A Butcher Shop Dispute in Dee Why: What Went Wrong?
In busy Dee Why, NSW, a simple lease deal turned into a costly dispute.
Two entrepreneurs bought a butcher business. They planned to modernise it and boost profits. To handle the lease, they engaged a lawyer (not us).
A key part of the deal was a custom-built fridge. The landlord supplied a new refrigerator under the lease. However, the lease included a clause that excluded the landlord’s responsibility for the fridge’s performance or suitability.
That clause later became the centre of the dispute.
The Fridge Fiasco: Is the Lawyer to Blame?
Once the lease started, the fridge was installed.
It didn’t work properly.
It failed to keep the meat cold. Stock spoiled. Customers complained. The shop closed. The owners suffered significant financial loss.
They blamed their lawyer.
They argued that the lawyer should have clearly highlighted the clause that excluded the landlord’s responsibility. They claimed they might have reconsidered the lease if they had fully understood the risk.
The solicitor disagreed. He argued that he provided general advice within the agreed $860 fee. He said he met his duty of care.
Courtroom Verdict
The court ruled in favour of the lawyer.
It found no evidence that knowledge of the clause would have changed the owners’ decision to lease the premises. The court also held that the solicitor did not need to predict every possible equipment failure.
Importantly, the court decided that failing to highlight the exclusion clause did not breach the solicitor’s duty of care.
Even if the solicitor had raised the clause specifically, the court considered it unlikely the clients would have walked away.
The business owners were also ordered to pay the solicitor’s legal costs.
Avoiding Pitfalls: What You Need to Know Before Signing a Lease
This case underscores the importance of thoroughly understanding lease details and seeking expert advice when the “steaks are high” (see what we did there..).
Before you sign anything critical to your business’ ability to operate, like a lease (or a lease that includes a fridge..), it’s crucial to communicate clearly with your lawyer about what’s non-negotiable.
Don’t assume that you can renegotiate lease terms after the fact—if something is important to you or essential for your business operations, you can make it a condition of the contract. This means ensuring that any critical requirements, such as equipment specifications or landlord responsibilities, are explicitly included in the lease terms.
By doing this, you protect yourself (and your business) against unpleasant surprises and can rest assured that your lease reflects your needs and expectations. Additionally, having clear conditions in the lease that cover essential business aspects can be valuable when you’re looking to exit and transfer your business’s value to a new owner.
Our Promise: Tailored Support for Your Success
We work with businesses of all sizes, in all states of Australia – and it’s safe to say, we take extra care to review and address important details like this before you sign a lease (and before you exchange business sale contracts). Essential terms, such as equipment specifications and landlord obligations are clearly included in the lease, ensuring ALL aspects of a lease align perfectly with your requirements and expectations.
If you’re already on the lookout for a business to buy or premises to lease – Book a meeting with us now or call 1300 85 99 65
If we’ve piqued your interest, but you’re not yet in need – Check out The Deal Room Podcast for our best tips, tricks and first-hand experiences of buying and selling businesses.
