Hold Harmless Letters In Australia: What They Are And When To Use

If your business runs events, works on client sites, hires subcontractors, or brings customers onto your premises, you’ve probably wondered how to protect yourself if something goes wrong.

That’s usually where a “hold harmless letter” comes in - a short document where one party promises not to hold the other legally responsible for certain risks.

But are hold harmless letters enough in Australia? When do they work, what should they say, and what are the traps to avoid under the Australian Consumer Law?

In this guide, we’ll break it down in plain English so you can use the right document, in the right way, to reduce risk and keep your business moving.

What Is A Hold Harmless Letter In Australia?

A hold harmless letter is a simple written promise by one party (often a customer, visitor, participant, or contractor) that they won’t pursue claims against your business for certain losses arising from a specified activity.

It’s commonly used for one-off or short interactions (for example, a site visit, a workshop, a trial session, or a temporary arrangement). Think of it as a concise, informal version of an indemnity or waiver.

In Australian practice, you’ll usually see this concept captured in one of these forms:

• A standalone Waiver signed by participants or customers (e.g. for physical activities).
• A Deed of Waiver, Release & Indemnity for higher-risk or one-off events where you need stronger enforceability.
• An indemnity and risk allocation section inside your Terms of Trade or Service Agreement for ongoing client work.

Each option has a different level of formality and legal effect. The right choice depends on the risk profile, the relationship with the other party, and whether this is a one-off or an ongoing arrangement.

Is A Hold Harmless Letter Legally Binding In Australia?

It can be - but the details matter.

A hold harmless letter is essentially a contract. For any contract to be binding under Australian law, it needs the usual ingredients: an offer, acceptance, consideration (or execution as a deed), clear terms, and legal capacity.

Two key points drive enforceability in this context:

• Clarity and scope: The letter must clearly identify the activity, the risks being accepted, the parties, and the timeframe. Vague blanket statements are more likely to be challenged.
• Compliance with the Australian Consumer Law (ACL): You cannot exclude, restrict or modify certain consumer guarantees when supplying goods or services to consumers. Some risk exclusions are prohibited, especially for negligence causing injury or death, unless a specific, compliant recreational services waiver applies under state law. Unfair contract terms rules can also void clauses in standard form contracts with small businesses or consumers.

Because of this, many businesses prefer to include well-drafted risk allocation clauses (indemnities, releases and limitations) within broader agreements, and tailor them to the specific activity and audience. To see how these clauses typically operate, read our guide on limitation of liability clauses.

When Should A Small Business Use A Hold Harmless Letter?

You might use a hold harmless letter or similar waiver when:

• You’re running a one-off event, demo or trial where there’s a foreseeable physical risk.
• A contractor or supplier will be on your premises and you want them to accept certain operational risks.
• A customer is entering a restricted or higher-risk area (e.g. warehouse tour, construction site walk-through).
• You’re lending or hiring equipment and want the borrower to accept responsibility for loss or damage within reasonable limits.

For ongoing relationships (like recurring services or multi-month projects), it’s usually better to bake your risk allocation into a Service Agreement or Terms of Trade. These documents can properly address insurance, indemnities, caps on liability, exclusions, and the practical responsibilities on both sides.

Hold Harmless Letter, Waiver, Indemnity Or Release - What’s The Difference?

These terms are often used interchangeably, but they’re not identical. Here’s how they typically differ in practice:

• Hold Harmless Letter: A short-form promise not to hold your business responsible for defined risks. Best for low-to-moderate risk, one-off situations.
• Waiver: A document where a participant or customer agrees to waive certain claims and accepts risks associated with an activity. Often used in activities and events. See our Waiver offering.
• Release: A promise not to sue (and to release existing claims). Frequently used to settle disputes and close out liability. For existing disputes, businesses commonly use a Deed of Release and Settlement.
• Indemnity: A clause or document where one party agrees to reimburse the other for specified losses. Indemnities are powerful, but must be drafted carefully.
• Deed Of Waiver, Release & Indemnity: A more formal, stronger document (executed as a deed) combining these concepts - often used for higher-risk activities or where consideration is uncertain. Explore our Deed of Waiver, Release & Indemnity.

In many situations, you’ll combine concepts: a waiver that includes a release and a tailored indemnity, plus a clearly drafted limitation of liability clause to cap your exposure.

How To Draft A Hold Harmless Letter (Step-By-Step)

1) Identify The Activity And Parties

Start by clearly describing what the person will be doing, when and where, and who is involved. Include company details (legal name and ABN) and the other party’s full name and contact details.

2) Define The Risks And What’s Covered

List the foreseeable risks relevant to the activity (e.g. slips, equipment misuse, property damage). Avoid broad, catch-all statements that look unfair or ambiguous.

3) Set Out The Promise Not To Pursue Claims

State that the other party agrees not to hold your business liable for defined losses arising from the activity, subject to the ACL and any non-excludable rights. Make it clear this is not a blanket exclusion for everything.

4) Tailor Any Indemnity Or Release

If you include an indemnity or release, tailor it to the activity, define the losses covered, and carve out wilful misconduct and serious negligence. Consider adding a reasonable liability cap for commercial balance. Our guide to limitation of liability explains how caps and exclusions typically work together.

5) Add Practical Safety And Compliance Obligations

Include sensible obligations (e.g. follow instructions, use protective gear, report hazards). These help prevent incidents and show you’ve taken reasonable steps to manage risk.

