It’s a frustrating situation many businesses and individuals face – engaging a service provider, paying for work upfront, and receiving a substandard outcome (or no outcome at all). Whether you’ve hired an IT company, an accountant, a marketing agency, or a tradesperson, poor service delivery can result in lost time, added costs, and legal headaches.
Whether it’s a breach of contract or a breach of consumer rights, there are legal steps you can take to recover your losses and hold service providers accountable. This article, by our contract lawyers, outlines how individuals and businesses can resolve service disputes efficiently and cost-effectively.
Key Takeaways
If you’ve paid for services not delivered properly, you may have legal rights under contract and consumer law.
Common legal grounds include breach of contract, negligence, and breach of Australian Consumer Law.
A well-documented letter of demand is often an effective first legal step.
If a letter of demand is unsuccessful, regulatory complaints or legal action may follow.
Keeping documentation and acting promptly improves your chance of recovery.
What Are Your Rights When Services Are Not Delivered?
Under both contract law and the Australian Consumer Law (ACL), customers have a right to receive services:
With due care and skill
That are fit for their intended purpose
Delivered within a reasonable time, where no deadline was agreed
When these standards aren’t met, it can be considered a breach of contract, a statutory breach, or in some cases, misleading conduct. If this has happened to you, you may be entitled to:
A full or partial refund
Compensation for losses caused by the failure
Steps to Take When You’ve Paid for Poor Service
When you’ve paid for services that fall short, these practical steps can help protect your rights and position you for a successful claim.
1. Collect and Organise All Documentation
Start by gathering:
Contracts, quotes, or proposals
Proof of payment (invoices, receipts, bank transfers)
Email or text correspondence
Screenshots, reports, or other evidence of poor work
Invoices for rectification services
A timeline of events
This will be critical for any claim or legal correspondence.
2. Communicate Your Concerns in Writing
Reach out to the provider via email or written message. Be factual, not emotional. State:
What went wrong
What was expected
What you want as a resolution (e.g. refund, fix, compensation)
A timeframe for response (typically 7-14 days)
This shows that you’re being reasonable and gives the provider a chance to correct the issue.
If you’re an author, for more information on dealing with contract breaches, see our article on what happens if a publisher breaches an agreement?
3. Determine Your Legal Grounds
Understanding your legal position will help guide your next steps. You may have a claim for:
Breach of contract: They failed to deliver what was promised
Negligence: The service was delivered carelessly or unprofessionally
Misrepresentation: You were misled about the provider’s ability or offering
Breach of Australian Consumer Law: The services weren’t provided with due care and skill or were not fit for purpose
Knowing which legal basis applies will shape the content of your demand or any future legal claim.
You can learn more about how the Australian Consumer Law applies to business transaction in our detailed guide.
4. Send a Formal Letter of Demand
A lawyer-drafted letter of demand is often the most effective next step. It should include:
A clear summary of the facts and history
The legal basis for your claim
A breakdown of your financial loss
A request for resolution (e.g. refund) by a specific deadline
A warning of legal action if no response is received
This letter shows you are serious and often prompts a faster resolution than informal communications.
5. If the Letter of Demand Is Unsuccessful
If the provider fails to respond or refuses to engage, you have several options:
File a complaint with a regulator or ombudsman: Many industries have free dispute resolution schemes.
Apply to a small claims tribunal: Such as NCAT (NSW), VCAT (VIC), or QCAT (QLD).
Start court proceedings: Particularly if the value of the dispute is significant.
Engage in mediation: Some providers will agree to meet with a neutral third party to resolve the issue.
Before escalating, seek legal advice on the best forum, likely outcomes, and costs.
6. Learn from the Experience
Protect yourself moving forward by:
Getting detailed written contracts
Avoiding large upfront payments without clear deliverables
Verifying providers through online reviews or referrals
Keeping communication in writing
Using secure and traceable payment methods
Real Life Example - A Service Dispute Resolved Without Court
We recently assisted a client who paid for professional services that were delivered late and full of errors, despite clear promises of quality and timeliness. The client incurred thousands in costs to fix the issues.
After our clients repeated complaints were ignored, we issued a formal letter of demand to the service provider. This prompted a partial refund and opened the door to resolution – without needing to go to court.
Frequently Asked Questions
What can I do if I paid for a service and it wasn’t delivered?
You can pursue a refund or compensation under contract law or the Australian Consumer Law, depending on the circumstances. The first step is usually raising the issue in writing, followed by a letter of demand if no resolution is reached.
Is a letter of demand enforceable?
Not directly – it’s not a court order. But a well-written legal letter often prompts a provider to resolve the issue to avoid escalation, legal fees, or reputational damage.
What if the provider is overseas?
If they operate or advertise in Australia, you may still have a claim. However, enforcement can be more complicated. We recommend seeking legal advice to explore your options.
Can I recover time spent fixing the issue?
Yes, especially if you’re a business and your time has commercial value. If you engaged third parties to rectify the provider’s mistakes, those costs are often claimable too.
What happens if I take legal action?
Depending on the amount in dispute, your matter may go through a tribunal (e.g. NCAT, QCAT) or the court system. These proceedings require good preparation and can involve legal fees, so it’s important to weigh up costs versus outcomes.
At Prosper Law, we offer fixed-fee assistance with assessing your claim, preparing legal letters and pursuing formal dispute resolution. If you’ve been left out of pocket after paying for services that weren’t delivered, contact us today for practical, commercial legal support.
