in your state or territory.

If your dispute involves large sums of money, you may be able to take private legal action. However make sure that you get legal advice before you take this step, as legal action can be expensive and there’s no guarantee that you’ll be successful.

Tips for preventing disputes with your suppliers

While it’s important to know how to handle disputes when they arise, it’s even better to prevent them from happening in the first place.

There are a number of things you can do to prevent issues from arising and avoid disputes before they happen. Here are two tips to get you started:

  • Negotiate a good contract - by signing a written contract, both parties are clear on their obligations from the start. Make sure your contract includes:
    • the goods or services to be provided
    • price
    • payment terms
    • timeframes
    • delivery terms
    • any other terms or details required.
  • Make sure you know who you’re doing business with - do background checks on your suppliers before you sign with them. Look up their ABN to identify the person operating the business, and search them through the ASIC Business Checks app.

Find out more:

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