Standard contracts for Australian businesses, what they contain and what the law requires

Your business probably runs on templates. The same service agreement goes out to every client, the same employment contract to every new hire, and the same terms and conditions sit under every online order. That is normal, and it is exactly what a standard contract is in practice: one document, drafted once, reused across many deals. But in Australia a template stopped being a mere time-saver in November 2023. The unfair contract terms rules in the Australian Consumer Law (ACL) now make one-sided terms in standard form contracts unlawful, not just void, and proposing them can attract a penalty. The practical questions that follow are which of your templates count as standard form contracts, what they should contain, and which laws override their words.

What makes a contract "standard"?

A standard contract is a pre-prepared agreement that sets out the rights and obligations of each party and is used for repeated transactions. It might be a service agreement, an employment contract, a supplier agreement, or the terms and conditions customers click through online. Drafting it once and reusing it saves time, keeps your terms consistent, and lets staff work from one document instead of improvising. That is the business case for standard contracts, and it is a good one.

Australian law gives a sharper meaning to the closely related phrase "standard form contract", and the distinction matters. Under s 27 of the ACL, if one party alleges a contract is a standard form contract, it is presumed to be one unless the other side proves otherwise. In deciding the question, a court must consider whether one party had all or most of the bargaining power, whether the contract was prepared before any real discussion took place, whether the other party could only accept or reject it as presented, and whether they had an effective opportunity to negotiate its terms.

The practical translation is this: the more take-it-or-leave-it your template is, the more likely a court will treat it as a standard form contract. Many businesses negotiate some deals and not others, so the same document can be standard form in one transaction and genuinely negotiated in the next. That label matters because it switches on the unfair contract terms rules in the ACL, which are discussed below.

What should a standard contract contain?

A standard contract is only as good as its clauses, and each clause is a risk-allocation decision. A typical agreement for an Australian small business covers most of the following:

Parties: the correct legal names of everyone bound. If you trade through a company, the contract should name the company, not the director personally.
Scope of work or services: what will be supplied, where, when, and what is expressly excluded. Scope disputes are the most common source of contract arguments.
Payment terms: the amount, the timing, the method, interest on late payment, and what happens if the customer does not pay.
Duration and termination: when the contract starts and ends, whether it renews automatically, what notice either party must give, and the grounds for ending the agreement early.
Liability and indemnities: caps on liability, exclusions such as consequential loss, and indemnities for third party claims. This is where you decide how much risk you carry.
Intellectual property: who owns work created under the contract, such as branding, content or software, and whether ownership passes on full payment.
Confidentiality: what counts as confidential information and how each party must protect it, including after the contract ends.
Dispute resolution: the steps before court, such as negotiation and mediation, and which court has jurisdiction.
Boilerplate clauses: governing law, force majeure, entire agreement, variation and waiver.

Two drafting points are worth holding onto. First, a clause that looks aggressively protective of you, such as a wide indemnity or a right to change prices without notice, may be exactly the kind of term the ACL treats as unfair, so "stronger" is not always "better". Second, standard does not mean identical. Your contract should reflect what you actually sell, the risks of your industry, and the state or states you operate in.

Which Australian laws override what your contract says?

No matter what your template says, several layers of Australian law apply on top of it and override it where the two conflict. The ones that most often catch standard contracts are set out below.

Unfair contract terms

The ACL is Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the CCA). It protects consumers and small businesses against unfair terms in standard form contracts, and the protection is not limited to consumer deals. Under s 23 of the ACL, a term of a consumer contract or small business contract is void if it is unfair and the contract is a standard form contract. A contract is a small business contract if it is a supply contract and at least one party employs fewer than 100 people, or had a turnover of less than $10 million in its last income year. So the standard contract you use with other businesses can be caught too. Small businesses have had this protection since 2016, when the unfair contract terms rules were extended beyond consumer contracts.

