Commercial disputes can be expensive, time-consuming, and damaging to your business reputation. Yet many of the disputes we see could have been avoided with early legal advice or clearer documentation.

Understanding the common legal mistakes that lead to disputes is essential for any business looking to reduce risk and stay focused on growth.

Here are some of the most common pitfalls we see when it comes to commercial dispute resolution.

Poorly Drafted Contracts

Contracts are the foundation of most business relationships. But when key terms are vague, missing, or inconsistent, it opens the door to confusion and disagreement.

Many commercial disputes arise from:

  • Verbal agreements or handshake deals without a written contract
  • Boilerplate templates that don’t reflect the real terms of the deal
  • Failing to include key clauses like termination rights, payment terms, or dispute resolution procedures

If a contract is challenged and the terms aren’t clear, a court will have to interpret the intent of the parties. That uncertainty can cost you.

Not Documenting Business Arrangements

Too often, business owners rely on trust or verbal agreements when starting out, especially when working with friends, family, or long-time colleagues. While strong relationships are valuable, they don’t replace the need for legally binding documentation.

Without formal agreements in place, it’s easy for confusion or conflict to arise later. For example, if your business doesn’t have a shareholder agreement, even basic decisions like profit distribution, ownership changes, or voting rights can become major sources of disagreement. These issues often only surface when someone wants to exit the business or a dispute occurs.

If your business involves co-founders, investors, joint ventures or partnerships, it’s essential to document your arrangements properly. 

A well-drafted agreement should outline roles, decision-making authority, dispute resolution processes, and what happens if someone leaves the business.

Employment Law Oversights

Employment-related issues are one of the most common sources of disputes for growing businesses. The problem usually starts when the working relationship isn’t clearly defined from the outset.

Misclassifying employees as contractors, failing to provide Fair Work-compliant contracts, or mishandling performance management can all lead to legal claims. Inconsistent records or outdated agreements make things even harder to defend if a complaint is lodged.

If you’re expanding your team, it’s worth reviewing your employment practices before problems arise. Proper legal advice can help you stay compliant and protect your business.

IP Disputes Are More Common Than You Think

Intellectual property is often one of the most valuable assets a business has. But it’s also one of the most overlooked when it comes to legal protection.

Problems can arise when:

  • Trade marks haven’t been registered or are unenforceable
  • Copyright is assumed, but ownership hasn’t been assigned in writing
  • Former employees or contractors use your content or branding without consent

If you don’t have written agreements or registered protections in place, you may not be able to stop someone else from using or copying your IP.

Early action is key. Make sure ownership is clearly assigned, and register your trade marks before you go to market. It’s much easier to prevent a problem than to fight over it later.

Overlooking Commercial Lease Terms

Lease agreements often come with terms that significantly impact your ability to exit, sublet, or renegotiate.

Disputes we often see involve:

  • Unclear clauses around repairs, maintenance, or outgoings
  • Disagreements over renewal rights or rent increases
  • Issues with make-good obligations at the end of the lease

These issues can result in costly legal action if not clearly understood before signing.

Always have your lease reviewed by a commercial lawyer who understands your business goals. They can help you avoid risks and negotiate terms that work in your favour.

Preventing Disputes Starts With the Right Legal Foundations

Disputes rarely start as major legal battles. Often, it begins with a missed payment, a vague contract, or an assumption that turns out to be wrong.

To reduce your legal risk, take proactive steps before problems arise:

  • Use properly drafted contracts for clients, partners, and suppliers
  • Keep employment records and agreements current
  • Register your trade marks and protect your IP
  • Have commercial leases reviewed before signing

With the right legal structure in place, you can stay focused on growing your business without unnecessary setbacks.

How City Pacific Lawyers Can Help

If you’re concerned about the legal risks in your business or want to strengthen your foundations before a dispute occurs, we can help.

Our Melbourne-based team works with business owners across all industries to reduce risk, resolve commercial disputes, and create practical legal frameworks that protect your interests.

To speak with a commercial dispute lawyer, contact City Pacific Lawyers on (03) 9592 3356 or book a free consultation.