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When it comes to buying or selling anything of value in Australia – whether you’re transferring business assets, products, stock, or even a business itself – the sale agreement is one of the most important documents you’ll come across. Solidifying a sale with a legally sound agreement helps make sure everyone’s on the same page, minimises misunderstandings, and protects your business from avoidable disputes down the road.
But what exactly is a sale agreement? Do you really need a lawyer to draft one, or can a template do the trick? And what are the key legal requirements for sales contracts under Australian law? If you’re new to the process, it can feel a bit daunting – but don’t worry. With the right information, drafting or reviewing a sale agreement can be much more straightforward than you think.
In this guide, we’ll walk you through what a sale agreement is, why it’s so important, and how to ensure yours ticks all the legal boxes in Australia. We’ll also cover must-have terms, compliance requirements, template options, and where to get the right support if you need it. Let’s dive in so you can move forward with confidence, whether you’re selling goods, assets, or your whole business.
What Is a Sale Agreement?
A sale agreement – sometimes called a sale and purchase agreement or simply a sales agreement – is a legally binding contract setting out the terms of a sale. You’ll use a sale agreement when you want clarity about what is being sold, for how much, and under what conditions.
Sale agreements are relevant for a wide range of transactions, such as:
- Selling business assets or inventory
- Transferring ownership of a business
- Selling goods to customers (especially for bigger ticket products)
- Any sale involving substantial risk or value, where a handshake just won’t cut it
The sale agreement is invaluable because it provides legal certainty for both parties. If something goes wrong – for example, if payment is late or goods are faulty – the agreement will clarify the rights and remedies available.
While you can use a sale and purchase agreement template to get started, customising a contract to suit your specific needs (and ensuring compliance with Australian Consumer Law and other regulations) is strongly recommended. Many business owners opt for professionally-drafted asset sale agreements or business sale agreements for this very reason.
Why Do I Need a Sale Agreement for My Business?
It may be tempting to keep things informal – especially if you’re selling to a long-time customer or someone you trust. But the reality is, even the best working relationships can sour if expectations aren’t clearly laid out.
- Reduces risk of disputes: Written terms leave no room for confusion if something’s unclear later.
- Clarifies each party’s obligations: You know exactly what is being sold, for what price, when and how payment is made, and who is responsible for what if things don’t go to plan.
- Outlines remedies and dispute processes: If there’s a breach or the goods don’t meet expectations, you have a clear path for resolving the issue.
- Helps with compliance: A well-drafted sale agreement makes it easier to comply with relevant laws like the Australian Consumer Law (ACL) and other statutory obligations.
If you’re selling a business, assets, or high-value inventory, a sale and purchase agreement is not just “good sense” – it’s best practice.
What Should Be Included in an Australian Sale Agreement?
No two sales are exactly the same, but most sale agreements share some essential features. Here’s what you’ll usually find:
- Description of the goods, assets or business: Be specific – list serial numbers, describe condition, or itemise assets or business components.
- Purchase price and payment terms: Spell out how much is being paid, in what form (cash, direct deposit, shares), and whether there are staged payments or a deposit.
- Timing: When does ownership formally transfer? What’s the settlement or handover date?
- Warranties and representations: Any promises made about the state of goods, the existence of liabilities, or ownership rights.
- Title and risk: When does legal ownership change? Who bears the risk if something happens after signing but before handover?
- Conditions precedent: Any requirements that must be met before settlement – such as finance or regulatory approvals.
- Default or breach remedies: What happens if either side doesn’t fulfil their part of the deal?
- Dispute resolution: How will disagreements be handled (mediation, arbitration, court)?
- Governing law and jurisdiction: Usually the state or territory where the sale occurs.
If you’re relying on a sales agreement template, always ensure it can be tailored to your specific deal. Off-the-shelf documents rarely suit complex or high-value sales, and the risks of “template traps” can be high without proper review – especially for business sales or asset transfers.
For further detail on what to include, check out our guide to contract law essentials.
Do I Need Legal Advice to Draft a Sale Agreement?
For simple, repeat transactions (like selling low-value goods to consumers), a quality sale of goods terms and conditions may suffice. There are templates available online (just search for “sale and purchase agreement template Australia”), but it’s crucial to use one that suits local laws and your industry.
However, if the deal involves higher stakes – like selling business assets, transferring shares, or selling the business as a going concern – expert legal advice is highly recommended. A lawyer can:
- Customise the agreement to your unique risks and needs
- Make sure clauses match Australian legal standards
- Spot common template gaps (such as GST, duty, or finance handling)
- Ensure compliance with the Australian Consumer Law, Personal Property Securities Act, and other regulations
- Help manage due diligence, settlement, and post-sale issues
Remember, a small investment in legal help up front can prevent costly disputes or losses later on. If you’d like a template reviewed or need a custom agreement, Sprintlaw’s contract lawyers can help make it hassle-free.
Types of Sale Agreements in Australia
Sale agreements in Australia come in various forms, depending on what you’re buying or selling. Here are some of the more common types:
- Asset Sale Agreement: Used when selling business assets (equipment, stock, IP, contracts) instead of the entire business or company shares.
- Business Sale Agreement: Used for complete business transfers, covering all key terms like employees, leases, goodwill, debts, and more.
- Sale of Goods (Product) Agreement: For one-off or ongoing sales of goods between businesses – covers product specs, delivery, payment, and liability.
