In short
A marketplace or vendor onboarding agreement sets the terms on which third-party sellers list and sell through a platform, covering commission and payment flow, listing and content standards, and — critically — which party the customer's consumer guarantee rights run against and how liability and indemnities are allocated between the platform and the vendor when a sale goes wrong.
Working out who's actually liable to the end customer
The threshold issue for any marketplace is whether the platform is acting as an agent facilitating a sale between the customer and the vendor, or as the actual supplier of the goods itself. This isn't just a drafting preference — the Australian Consumer Law's consumer guarantees attach to whoever supplied the goods or services, and a platform that structures itself as a genuine facilitator still faces its own separate obligations under the Australian Consumer Law's rules for 'regulated platform operators' where they apply, plus reputational exposure regardless of the strict legal position, because customers generally see the platform as the point of accountability. We draft the vendor agreement and the platform's own customer-facing terms together so both consistently reflect the actual transaction structure, rather than each pointing liability at the other in a way that leaves gaps.
Vendor indemnities and their real limits
A vendor agreement should include an indemnity from the vendor to the platform for losses arising from the vendor's defective goods, misleading listings, IP infringement in listing content, or breach of the platform's policies. But an indemnity is only as good as the vendor's capacity to pay it, so for higher-risk categories we also address requirements like vendor insurance, security deposits or a reserve held back from vendor payouts, and a right for the platform to suspend or delist a vendor immediately on receipt of a serious complaint or regulatory notice, rather than only after a lengthy dispute process plays out.
Commission, payment flow and chargeback allocation
We document exactly how funds flow — whether the platform collects payment as the vendor's payment agent and remits net of commission, or whether the vendor is paid directly with commission invoiced separately — because this affects GST treatment, timing of when the vendor is deemed to have been paid, and who bears a chargeback in the first instance. Chargeback allocation clauses need to specify whether the platform can claw back a chargeback amount from future vendor payouts or held reserves, and the process the vendor must follow to dispute a chargeback allocation it disagrees with.
Listing standards and content licensing
The agreement needs to set out content standards for listings (accuracy, prohibited items, IP compliance) and a licence from the vendor to the platform to use listing content, images and vendor branding for the purposes of operating the marketplace and for the platform's own marketing — a licence scope vendors often overlook agreeing to more broadly than they intended, particularly around whether the platform can use vendor content after the vendor exits the marketplace.
Suspension, termination and data on exit
We build in clear grounds for immediate suspension (safety issues, repeated consumer complaints, IP infringement claims, non-payment of fees) separate from ordinary termination on notice, and address what happens to the vendor's account data, outstanding customer orders, and any held reserve on exit — leaving these undefined is a common cause of disputes when a vendor relationship ends acrimoniously, particularly around release of held funds.
What the fixed fee covers
- Assessment of the platform's agency versus supplier structure and its ACL implications
- Drafting of the vendor onboarding agreement including indemnities and insurance requirements
- Commission, payment flow and chargeback allocation clauses
- Listing content standards and content licence terms
- Suspension, termination and exit provisions covering held funds and data
Mistakes we see
- Leaving the agency versus supplier structure ambiguous across the vendor agreement and customer-facing terms
- Relying on a vendor indemnity with no insurance or reserve to back it up
- Failing to specify who bears a chargeback and how it's recovered from future payouts
- Taking an unlimited content licence from vendors without addressing what happens on exit
- No immediate suspension right for serious safety or IP complaints, only a slow standard termination process
Who this is for
- Marketplace platforms onboarding third-party sellers
- Platforms adding a marketplace model to an existing e-commerce business
- Vendors reviewing onboarding terms before joining a marketplace
- Platforms responding to a regulator inquiry or vendor dispute
Frequently asked questions
- Is the marketplace or the vendor liable if a product turns out to be defective?
- It depends on the actual transaction structure — if the platform is a genuine facilitator and the vendor is the supplier, consumer guarantee liability generally sits with the vendor, but the platform can still face separate exposure if its own conduct (representations, involvement in fulfilment) blurs that line, which is why the agreement needs to reflect what actually happens operationally.
- Can a marketplace hold back a reserve from vendor payments?
- Yes, provided the onboarding agreement clearly discloses the reserve mechanism, the circumstances in which it's drawn on, and the process for its release, since an undisclosed or ambiguous reserve clause is a common source of vendor complaints.
- Who is responsible for a chargeback on a marketplace sale?
- This should be set out expressly in the agreement — typically the vendor bears the cost of a chargeback relating to their product, recoverable by the platform from future payouts or a held reserve, but the mechanism needs to be clearly documented to be enforceable.
- Can the platform use a vendor's product images and branding after they leave the marketplace?
- Only to the extent the content licence in the onboarding agreement allows it — a well-drafted licence will limit ongoing use of a vendor's content and branding once the vendor has exited, rather than granting the platform a perpetual right by default.
- Can a marketplace suspend a vendor without notice?
- Yes, if the agreement includes a specific immediate suspension right for defined serious issues like safety complaints or IP infringement claims, separate from the standard notice-based termination process — this distinction needs to be drafted deliberately rather than assumed.
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