6) Include Signatures And Authority

Ensure the letter is signed by someone with authority. If you’re dealing with a company, consider asking for a director’s signature or evidence of authority. For higher-risk scenarios, use a deed format instead (so it’s enforceable even if consideration is unclear).

7) Keep Records And Supporting Proof

Retain signed copies, timestamps, and any evidence of briefing or safety instruction. Good record-keeping can make a big difference if a dispute arises later.

What To Include In A Hold Harmless Letter (Checklist)

• Parties: Full legal names and contact details (include your ABN or ACN if applicable).
• Activity Scope: What the person will do, where, and when.
• Risk Acknowledgement: Clear acknowledgment of specific, foreseeable risks.
• Hold Harmless/Release: A tailored promise not to pursue claims for defined losses, with fair carve-outs.
• Indemnity (If Appropriate): A carefully drafted indemnity for third-party claims or property damage.
• Liability Management: Reasonable exclusions and a liability cap, consistent with the ACL and unfair contract terms regime. For standard form contracts, consider a UCT review and redraft.
• Safety Obligations: Follow instructions, wear PPE, use equipment properly, and report hazards.
• Insurance: State what insurance each party must have (e.g. public liability).
• State Law And Jurisdiction: Nominate governing law (e.g. NSW) and where disputes will be handled.
• Signature Block: Names, titles, dates, and signature lines (or deed execution blocks, if using a deed).

Common Mistakes And Legal Risks To Avoid

Relying On A One-Page Letter For Complex, Ongoing Work

A thin letter isn’t the right tool for multi-month projects or service relationships. Build your risk allocation into a proper Service Agreement or Terms of Trade, with tailored indemnities, insurance, IP ownership, payment terms, and dispute steps.

Trying To Exclude Non‑Excludable Consumer Guarantees

Under the ACL, certain consumer guarantees can’t be excluded for goods or services supplied to consumers and many small businesses. You also need to be careful about statements that could mislead or deceive - see our guide to section 18 of the ACL.

Unfair Contract Terms (UCT)

Standard form contracts with consumers and small businesses must not contain unfair terms. Overly broad releases or indemnities may be at risk. If you use templates repeatedly, consider a UCT review to keep your documents compliant.

Vague Or Overreaching Clauses

Catch-all wording can be ambiguous or look unfair. Be specific about the activity, risks and limits. Precision helps enforceability and improves trust with customers and partners.

No Integration With Your Other Documents

Your hold harmless approach should align with your broader contract suite and policies. For example, if you’re collecting participant details to manage bookings or safety, you’ll likely need a compliant Privacy Policy on your website or onboarding flow.

Alternatives And Supporting Documents Businesses Commonly Use

• Waiver: A purpose-built waiver signed by participants or customers for defined activities. See our Waiver solution.
• Deed Of Waiver, Release & Indemnity: For higher risk events, one-off engagements, or when you need stronger enforceability without reliance on consideration. Explore our Deed of Waiver, Release & Indemnity.
• Service Agreement or Terms Of Trade: The best place to manage risk for ongoing services, projects and B2B engagements. You can include liability caps, indemnities, insurance obligations, and safety responsibilities within your Service Agreement or Terms of Trade.
• Deed Of Release And Settlement: When resolving a dispute or refund scenario, a Deed of Release and Settlement helps finalise the matter and prevent further claims.
• Internal Risk Policy And Insurance: Combine your documents with appropriate insurance cover and practical safety processes. Contracts manage legal risk; good operations prevent incidents in the first place.

It’s also smart to pair risk allocation with proportionate limitation of liability and consequence management (e.g. force majeure, step-in rights, and clear termination provisions) within your primary commercial contracts.

Practical Tips For Using Hold Harmless Wording Effectively

• Match The Document To The Risk: Use a simple letter or waiver for low-risk, one-off scenarios; use a deed or full agreement for higher-risk or ongoing relationships.
• Keep It Specific: Name the activity, define foreseeable risks, and set reasonable boundaries (including carve-outs for serious negligence).
• Use Plain English: The other party should genuinely understand what they’re agreeing to. Clear wording supports enforceability.
• Be ACL-Aware: Don’t exclude non-excludable consumer guarantees and avoid unfair terms. If your document is “standard form” and used repeatedly, consider a UCT review and redraft.
• Integrate With Your Contract Suite: Align your hold harmless terms with your Service Agreement, Terms of Trade, website terms and Privacy Policy.
• Train Your Team: Make sure staff know when to use the letter, what to say when presenting it, and when to escalate for legal advice.

Key Takeaways

• A “hold harmless letter” is a short promise not to pursue claims for defined risks - useful for one-off, low-to-moderate risk activities.
• For ongoing or higher-risk work, use a tailored waiver, deed, or build robust risk allocation into your core contracts like a Service Agreement or Terms of Trade.
• Enforceability depends on clear, fair wording and compliance with the Australian Consumer Law and unfair contract terms regime.
• Be specific about the activity and risks, use reasonable liability limits, and keep your documents aligned across your business.
• For disputes or refunds, close out risk with a Deed of Release and Settlement; for higher-risk events, consider a Deed of Waiver, Release & Indemnity.
• Getting the drafting right up front can significantly reduce disputes and protect your business over the long term.

If you’d like a consultation on putting the right hold harmless, waiver or risk clauses in place for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.