Six Key Contracts for Australian Retail Businesses

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Table of Contents

• Sales Terms & Conditions – Online Retail Store
• Loan Agreement 
• Lease Agreement 
• Utility Agreement
• Supplier Agreement 
• Employment Contracts
• Key Takeaways
• Frequently Asked Questions

When starting a retail business, there are several important matters that you may wish to consider. One of the most important of these is ensuring that you are doing your legal due diligence regarding contracts. Drafting the right contracts early on, which outline each party’s rights and responsibilities, will save you a lot of time, stress and money in the long run. In this article, we will outline and explain six key contracts for Australian retail businesses. However, it is important to note that this list is not exhaustive, and your retail store may have different contracts depending on your circumstances.

Sales Terms & Conditions – Online Retail Store

If you have an online retail store, the key document that will govern your relationship with your customers is a terms and conditions agreement. This agreement will outline various terms including:

• how customers can place orders;
• how payment is determined and charged;
• your delivery policy, your refund policy;
• what warranties you provide; and 
• how any disputes will be resolved. 

It is important that any customers making purchases on your website are aware of these terms and conditions and that you make them visible, easy to read and accept. 

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Loan Agreement 

In order to get your business up and running, you may require a loan from a lender, such as a bank. If you do so, you will need to enter into a loan agreement. This special agreement governs the relationship between the lender and the borrower. This agreement will include all the details of the loan, including:

• the interest rate; 
• the length of the loan;
• the collateral requirements of the loan;
• and the consequences of default. 

You should ensure you understand the implications of each term. This is because failure to abide by the terms often means your lender can repossess your business’ property. 

Lease Agreement 

If you are running a brick and mortar business, you will most likely need to enter into a lease agreement. This is a contract that governs the relationship with your landlord. Alternatively, you may require a lease agreement even if you run an online business but require inventory space.

The lease agreement will cover details such as:

• the length of the lease;
• the amount of rent due; 
• rights of either party to terminate the lease; and 
• letting fees. 

In addition to the lease agreement, there is also a body of law that supplements lease agreements. 

Utility Agreement

In order to run a business from a physical location, you will need utilities such as gas and electricity. A utility contract will be an agreement between your business and utility providers, which will outline the services to be provided, payment structure, and termination rights. 

Supplier Agreement 

As a retail business, a key aspect of your operations is the product that you will be retailing. Depending on if you are purchasing goods from a supplier or a manufacturer, you will enter into either a supply agreement or manufacturing agreement. In some cases, you may have both forms of agreement for different products.

A supply agreement will govern the relationship between you and the supplier. This contract will typically contain:

• details of the product;
• the price; 
• delivery obligations; 
• how product defects will be dealt with; and 
• restrictions on intellectual property licensing. 

Employment Contracts

So you have a store, electricity and gas, and even products that you are ready to sell. Another important consideration is employment arrangements. You must enter into well-drafted employment contracts between yourself and your employees. Whilst employees are protected by legislation, it is still important that you cover key rights and responsibilities in your contracts. These terms include:

• the nature of the employment (full-time or part-time);
• the salary and other benefits;
• working hour; 
• leave entitlements;
• notice periods; and
• termination rights. 

If you engage contractors rather than (or in addition to) employees, this must be reflected in the business’s contractual and operational arrangements. 

Key Takeaways

Running a successful retail business involves drafting, reviewing and signing many contracts. In order to ensure smooth running of your business, it is essential that you have well-drafted contracts that outline the rights and obligations of each party early on. This article reviewed six key contracts retail businesses commonly enter into. 

If you need help with your contracts, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions