Do I Need A Contract To Wet Hire Equipment?

Do you need a contract when you hire out equipment with your own operator? Yes, if your business is providing wet hire, a written agreement is one of the clearest ways to protect your equipment, your staff and your cash flow.

Wet hire can feel straightforward on the day. You send the excavator, crane, lighting rig, truck or other plant, and your operator does the job. But if the site isn't ready, the machine is damaged, someone gives unsafe directions, or the customer refuses to pay for standby time, things can get messy quickly.

The good news is that your wet hire agreement doesn't need to be complicated. It just needs to clearly spell out who is doing what, who is responsible for what, and what happens when plans change.

What Is A Wet Hire Agreement?

A wet hire agreement is a contract for hiring equipment together with an operator supplied by your business. It's different from dry hire, where the customer hires the equipment only and provides their own operator.

For example, dry hire might be a builder hiring a scissor lift for three days and having their own licensed worker operate it. Wet hire might be your business supplying the scissor lift and your trained operator to work on the builder's site.

That difference matters because wet hire usually involves more risk and more moving parts. You're not just handing over equipment. You're also sending a person to perform work at a site you may not control.

A good wet hire agreement should deal with:

• The equipment, including make, model, attachments and condition
• The operator, including their role, licences and limits on what they can be asked to do
• The site, including access, safety, inductions and who controls the work area
• Charges, including hourly rates, minimum hire periods, travel, overtime and standby time
• Damage and breakdowns, including who pays and when hire charges pause
• Insurance and liability, including what each side must hold and what claims are excluded or capped

You might hear these agreements called a plant hire agreement, wet hire contract, equipment hire with operator contract or equipment hire terms and conditions. The label matters less than the wording. The contract should match how your business actually works.

Do I Need A Written Wet Hire Agreement In Australia?

Yes, you should have a written wet hire agreement if you're hiring out equipment with staff in Australia. Verbal arrangements can be legally binding, but they're much harder to rely on when something goes wrong.

Without a written agreement, you may struggle to recover unpaid invoices, charge for delays, prove who was responsible for site safety, or recover the cost of damage to your equipment.

This is especially important in construction, events, logistics and trade work, where jobs often change on the day. A customer might say the site is ready, but your operator arrives and waits two hours for access. A builder might ask your operator to move materials outside the quoted scope. An event organiser might cancel because the weather turns.

Your agreement gives you a process for these situations. For example, it can say:

• hire time starts when the equipment arrives on site
• a minimum four hour charge applies, even if the job finishes early
• standby time is charged if the site isn't ready
• the customer must provide safe access and a suitable work area
• your operator can refuse unsafe instructions
• damage caused by the customer's site, materials or directions is charged to the customer

If you use standard terms across many jobs, keep the Australian Consumer Law in mind. The unfair contract terms regime can apply to standard form small business contracts, and unfair terms can attract serious penalties. Terms that are one sided, hidden or broader than necessary can cause problems, so it's worth having them tailored rather than copying a generic wet hire contract template.

What Should A Wet Hire Contract Template Include?

A wet hire contract template should cover the equipment, operator, site conditions, payment, safety, liability, damage, delays and insurance. A template can be a useful starting point, but a lawyer should tailor it before you use it with customers.

Here is a practical outline you can use to plan your agreement.

1. Parties: Write the legal names, ABNs or ACNs, trading names and contact details for your business and the customer.
2. Equipment Details: Describe the equipment, attachments, accessories, registration details and any limits on use.
3. Operator Details: State that your business supplies the operator and list required licences, qualifications or site inductions where relevant.
4. Scope Of Work: Set out what the operator is being hired to do and what is outside scope.
5. Hire Period: Include start time, finish time, minimum charges, travel time, overtime and standby time.
6. Rates And Payment: State the rates, invoicing cycle, due date, GST treatment and late payment consequences.
7. Customer Site Obligations: Cover access, traffic management, ground conditions, permits, spotters, exclusion zones and safe systems of work.
8. Operator Authority: Confirm that your operator can stop work if they believe the work is unsafe or outside the agreed scope.
9. Damage, Loss And Cleaning: Explain who pays for damage, theft, misuse, cleaning, recovery, refuelling and repairs.
10. Breakdowns And Delays: Set out what happens if equipment breaks down, the site isn't ready, weather intervenes or third parties cause delays.
11. Insurance: List the insurance each party must hold and when evidence must be provided.
12. Liability Limits: Include any caps or exclusions, while making sure they don't overreach under the Australian Consumer Law.
13. Cancellation: State cancellation notice, call out fees and what happens if cancellation occurs after mobilisation.
14. Compliance: Refer to work health and safety laws, high risk work licences, road rules, plant registration and site rules where relevant.
15. Disputes And Termination: Include a practical process for raising issues, suspending work and ending the agreement.

Your equipment hire terms and conditions can sit at the back of a quote, but you need a clear process for making sure the customer accepts them before the job starts.

Who Is Responsible For Safety, Operators And Site Access?

It depends on who controls each part of the work, but you can't simply contract out of work health and safety duties. In Australia, both you and your customer may have duties under state and territory work health and safety or occupational health and safety laws.

