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Types Of Contracts Used By Australian Businesses

This guide outlines the most common types of contracts used in Australian commercial settings, and how they support business operations, relationships, and risk management.

Written by: Mark Lazarus, Commercial Lawyer, Director of Lazarus Legal
Published: 19 December 2025
Last updated: 05 February 2026

Table Of Contents

  1. What Is A Contract?
  2. Company And Ownership Agreements
  3. Employment And Workforce Agreements
  4. Intellectual Property And Confidentiality Agreements
  5. Commercial Trading And Operations Agreements
  6. Property And Premises Agreements
  7. Technology And Digital Agreements
  8. Finance And Security Agreements
  9. When Businesses Should Seek Legal Advice

Legal Disclaimer: The information on this page is general in nature and is not intended to constitute legal advice. It does not take into account your personal circumstances. Laws and legal processes can change, and their application varies between cases. You should seek independent legal advice before acting on any information on this page.

What Is A Contract?

A contract is a legally binding agreement between two or more parties that creates enforceable rights and obligations. Under Australian contract law, a valid contract requires four essential elements: offer and acceptance, consideration, intention to create legal relations, and certainty of terms.

In commercial settings, contracts serve several critical functions. They document what each party has agreed to provide, set clear performance standards and timelines, allocate risk between the parties, and establish dispute resolution procedures. Contracts also provide evidence of the agreement if enforcement becomes necessary through negotiation, mediation, or court proceedings.

The types of contracts businesses use depend on the relationship being formed and the risks being managed.

Learn About Australian Contract Law

Company And Ownership Agreements

Several types of contracts govern ownership structures and investment arrangements in Australian companies, defining the rights, obligations, and protections of shareholders, investors, and other stakeholders. These agreements are critical for managing disputes, protecting minority interests, and structuring exits.

Shareholders Agreement

A shareholders agreement governs the relationship between shareholders in a company. It typically covers matters including share transfers, decision-making procedures, dividend policies, dispute resolution, and exit mechanisms. Shareholders agreements provide protections and obligations that go beyond the company’s constitution and are enforceable between the parties who sign them.

Share Sale Agreement

A share sale agreement documents the sale and purchase of shares in a company. It sets out the purchase price, payment terms, warranties and representations about the company, conditions precedent to completion, and post-completion obligations. Share sale agreements are used when a business is being acquired through the purchase of its shares rather than its assets.

Deed of Accession

A deed of accession allows a new party to join an existing agreement, typically a shareholders agreement or joint venture agreement. When a new investor or shareholder is brought into a company, a deed of accession binds them to the terms of the existing agreement without requiring all original parties to sign a new document.

Convertible Note

A convertible note is a short-term debt instrument used by startups and early-stage companies to raise capital. The note converts into equity, typically preferred shares, at a future financing round or upon the occurrence of a specified trigger event. Convertible notes are popular in startup funding because they allow companies to raise capital quickly without determining a valuation at an early stage.

SAFE Agreement

A Simple Agreement for Future Equity (SAFE) is an investment instrument used by startups to raise capital without debt or fixed repayment terms. Unlike convertible notes, SAFEs do not accrue interest or have maturity dates. They convert into equity upon the occurrence of specified events such as a priced funding round or sale of the company. SAFEs have become widely used in Australia following their introduction in Silicon Valley.

Joint Venture Agreement

A joint venture agreement governs a business arrangement where two or more parties collaborate on a specific project or venture while remaining independent entities. The agreement sets out each party’s contributions, profit-sharing arrangements, management and decision-making structures, and dispute resolution mechanisms. Joint ventures are common in property development, infrastructure projects, and international business expansion.

Employment and Workforce Agreements

Businesses use different types of contracts to engage individuals and perform work through various contractual arrangements. The type of agreement used determines the legal relationship between the business and the worker, including obligations under employment law, tax treatment, and liability for workplace issues.

Employment Agreement

An employment agreement (also called an employment contract) governs the relationship between an employer and an employee. It sets out the employee’s role, remuneration, working hours, leave entitlements, notice periods, and termination provisions. Employment agreements must comply with the Fair Work Act 2009 (Cth) and applicable Modern Awards or enterprise agreements. A properly drafted employment agreement protects businesses by clarifying expectations, including post-employment restraints, confidentiality obligations, and intellectual property ownership.

Independent Contractor Agreement

An independent contractor agreement engages a person or entity to perform services as a contractor rather than an employee. Contractors typically have greater autonomy over how they perform work, provide their own tools and equipment, and are responsible for their own tax obligations. Businesses use contractor agreements to engage specialists, manage project-based work, and avoid employment-related obligations. However, the legal relationship is determined by the reality of the working arrangement, not simply by labelling someone a contractor.

