Supplier disputes are one of the most common commercial issues affecting Queensland businesses. Whether a supplier delivers late, provides defective goods, overcharges, or breaches your agreements, these problems can disrupt operations, damage client relationships, and impact cash flow.
This guide outlines your legal rights under Queensland contract law and the Australian Consumer Law, the practical steps to take, and how to protect your business from ongoing supplier issues.
Common Types of Supplier Disputes
Supplier problems usually fall into one of the following categories:
- Non-delivery or late delivery – Missed deadlines that impact your customer commitments.
- Quality defects – Goods that are damaged, incorrect, or fail to meet agreed specifications.
- Billing disputes – Overcharging, hidden fees, or invoices for work not completed.
- Exclusive dealing breaches – Supplying your competitors despite exclusivity arrangements.
- Intellectual property misuse – Using your designs, confidential information, or proprietary materials without permission.
Your Legal Rights When Suppliers Breach Agreements
Under Queensland contract law and the Competition and Consumer Act 2010, you may have rights to:
- Reject defective or non-conforming goods
- Claim damages for financial losses, including lost profits and additional costs
- Terminate the agreement for serious or repeated breaches
- Seek specific performance (forcing the supplier to meet their obligations)
- Rely on consumer guarantees that can still apply in many business-to-business situations
Immediate Steps When Supplier Problems Arise
Act quickly and collect as much evidence as possible:
- Document everything – emails, delivery records, complaints, test results.
- Review your agreements – including notice requirements, quality standards, and dispute clauses.
- Quantify losses – customer penalties, delays, alternative sourcing costs, and lost sales.
- Preserve evidence – defective goods, photos, samples, and inspection reports.
- Send formal notice to the supplier outlining the breach and required remedy.
Contract Remedies vs Consumer Law Protections
Your available remedies depend on both the contract terms and consumer legislation.
Contract-based remedies may include:
- Liquidated damages
- Right to source alternative supply at the supplier’s cost
- Service-level penalties
- Termination rights
Consumer law protections may include:
- Guarantees that goods are fit for purpose
- Rights to repair, replacement, or refund
- Protection from misleading or deceptive conduct
- Relief for unconscionable behaviour
Both can apply simultaneously in Queensland commercial disputes. For a full breakdown of when consumer guarantees apply to goods and services purchased by your business, refer to the ACCC’s Consumer guarantees – a guide for businesses and legal practitioners.
Effective Dispute Resolution Options
Businesses in Brisbane, Gold Coast, Sunshine Coast, Ipswich, and across Queensland commonly use:
- Direct negotiation – Often the quickest and most cost-effective.
- Mediation – Structured negotiation with an independent mediator.
- Expert determination – Useful for technical quality or specification disputes.
- Arbitration – A private, binding process similar to court proceedings.
- Court litigation – Necessary for complex matters or when urgent orders are required. For claims involving commercial debts up to $25,000, the Queensland Civil and Administrative Tribunal (QCAT) may provide a faster, lower-cost path.
Calculating Your Damages and Losses
You may be able to claim:
- Direct losses – alternative suppliers, urgent freight, or remedial work.
- Consequential losses – lost profits, customer penalties, and business interruption.
- Mitigation costs – steps taken to reduce the impact of the breach.
- Legal or professional fees – depending on the contract and court discretion.
Example: Supply Chain Disruption
A Queensland manufacturer received 5,000 defective components days before a major product launch. As a result, they incurred substantial customer penalties and had to secure replacement parts at significantly higher cost.
The available remedies included:
- Rejecting the defective goods
- Recovering rush-order and replacement expenses
- Claiming penalty costs
- Terminating the supplier agreement
Managing Supplier Relationships During Disputes
Where possible:
- Keep the dispute separate from other ongoing supply arrangements
- Follow any notice or escalation procedures in the contract
- Consider commercial realities – some relationships are worth preserving
- Protect confidential information throughout the process
When to Consider Replacement Suppliers
You may need to change suppliers if you experience:
- Repeated quality issues
- Signs of insolvency or financial instability
- Breaches of exclusivity arrangements
- Recurring compliance or safety failures
Preventing Future Supplier Disputes
Reduce the risk of repeat issues by implementing:
- Clear purchase agreements with detailed specifications and remedies
- Regular performance reviews of key suppliers
- Diversified sourcing to avoid over-reliance on one supplier
- Robust quality assurance and incoming goods testing
- Financial monitoring of supplier stability and insurance coverage
Insurance Considerations
Certain insurance products may help manage supply-related risks:
- Trade credit insurance
- Product recall insurance
- Business interruption cover
- Legal expenses insurance
The Cost of Legal Action vs Commercial Settlement
Before proceeding to formal litigation, consider:
- Likely legal costs
- Timeframes (litigation can run 12–24 months)
- Impact on the supplier relationship
- Whether the supplier can afford to pay any judgment
- Whether a negotiated settlement may deliver a faster or more practical outcome
When Professional Legal Help is Essential
Speak with a commercial lawyer when:
- Potential losses exceed $25,000
- The dispute affects multiple customers or major contracts
- You need urgent injunctions or orders
- The supplier alleges you have breached the agreement
- Complex contract interpretation is required
Need Strategic Advice for a Supplier Dispute?
If a supplier is letting your business down, our commercial litigation team has extensive experience resolving trade disputes for Queensland businesses — from Brisbane and Gold Coast to Sunshine Coast and Ipswich and all over Queensland.
Protect your business reputation. Get strategic legal advice before the damage grows.
Contact Bennett Carroll Solicitors:
- Phone: 1300 334 566
- Email: Book a commercial dispute strategy session
- Offices: Brisbane, Gold Coast, Sunshine Coast, Ipswich
- Remote service: Available across Queensland via phone, email, and video
Protect your business reputation. Get strategic legal advice before the damage grows. Contact our Commercial Litigation Lawyers today.
