Commercial Contracts
The agreements that run a business — and how to read them so you know what you are actually signing.
What it is, and why it matters
A commercial contract is simply a set of promises the law will enforce — between a business and its customers, suppliers, contractors or partners. Most of a contract is routine. The risk sits in a handful of provisions.
Disputes rarely come from exotic clauses. They come from the same few provisions — who carries the risk, who can walk away, who owns what, who pays when — being one-sided, and signed unread. Reading a contract well means finding those provisions quickly and asking whether each one is fair for your side, or worth pushing back on.
The clauses worth checking first
If you only read six things in a commercial contract, read these.
- Risk allocation. Limitation of liability, indemnities and insurance decide who pays when something goes wrong — often the most valuable clauses in the document.
- Termination & exit. Can you get out, on what notice, and what happens to your data, deliverables and money on the way out?
- IP & deliverables. Who owns what is created, and do you have the licence you actually need to use it?
- Payment terms. Timing, GST treatment, interest on late payment, and any one-sided right to increase prices.
- Confidentiality. Ideally mutual, tied to a defined purpose, with the standard carve-outs.
- Australian Consumer Law. Consumer guarantees cannot be contracted out of — check whether the ACL applies to the supply.
Common documents
The agreements most small businesses meet, and what each is for.
Non-Disclosure Agreement
Protects confidential information shared while exploring a deal.
Services / MSA
A master agreement with statements of work for ongoing services.
Supply of Goods terms
Standard terms for selling goods, covering price, risk and title.
Contractor agreement
Engages an independent contractor — and manages the sham-contracting risk.
Website / app terms
Terms of use and a privacy policy for an online product or store.
Engagement letter
Sets scope, fees and terms when you hire a professional adviser.
Try it — read a contract the way a lawyer would
Review one of three sample agreements clause by clause, or paste in a clause of your own and see how it would be approached.
When to stop and get advice
This guide helps you understand a contract. It cannot tell you what to do about your contract. Treat these as signs to get a lawyer before you sign:
- The contract is high-value, long-term, or hard to get out of.
- You are asked for a personal guarantee or to put up security.
- There is an uncapped liability, a broad indemnity, or a restraint of trade.
- You are being pressured to sign quickly — or there is anything you do not understand.
Sources & further reading
The official sources behind this page. Laws change — always check the current version.
Last reviewed: July 2026. General information only — not legal advice.