Consultancy Agreement

A consultancy agreement is a type of contractor agreement used when engaging individuals or firms to provide professional advice or specialised services. Consultants are typically engaged for specific projects, strategic advice, or interim management roles. Consultancy agreements set out the scope of services, deliverables, fees, confidentiality provisions, and intellectual property ownership.

Secondment Agreement

A secondment agreement temporarily transfers an employee from one business to another, typically within a corporate group or between business partners. The agreement clarifies which entity remains the legal employer, who is responsible for supervision and workplace obligations, and how the arrangement will be managed and terminated. Secondments are used to fill skill gaps, support related businesses, and provide development opportunities for employees.

Deed of Release

A deed of release is used to settle employment disputes or terminate employment relationships on agreed terms. The deed typically includes a mutual release of claims, confidentiality obligations, payment of settlement amounts, and agreed terms regarding references and announcements. Deeds of release are commonly used to manage unfair dismissal risks, settle workplace disputes, and formalise negotiated exit arrangements.

Intellectual Property and Confidentiality Agreements

Intellectual property (IP) and confidential information are critical commercial assets for Australian businesses. Contracts are used to protect these assets, clarify ownership, and manage the risk of unauthorised disclosure or use. The types of contracts used to protect IP vary depending on whether consideration is required.

It is important to distinguish between agreements and deeds in this context. An agreement requires consideration to be enforceable, meaning each party must provide something of value. A deed does not require consideration and is enforceable based on its form and execution. Deeds are often used for IP assignments and confidentiality obligations to avoid disputes about whether adequate consideration was provided.

Intellectual Property Assignment Deed

An intellectual property assignment deed transfers ownership of IP from one party to another. Businesses use IP assignment deeds to acquire ownership of IP created by employees, contractors, or other parties. The deed must clearly identify the IP being transferred, confirm the assignment is absolute and irrevocable, and address moral rights where applicable. IP assignment deeds are critical in employment and contractor arrangements to ensure the business owns work product created during the engagement.

Non-Disclosure Agreement

A non-disclosure agreement (NDA) protects confidential information shared between parties during business discussions, negotiations, or commercial relationships. NDAs are used before parties disclose sensitive information such as business plans, financial data, customer lists, technical specifications, or trade secrets. The agreement defines what information is confidential, restricts its use and disclosure, and sets out the consequences of breach.

Confidentiality Deed

A confidentiality deed serves the same purpose as an NDA but is executed as a deed rather than an agreement. Using a deed removes any argument about whether sufficient consideration was provided in exchange for the confidentiality obligations. Confidentiality deeds are commonly used in corporate transactions, due diligence processes, and situations involving highly sensitive information.

Commercial Trading and Operations Agreements

Common types of contracts in commercial trading include agreements for supplying goods, providing services, distributing products, and structuring ongoing commercial relationships. These agreements define the terms of trade, allocate risk, and establish procedures for performance and dispute resolution.

Services Agreement

A services agreement governs the provision of services by one business to another. It sets out the scope of services, service levels and performance standards, fees and payment terms, liability and indemnity provisions, and termination rights. Services agreements are used across all industries for consulting, professional services, maintenance, support, and outsourced functions.

Supply Agreement

A supply agreement governs the ongoing supply of goods from a supplier to a buyer. It typically includes pricing and payment terms, delivery and acceptance procedures, quality standards and warranties, risk allocation for defective goods, and termination provisions. Supply agreements are used by manufacturers, wholesalers, retailers, and any business that relies on consistent supply of goods.

Distribution Agreement

A distribution agreement appoints a distributor to sell a supplier’s products in a defined territory or market. The agreement sets out the distributor’s rights and obligations, including exclusivity, sales targets, marketing support, pricing, and termination rights. Distribution agreements are used by businesses expanding into new markets, launching new products, or outsourcing sales and fulfilment functions.

Manufacturing Agreement

A manufacturing agreement engages a manufacturer to produce goods according to specified designs or requirements. The agreement covers intellectual property ownership, quality standards, production volumes, delivery schedules, and liability for defects. Manufacturing agreements are used by businesses that design products but outsource production to specialist manufacturers.

Agency Agreement

An agency agreement appoints an agent to act on behalf of a principal in business dealings with third parties. The agent’s authority, commission structure, and obligations to the principal are set out in the agreement. Agency arrangements are common in sales, real estate, insurance, and international trade where businesses engage local representatives to act on their behalf.

Franchise Agreement

A franchise agreement allows a franchisee to operate a business using the franchisor’s brand, systems, and intellectual property. The agreement governs the franchise relationship including fees, operational standards, territory, training and support, and termination rights. Franchise agreements are subject to the Franchising Code of Conduct under the Competition and Consumer Act 2010 (Cth), which imposes mandatory disclosure and conduct requirements.

Partnership Agreement

A partnership agreement governs the relationship between partners in a partnership business structure. It sets out each partner’s contributions, profit-sharing arrangements, management and decision-making procedures, and procedures for admitting new partners or managing partner exits. While partnerships can be formed informally, a written partnership agreement is essential to avoid disputes and clarify obligations.

