Thinking about launching your own business, entering a crucial partnership, or making sure your commercial arrangements are watertight? There’s no escaping the paperwork – whether it’s a contract document, contract form, or a different form of agreement entirely. For many Australian business owners, these legal documents can feel overwhelming, with so many types, templates, and expectations to manage.

But understanding the various forms of agreement is far more than just ticking a compliance box. The right agreements help protect your interests, clarify responsibilities, and lay the groundwork for future growth – or, if something goes wrong, can help you resolve disputes quickly and fairly.

In this essential guide, we’ll break down what a “form of agreement” actually is, explore your drafting options (including whether to use a contract draft or contract paper, or opt for a tailored contract), and point out the Australian legal requirements you need to meet for your business. Plus, we’ll show you how to avoid common pitfalls and set your business up for success from day one.

If you’re wondering which contract forms your business needs – and how to get them right – read on for a practical overview, and discover how Sprintlaw can help set you up for the long run.

What Is a ‘Form of Agreement’ in Australia?

A “form of agreement” is any legal document that records an understanding between two or more parties. In simple terms: it’s proof of what all sides have agreed to do, when, and how – plus any consequences if things don’t go to plan.

In Australia, you’ll hear a lot of related terms – contract document, contract draft, contract form, even contract paper. Broadly, they all refer to written agreements that set out the rights and obligations of parties engaging in a business relationship, transaction, or partnership. While technically a contract can be verbal, the overwhelming advice for Australian businesses is to ensure that your agreements are in writing. This makes your obligations crystal clear and helps avoid confusion (and costly disputes) if misunderstandings arise.

A well-structured contract will address things like payment terms, timeframes, responsibilities, confidentiality, dispute resolution, liability, and more. But every situation – whether you’re employing staff, buying goods, partnering up, or licensing intellectual property – will require a slightly different contract form.

Why Are Forms of Agreement Important?

It’s easy to assume you don’t need a formal “form of agreement” – especially when dealing with people you trust, or if your business is just starting out. However, disputes, regulatory action, and misunderstandings do occur, and sometimes even between the best of friends.

A clear, enforceable written contract offers major benefits:

  • Clarity: Everyone knows their exact responsibilities and what’s expected of them.
  • Risk Management: Reduces the risk of disputes by setting out clear remedies if things go wrong.
  • Legal Protection: Provides written proof that you can rely on in court or negotiation if disputes arise.
  • Professionalism: Helps demonstrate you take your obligations seriously (which builds business trust).
  • Compliance: Ensures you’re meeting Australian legal requirements – which can actually be mandatory for some trades and industries.

Whether you’re using a contract form template, drafting a bespoke contract document, or creating a contract draft to negotiate with, you’re not just doing paperwork – you’re protecting your business future.

Common Forms of Agreement in Australian Business

Most Australian businesses will use several different forms of agreement, covering contracts with clients, suppliers, employees, contractors, and more. Let’s explore some of the most common contract forms you’ll likely encounter:

  • Customer Contracts or Terms and Conditions: Outlines what customers can expect and their obligations. This can be a formal document or, for online businesses, included in your website terms and conditions.
  • Employment Agreements: Legally required when you employ staff. Should include pay, hours, leave entitlements, and other workplace obligations. See our comprehensive guide to employment contracts.
  • Contractor Agreements: When engaging independent contractors (not employees), formalise the relationship. This helps prevent legal risks, such as sham contracting. More on this in our contractor vs employee guide.
  • Supplier or Service Agreements: Sets out expectations with any third-party suppliers or service providers (think: manufacturing, logistics, web development).
  • Confidentiality or Non-Disclosure Agreements (NDAs): Protects sensitive business information when working with external parties.
  • Shareholders and Partnership Agreements: Crucial for businesses with more than one partner or investor – these deal with decision-making, ownership, and exit provisions. If you’re working with a co-founder, see our partnership agreement checklist.

The above is just a snapshot – there are many other specific contract forms for leases, franchising, intellectual property, and more.

Drafting, Templates, and Custom Agreements: How Do I Choose?

A big decision for every business is whether to use a contract form template, draft your own agreement, or have a lawyer create a bespoke document. Each option suits different needs and risk profiles.

Using Templates and Precedents

Templates (or contract form templates) can be handy for very simple, low-risk arrangements – think standard supply contracts, or a mutual non-disclosure agreement. There are plenty of free or paid templates available online.

But a word of caution: templates are only a starting point. They often use generic clauses that may not reflect Australian law, industry regulations, or the specific risks for your transaction. If you simply download a contract document and fill in the blanks, you risk leaving out critical protections or – even worse – inadvertently breaching Australian Consumer Law or other requirements. Make sure any template you use is intended for use in Australia and is reviewed by a lawyer before relying on it.

For more guidance, see our article on copying contract templates for the pros and cons.

Custom and Bespoke Contract Documents

For anything beyond basic “one-off” or low-value transactions, a bespoke (custom) form of agreement – drafted or reviewed by a legal expert – is strongly recommended. This is especially important if you’re dealing with:

  • High-value transactions or projects.
  • Ongoing relationships or long-term supply/service.
  • Unique or complex arrangements (e.g., technology licensing, joint ventures).
  • Any agreement where a dispute or liability could seriously impact your business.

A tailored contract draft provides the maximum legal protection. If you’d like your existing agreement reviewed – or need help drafting one – our contract review and contract drafting services can help ensure your paperwork is legally robust and fit for purpose.