If your business supplies the operator, you'll usually be responsible for making sure that operator is competent, properly trained, and holds any required licence or ticket. For high risk work, this may include licences for things like cranes, forklifts, dogging, rigging, scaffolding or elevated work platforms, depending on the job and jurisdiction.

Your customer will often control the site. That means they may be responsible for site inductions, traffic management, underground services information, exclusion zones, ground conditions, permits and coordinating other trades.

Your agreement should divide these responsibilities clearly. For example:

• you provide equipment that's maintained and fit for the agreed purpose
• you provide an operator with the agreed qualifications
• the customer provides safe access to and from the work area
• the customer confirms the ground or structure can support the equipment
• the customer identifies overhead powerlines, underground services and other hazards
• both parties consult, cooperate and coordinate on safety matters

Say you run a crane truck business in Brisbane. A customer books your truck and operator to lift air conditioning units onto a roof. When your operator arrives, the access road is blocked and the customer asks them to set up on soft ground near a trench. Your contract should let your operator refuse that instruction, charge standby time while a safer set up is arranged, and leave the site if the risk can't be controlled.

That kind of clause isn't just about avoiding arguments. It supports your safety system and gives your operator confidence to stop unsafe work.

Who Pays If Equipment Is Damaged Or The Job Is Delayed?

Your contract should say who pays based on what caused the damage or delay. If you don't set this out clearly, the argument often becomes one person's version of events against another's.

Damage clauses should cover more than obvious accidents. Think about:

• damage caused by the customer's materials, site conditions or directions
• theft or vandalism while equipment is on site
• damage to tyres, tracks, glass, hydraulics, attachments or accessories
• cleaning costs for concrete, paint, mud, chemicals or event waste
• recovery costs if equipment becomes bogged or stuck
• loss of hire income while the equipment is being repaired

Delays need just as much attention. In wet hire, your operator's time is part of the service. If they're stuck waiting, you're often still paying wages, superannuation, fuel, travel time and overheads.

Worked Example: Standby Time And Damage

Mike runs a small plant hire business in Newcastle. He agrees to wet hire a 5 tonne excavator with an operator for 8 hours at $180 per hour plus GST, with a 4 hour minimum charge and standby time charged at the same hourly rate.

The operator arrives at 7am, but the site gate is locked until 9am. Later that day, the customer directs the operator to work in an area where buried scrap metal damages a hydraulic hose. The repair costs $640 plus GST and the machine is out for half a day.

If Mike's agreement is clear, he can invoice:

• $1,440 plus GST for the 8 hour hire period
• $360 plus GST for the 2 hours of standby time, if not already included in the 8 hours
• $640 plus GST for the repair caused by the customer's site condition
• any agreed recovery, call out or loss of hire amount if the contract allows it

If Mike only had a text message saying the customer wanted an excavator for the day, recovering those amounts would be much harder.

What Insurance And Compliance Documents Should You Ask For?

You should ask for the insurance and compliance documents that match the risk of the job. The right list will depend on the equipment, site and industry.

For wet hire, you might need to provide or request:

• Public liability insurance, covering injury or property damage claims
• Plant and equipment insurance, covering damage to your own equipment
• Workers compensation insurance, if you employ the operator
• Motor vehicle or heavy vehicle insurance, where road use is involved
• Professional or contractual liability cover, if your work involves advice, design or technical decisions
• Certificates of currency, so each party can prove current cover
• Safe work method statements, especially for high risk construction work
• Licences, tickets and competencies, such as high risk work licences or equipment specific training records
• Maintenance and inspection records, especially for plant used in higher risk environments

If your operator is your employee, you also need to manage your employer obligations under the Fair Work Act 2009, any applicable modern award, superannuation rules and workers compensation laws. If you engage subcontract operators, you should use a contractor agreement that lines up with your wet hire terms.

For longer term plant hire arrangements, ask whether the Personal Property Securities Register needs attention. Some long-term leases or bailments can create PPSA issues, particularly where equipment is hired for more than 2 years, is renewable so the total term may exceed 2 years, or is an indefinite-term arrangement where the customer keeps possession for more than 2 years. Many wet hire jobs are much shorter than this, but high value plant is worth checking.

You should also make sure your liability and indemnity clauses work with your insurance. A contract that promises more than your policy covers can leave your business exposed.

Key Takeaways

• Wet hire means you supply both the equipment and the operator, so your contract needs to cover more than ordinary dry hire terms.
• A written wet hire agreement helps you recover unpaid invoices, charge for standby time, manage cancellations and deal with damage.
• Site safety should be shared clearly between you and the customer, but WHS duties can't simply be contracted away.
• Your operator should have clear authority to refuse unsafe directions or work outside the agreed scope.
• Insurance, licences, SWMS, maintenance records and site access requirements should be checked before the job starts.
• A wet hire contract template is only a starting point. Your agreement should be tailored to your equipment, rates, operators and industries.

If you'd like help with your wet hire agreement, equipment hire terms and conditions, operator obligations and insurance clauses, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.