A term is unfair, under s 24 of the ACL, if it would cause a significant imbalance in the parties' rights and obligations, it is not reasonably necessary to protect the legitimate interests of the party who benefits from it, and it would cause detriment to the other party if it were applied. A court must take into account how transparent the term is and the contract as a whole, and a term is presumed not to be reasonably necessary unless the advantaged party proves otherwise. A term that lets one party change the agreement unilaterally, or that imposes a penalty out of proportion to any genuine loss, is the kind of term that gets struck out.

The consequences changed with the reforms made by the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 (Cth). Penalties for proposing or relying on an unfair term were introduced in November 2022, and from 9 November 2023 the definition of a small business contract expanded to cover businesses with fewer than 100 employees or turnover under $10 million, so far more standard contracts are now caught. An unfair term remains void, and the contract continues to operate without it. But proposing an unfair term in a standard form contract, or applying or relying on one, is now itself a contravention of the ACL that can attract a significant pecuniary penalty under s 224. The ACCC and ASIC both published guidance urging businesses to review their standard form contracts before the change, and the ACCC has said it can investigate and take enforcement action. A template you have not reviewed since before November 2023 may now be carrying terms that are not merely unenforceable but penalised.

Consumer guarantees

The ACL also gives consumers guarantees that cannot be contracted out of. Under s 64 of the ACL, any term that purports to exclude, restrict or modify the consumer guarantees is void. A line in your terms and conditions saying "no refunds" is unenforceable where a consumer guarantee applies, no matter how clearly it is written.

Employment law

If your standard contracts cover employees, the Fair Work Act 2009 (Cth) sets the National Employment Standards, which apply regardless of what the contract says, and awards and enterprise agreements can add further terms. An employment contract cannot undercut those minimums. If you engage independent contractors instead, the contract should be structured so the relationship is genuinely one of contractor and client, because misclassifying an employee as a contractor carries its own risks.

Privacy

The Privacy Act 1988 (Cth) requires the entities it covers to comply with the Australian Privacy Principles. Under APP 1, a covered entity must have a clearly expressed and up to date privacy policy about how it manages personal information. Many small businesses are outside the Act: under s 6D, a business is a small business if its annual turnover for the previous financial year was $3 million or less, and small business operators are generally exempt. The exemptions do not cover everyone. There are exceptions, for example for health service providers and businesses that trade in personal information, so it is worth checking rather than assuming.

Industry codes

Some industries have mandatory codes made under the CCA that dictate what contracts must contain. Franchising is the best known. Franchise agreements are regulated by the Franchising Code of Conduct, and a new Code commenced on 1 April 2025 under the Competition and Consumer (Industry Codes — Franchising) Regulations 2024, replacing the 2014 version. Other sectors have their own codes, so if your industry is regulated, check whether a code applies to your contracts.

"Terms contract" in Victoria: instalment sales of land

In everyday business language, a "terms contract" can just mean a contract with written terms. In Victorian property law the phrase has a specific statutory meaning, and the two should not be confused.

Under s 29A of the Sale of Land Act 1962 (Vic), a terms contract is an executory contract for the sale of land under which the purchaser must make two or more payments after signing, apart from the deposit and the final payment, before becoming entitled to the transfer, or is entitled to possession of the land before the transfer happens. In plain terms it is an instalment or vendor finance sale: the buyer moves in and pays over time, and title passes later.

Because that structure carries real risk for buyers, the Act now restricts these contracts sharply. Under s 29EA of the Sale of Land Act it is an offence to knowingly sell residential land, other than agricultural land, under a terms contract where the sale price is below the prescribed amount of $750,000, set by reg 6 of the Sale of Land (Exemption) Regulations 2020 (Vic). The penalties run to 240 penalty units or two years' imprisonment for an individual and 1200 penalty units for a body corporate, and under s 29EB it is also an offence to arrange, broker or induce such a contract. Exceptions apply where an arbitrator consents or the contract falls within a prescribed class (s 29C). If your business sells land or uses payment plans, these rules matter. For every other small business, "terms contract" almost certainly just means your written terms and conditions.

Which contracts does your business actually need?