Are There Legal Requirements for Forms of Agreement in Australia?

Absolutely – and overlooking this can be a costly mistake. Australia doesn’t always require private businesses to lodge or register every agreement, but there are very clear requirements about what makes a contract enforceable, and about minimum protections for certain types of agreements.

  • Basic Contract Law Requirements: For any form of agreement to be enforceable, it must include an offer, acceptance, intention to create legal relations, and “consideration” (usually payment or something else of value). Verbal agreements can be binding, but written contract forms make evidence far clearer.
  • Written Contracts Can Be Mandatory: Certain agreements must be in writing – these include employment contracts, real estate contracts, leases, and many others.
  • Consumer Laws: If you’re contracting with customers or clients, you must comply with the Australian Consumer Law (ACL). This governs things like product guarantees, refunds, and unfair contract terms.
  • Industry-Specific Rules: Some industries (like franchising, finance, or medicine) have strict regulatory guidelines on the format and content of contract documents. Always check your sector obligations.
  • Unfair Contract Terms: As of late 2023, changes to Australian law mean harsh, one-sided clauses in standard-form contracts (sometimes called “take it or leave it” contract forms) can be void – and penalties now apply for those who use or rely on them. See our guide to unfair contract terms.

What Legal Documents Will I Need To Start My Business?

Every business is unique and, depending on your type of business, you may need a mix of the following key legal documents:

  • Business Terms and Conditions: Helps define how you engage with customers and limits your legal exposure. For online businesses, website terms and conditions are a must.
  • Privacy Policy: Legally required if you collect any personal information (names, emails, addresses, etc.). See our guide to Privacy Policies.
  • Employment Agreement: If you are hiring staff, an employment agreement and workplace policies are vital.
  • Contractor Agreement: Needed whenever you’re working with freelancers or contractors, rather than employees.
  • Supplier or Service Agreement: If you’re buying goods or services from others, protect yourself against delays, defects, or invoice problems.
  • Shareholders’ Agreement or Partnership Agreement: Crucial for any business with more than one owner, founder, or investor.
  • Intellectual Property (IP) Agreements: To license or protect your brand, designs, or content.

Not every business will need every single one of these, but many will need several. Unsure which ones are relevant for your new business? It’s wise to start with a legal health check.

What About Changing or Amending an Agreement?

It’s common for businesses to start with a contract draft and negotiate changes before signing. Make sure any amendments are recorded in writing – ideally as an update to the contract document itself, or via a formal “deed of variation” or amendment letter.

Never rely on email trails or handshake deals to alter a written contract, even if it feels easier in the moment. Clear, signed amendments protect all parties and make it much easier to enforce your rights if disagreements arise later.

If existing contracts are out of date or you’re unsure how to properly update a contract form, our contract redrafting services can help you keep everything in order as your business evolves.

Digital Agreements and E-Signatures: Are They Legal?

Yes – Australia’s Electronic Transactions Act recognises electronic signatures and digital contract forms as legal and enforceable for most business transactions. This means you don’t need a printed contract paper (unless your industry requires it). Digital solutions speed up business and record-keeping, provided you use secure and reliable systems for signing and storing documents.

Just ensure that electronic execution is allowed for your particular contract (some property transactions, for example, still require pen-and-paper). For more, see Sprintlaw’s guide on digital signatures.

FAQs About Forms of Agreement in Australian Business

Do All Agreements Need To Be In Writing?

Not all agreements must be written, but having a contract document makes things much easier to evidence and enforce – especially if a dispute ever arises. Some contracts (such as employment contracts and leases) are required by law to be in writing.

Can I Use Overseas Contract Templates in Australia?

You can, but you shouldn’t. Overseas templates often don’t comply with Australian law or are missing mandatory provisions under the Australian Consumer Law. Always tailor your contract forms to local legal requirements.

What Happens If I Don’t Use a Contract?

You risk greater misunderstandings, lack the power to enforce your rights, and may breach certain laws. Without a form of agreement, it’s your word versus theirs if disputes arise – which can be costly and stressful. It’s always safest to “get it in writing”.

Where Can I Get Australian Contract Forms or Help?

Sprintlaw can help you with templates, tailored contracts, and legal support – whether you know the documents you need or want a legal health check. Speak with our lawyers to make sure your contracts are solid and suit your business goals.

Key Takeaways

  • Forms of agreement are essential to running a legally compliant and trustworthy business in Australia. They lay out responsibilities and protect both sides in a deal.
  • Many different types of contract documents exist – customer agreements, employment contracts, contractor and supplier agreements, NDAs, and more – with the right choice depending on your business model and level of risk.
  • Australian law sets out clear requirements for what makes a contract enforceable, and some industries require written contracts by law – make sure your contract forms comply with all relevant rules.
  • Templates can be a starting point, but bespoke, lawyer-drafted contracts are usually essential for anything other than simple, low-risk transactions.
  • Digital contract forms and e-signatures are usually valid in Australia, except for some specific legal transactions – get advice if unsure.
  • Avoiding written agreements, or relying on DIY or overseas templates without review, can expose your business to major risks – invest in quality documentation now to save time, money, and stress later.
  • Sprintlaw’s legal team can help you review, draft, and negotiate the right forms of agreement for your business, no matter your industry or stage.

If you would like a consultation on finding, reviewing, or drafting the right forms of agreement for your Australian business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

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