Commercial agreements that say what you mean
Supply, services, distribution, shareholders and partnership agreements. Drafted, reviewed and explained before you sign.
A contract decides who does what, who pays, and who carries the risk.
It also decides what happens when the deal ends or goes wrong.
We draft new agreements, review the other side's draft, and explain each term in plain words.
The agreements businesses rely on
- Supply agreements. What is supplied, quality, delivery, price changes, payment terms and who bears loss in transit.
- Services agreements. The scope of the work, timeframes, how fees are charged, who owns the work produced, and limits on liability.
- Distribution agreements. The territory, whether the rights are exclusive, minimum orders, use of the brand, and how the agreement ends.
- Shareholders agreements. How decisions are made, how shares are sold or valued, what happens if an owner leaves, is sick, injured or dies, and how disputes are resolved.
- Partnership agreements. Each partner's share of capital, profit and loss, their duties, and what happens when a partner leaves.
Terms to read before you sign
- Parties. The correct legal name and ABN or ACN of each party.
- Term and renewal. When the contract starts, how long it runs, and whether it renews on its own.
- Price and payment. How the price is set, when it can change, when payment is due, and interest on late payment.
- Liability and indemnities. What each party must cover if something goes wrong, and any cap on that liability.
- Termination. When each party may end the contract, the notice required, and what must be paid on exit.
- Variation. Whether one party can change the terms without the other's agreement.
- Intellectual property and confidentiality. Who owns what is created, and what must be kept private.
- Restraints. Limits on working with competitors or customers after the contract ends.
- Personal guarantees. Whether a director is asked to guarantee the company's debts personally.
- Disputes. The steps to follow before court, and which state's law applies.
Unfair contract terms in small business contracts
The Australian Consumer Law protects consumers and small businesses from unfair terms in standard form contracts.
A standard form contract is a contract prepared by one party, where the other party has little or no chance to negotiate.
From 9 November 2023, the law changed in three main ways.
- Proposing, using or relying on an unfair term in a standard form contract is now prohibited, and penalties apply.
- A small business is covered if it employs fewer than 100 people or has an annual turnover of less than $10 million.
- The old limit on the value of the contract was removed.
For a company, the maximum penalty is the greatest of $50 million, three times the benefit gained from the conduct, or 30% of adjusted turnover during the breach period where the benefit cannot be worked out.
For an individual, the maximum penalty is $2.5 million.
A term may be unfair if it causes a significant imbalance in the parties' rights, is not reasonably necessary to protect the legitimate interests of the party it benefits, and would cause harm to the other party if relied on.
Only a court can decide that a term is unfair. If it does, the term is void, and the rest of the contract continues where it can.
The rules apply to contracts made or renewed on or after 9 November 2023, and to terms varied or added on or after that date.
Where businesses get caught
- Using an old template without review.
Terms that may be unfair in a standard form contract with a small business can now attract penalties.
- Signing a personal guarantee without noticing it.
A director who signs a guarantee can be personally liable for the company's debts.
- Agreeing to automatic renewal.
Some contracts renew on their own unless notice is given within a fixed window.
- Leaving out an exit plan between owners.
Without a shareholders or partnership agreement, there may be no agreed way to value or buy out an owner who leaves.
- Accepting a one-sided right to change the terms.
A term that lets only one party vary the contract is an example the regulator gives of a term that may be unfair.
Common questions
Can you review a contract the other side has sent me?
Yes. We will explain each key term, the risks, and what to ask the other side to change.
Does the unfair contract terms law apply to my business?
It applies to standard form contracts with consumers, and with small businesses that have fewer than 100 employees or annual turnover under $10 million. Some terms, such as the upfront price, are not covered.
Do two business owners need a shareholders agreement?
The law does not require one. It records how decisions are made and what happens when an owner wants to leave, which reduces the risk of a dispute.
Can a restraint of trade clause be enforced in NSW?
Under the Restraints of Trade Act 1976 (NSW), a restraint is valid to the extent it is not against public policy. Whether a particular restraint is enforceable depends on its terms and the facts.
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