- Share Sale Agreement: For selling or transferring shares in a company; includes terms about warranties, completion, and settlement.
Regardless of type, having a tailored agreement is key. If you need to combine or customise elements from multiple template types, professional support is recommended to avoid pitfalls.
Key Legal Compliance Requirements for Sale Agreements
It’s not just up to the buyer and seller what goes in a sale agreement – Australian law sets some boundaries and requirements. These include:
Australian Consumer Law (ACL)
The ACL applies to most consumer contracts. It sets out mandatory consumer guarantees, rights to refunds or repairs, rules about misleading and deceptive conduct, and restrictions on unfair contract terms. Find out more about Australian Consumer Law for businesses.
Business and Tax Registration
- You’ll need an ABN (Australian Business Number) for most business sales or asset transfers.
- If selling a registered business, make sure the business name and assets are correctly transferred or deregistered as required.
- GST and duty tax: Your sale agreement should clearly address whether GST or stamp duty applies, and who is responsible for payment.
Personal Property Securities Register (PPSR)
If you’re buying business assets or goods, check (and disclose) whether they’re subject to any existing security interests or finance liens. Registering or releasing security interests on the PPSR is critical and should be addressed in the agreement.
Employment Law
If employees are transferring with the business sale, ensure their entitlements and contracts are handled in line with the Fair Work Act and modern award requirements.
Consumer Data and Privacy Law
If personal information is changing hands as part of the deal, you’ll need to comply with the Australian Privacy Principles and possibly update your Privacy Policy.
What Legal Documents Do I Need for a Business or Asset Sale?
If you’re selling part or all of your business, a sale agreement is only part of the documentation puzzle. Other key documents include:
- Asset Sale Agreement: Sets out the terms for the transfer of business assets.
- Business Sale Agreement: Details the comprehensive sale process, including employees, leases, contracts, and liabilities.
- Share Sale Agreement: Transfers company ownership, outlining warranties, dispute resolution and completion requirements.
- Deed of Assignment: Transfers specific contracts or rights from seller to buyer.
- Deed of Novation: Formally moves contract obligations and benefits from seller to buyer for ongoing agreements.
- Privacy Policy: Required if customer data is involved; must reflect changes in ownership.
- Employment Agreements or Staff Transfer Agreements: If staff are moving with the transaction.
- Non-Disclosure Agreements (NDAs): For due diligence or before disclosing confidential information to prospective buyers or advisors.
Depending on what’s being sold, you may also need lease transfer documents, intellectual property assignments, or updated terms of sale or service agreements for ongoing customer relationships.
Every transaction is unique – so speak to a legal expert to ensure you have the right mix of documents and don’t overlook your obligations.
Can I Use a Sale and Purchase Agreement Template in Australia?
If your transaction is very simple and low-risk, a sale and purchase agreement template can be a useful starting point. Templates can help you save time and make sure you don’t forget the basics.
Here’s when a template might be suitable:
- For straightforward, low-value goods sales (where you have a reliable agreement source)
- If you’re comfortable customising the template to reflect the specific details of your sale
- If you understand the relevant Australian laws (ACL, GST, PPSR, employment, etc.) that need to be covered
However, relying solely on a generic agreement – especially one from overseas sites or not reflecting Australian law – can leave you exposed. These templates often omit critical terms or fail to address things like local consumer law and tax. You run the risk of enforceability issues or inadvertently breaching a statutory requirement.
Our advice? Use templates as a guide, but always have a legal expert review or draft the final version before you sign off – especially for anything large-scale, involving staff or intellectual property, or for business sales.
Sale Agreement vs. Quotation: Is a Quote Legally Binding?
This is a common question, and an important one! A quotation or price estimate is generally not legally binding until both parties formally accept the offer, and clear terms are agreed. By contrast, a sale agreement is binding from the moment both parties sign (except as otherwise stated in the contract).
Never rely on an informal quote as evidence of contractual commitment – insist on a signed sale contract listing all relevant conditions and expectations.
Special Considerations: Buying or Selling a Business?
If you’re selling or buying a whole business rather than just goods or assets, additional diligence is required. Business sale agreements typically involve:
- Due diligence: Reviewing all debts, liabilities, contracts, IP, customer agreements, and employment matters before proceeds to sale.
- Employee transfers: Handling staff entitlements, redundancy pay, and Fair Work obligations.
- Intellectual property: Making sure trademarks, trade secrets and customer lists are correctly transferred.
- Lease transfers: Getting landlord consent for premises lease assignments or new agreements.
- Ongoing obligations: Restraints of trade, ongoing support or training from the seller, confidential information, and dispute resolution clauses.
Business sales are complex, and government agencies such as ASIC and the ATO can also be involved in the transfer process. For a full breakdown, see our guide to buying a business in Australia.
Key Takeaways
- A sale agreement is fundamental for any business, asset or product sale in Australia – don’t rely on verbal deals or informal emails alone.
- Your contract should be tailored to the transaction – ensure clear terms are set out on price, description, timing, risk, and remedies.
- Templates can help, but always ensure your sales agreement is compliant with Australian Consumer Law and local tax and employment requirements.
- Business asset or company sales call for extra diligence – think due diligence, employment obligations, contracts and intellectual property transfer.
- The right paperwork upfront minimises disputes and helps your business run smoothly – legal advice is a worthwhile investment for peace of mind.
If you would like a consultation on creating a sale agreement or reviewing a sale and purchase agreement template for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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