Property and Premises Agreements

Commercial businesses occupy premises under various contractual arrangements. The types of contracts used determines the occupier’s rights, the landlord’s obligations, and the procedures for managing the relationship and resolving disputes.

Commercial Lease

A commercial lease grants a tenant the right to occupy premises for business purposes in exchange for rent. The lease sets out the term, rent and rent review provisions, outgoings and maintenance obligations, permitted use of the premises, and termination rights. Commercial leases in New South Wales and other states are subject to retail and commercial tenancy legislation that imposes mandatory disclosure requirements and minimum standards.

Licence to Occupy

A licence to occupy grants permission to use premises without creating a leasehold interest. Licences are typically used for short-term arrangements, shared workspaces, or situations where exclusive possession is not required. Unlike a lease, a licence does not grant a proprietary interest in the property and can generally be terminated more easily.

Deed of Variation

A deed of variation (also called a deed of variation of lease) amends the terms of an existing lease or other property agreement. Rather than entering into a new agreement, the parties execute a deed that sets out the specific variations to the original document. Deeds of variation are used to extend lease terms, change rent provisions, or modify other lease terms without requiring a completely new document.

Technology and Digital Agreements

Technology-driven businesses use specific types of contracts to govern access to software, protect intellectual property, manage user relationships, and comply with privacy obligations.

Subscription Agreement

A subscription agreement governs a customer’s access to software, platforms, or services on a subscription basis. It sets out the subscription fees, service levels, data ownership, termination rights, and liability limitations. Subscription agreements are the primary commercial contract for software-as-a-service (SaaS) businesses and are increasingly used across industries as business models shift to recurring revenue.

End User Licence Agreement

An end user licence agreement (EULA) grants a user the right to use software or a digital product subject to specified terms and conditions. EULAs define the scope of the licence, restrict how the software can be used, disclaim warranties, and limit liability. They are used by software developers, app publishers, and any business distributing digital products.

Terms of Use

Terms of use (also called terms of service) govern the use of websites, apps, and online platforms. They set out user obligations, acceptable use policies, content ownership, dispute resolution procedures, and liability limitations. Terms of use are legally binding contracts formed when users access or use the platform, even without a signature.

Privacy Policy

A privacy policy is not a contract in the traditional sense, but a statement of how a business collects, uses, stores, and discloses personal information. Australian businesses must comply with the Privacy Act 1988 (Cth) and the Australian Privacy Principles, which require transparent privacy practices. While privacy policies inform users rather than create contractual obligations, they are enforceable by the Office of the Australian Information Commissioner and can be incorporated into other agreements.

Finance and Security Agreements

Businesses use various types of contracts to borrow funds, provide credit, and secure obligations. These agreements document the commercial terms of lending, establish security interests, and protect lenders against default.

Loan Agreement

A loan agreement documents the terms on which one party lends money to another. It sets out the loan amount, interest rate, repayment terms, security provisions, and events of default. Commercial loan agreements may include financial covenants, conditions precedent to drawdown, and lender rights to appoint receivers or administrators if default occurs.

Division 7A Loan Agreement

A Division 7A loan agreement is a specific type of loan agreement used to document loans from a private company to shareholders, directors, or their associates. Division 7A of the Income Tax Assessment Act 1936 (Cth) treats certain payments, loans, and forgiven debts as assessable dividends unless the loan is documented and repaid in accordance with minimum interest and term requirements. Businesses use Division 7A loan agreements to comply with these requirements and avoid adverse tax consequences.

Guarantee and Indemnity

A guarantee and indemnity is a contract where one party (the guarantor) agrees to be responsible for another party’s obligations if that party defaults. Guarantees are commonly used by lenders to secure personal guarantees from directors or shareholders of borrowing companies. An indemnity goes further than a guarantee by making the indemnifier primarily liable for loss, rather than secondarily liable only upon default.

Security Agreement under the PPSA

A security agreement creates a security interest in personal property to secure payment or performance of an obligation. Under the Personal Property Securities Act 2009 (Cth), security interests must be registered on the Personal Property Securities Register (PPSR) to be enforceable against third parties. Security agreements are used by lenders, suppliers providing goods on credit, and businesses that need to protect their interests in assets.

About Mark Lazarus – Director, Lazarus Legal

Admitted in both Australia and the UK, Mark brings more than two decades of global legal experience to Lazarus Legal. Having worked as a barrister, in private practice, and as in-house counsel for a major international consumer brand he combines courtroom-honed advocacy with commercial insight. Specialising in commercial law, intellectual property and dispute resolution, Mark advises startups, creative businesses, and established enterprises on transactions, trademarks, contract drafting, and litigation strategy. His cross-jurisdictional background and history as a former in-house legal director give clients confidence that their legal issues will be managed with both strategic foresight and commercial realism.