Not every business needs every document, but most will benefit from a core set. Work through the relationships your business depends on and match each one to an agreement:

Service agreement or customer contract: scope, fees, payment and liability for the work you do for clients.
Terms and conditions: for selling online or through an app, the rules for buyers, including delivery, returns and payment.
Privacy policy: required under APP 1 if the Privacy Act applies to you, explaining how you collect, use and store personal information.
Employment agreement: written terms for staff, consistent with the Fair Work Act and the applicable award.
Contractor agreement: for independent contractors, setting out deliverables and protecting your intellectual property and confidential information.
Supplier agreement: quality, delivery and payment terms with the businesses you buy from.
Non-disclosure agreement (NDA): protection when you share sensitive information with a prospective partner, investor or supplier.
Shareholders agreement: if you have co-owners or investors, covering ownership, profit distribution and dispute resolution.
Website terms of use: the rules for people using your website or platform, separate from the terms and conditions for buying.

Prioritise by risk. A business taking online payments and collecting customer data has different priorities from a trades business that mostly invoices on the spot, and the documents should reflect that.

How to build a standard contract that stays current

A standard contract is a working document, not a one-off task. A sensible sequence for building and maintaining one looks like this:

Identify the relationships that need written agreements: customers, suppliers, employees, contractors and co-owners.
List the risks in each relationship. What happens if a client does not pay, a delivery runs late, a contractor leaves with your client list, or a customer is injured by your product?
Draft or customise a contract for each relationship that deals with those risks and reflects your industry and the states you operate in. Avoid copying a template you do not fully understand.
Review your contracts whenever the law changes and whenever the business changes. The 2023 unfair contract terms reforms and the 2025 Franchising Code are recent reminders that templates go stale.
Follow the contract's own rules for change. Most contracts require variations to be in writing and signed by both parties, so keep records of amendments, renewals and terminations. Use the notice periods in the contract before ending a relationship early, or you may face a claim for damages.
Make sure the people who use the contract understand it, and keep signed copies somewhere they can be found.

The most common mistake is set and forget: drafting a contract once and never looking at it again. A template that was reasonable in 2019 can be a liability today, and one-sided terms written when the only risk was a voided clause are now potential penalty exposure.

When to get an Artificer Legal lawyer to check your standard contracts

This article can tell you what a standard contract is and what the law requires, but it cannot make the judgement calls for your specific documents. A lawyer is the right person to decide whether your contract is a standard form contract, whether a particular term would be considered unfair, whether the Privacy Act or an industry code applies to your business, and whether a Victorian instalment arrangement is a terms contract under the Sale of Land Act.

A lawyer can also draft the documents themselves: service agreements, terms and conditions, privacy policies, employment and contractor agreements, and the rest of the suite. If a counterparty challenges a term, or a regulator starts asking questions about your templates, a lawyer can advise on the strength of your position and how to respond. And for a business that has been running on an unreviewed template since before November 2023, a contract review that identifies and redrafts one-sided terms is the cheapest insurance available.

Your template is a compliance document now

The sharpest change for Australian businesses is this: an unfair term in a standard form contract used to cost you the term. Since November 2023 it can cost you a penalty, because proposing or relying on it is a contravention in its own right. The clauses that feel most protective of you, the unilateral variation right, the penalty for late payment out of proportion to any real loss, the blanket exclusion of all liability, are precisely the clauses the ACL targets. The most expensive mistake is not a missing clause in your template. It is a clause you included, that you never re-read, that a court would call unfair.

To summarise: standard contracts save time and align expectations, and most Australian businesses should have a core set of them covering customers, suppliers, staff and contractors. Each contract should deal with the usual clauses, from scope and payment to intellectual property and dispute resolution, tailored to your actual risks. On top of the words you write, the ACL's unfair contract terms rules, the consumer guarantees, the Fair Work Act, the Privacy Act and any industry codes impose limits you cannot contract out of. In Victoria, "terms contract" has a specific meaning for instalment sales of land that has nothing to do with your standard terms and conditions. Keep your templates under review, follow their own rules when you change or end them, and get a lawyer to check the judgement calls before a term is challenged.