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Working With Contracts

This 49 page guide aims to assist small business managers in using contracts confidently and appropriately as a commercial tool. It has been specifically designed to familiarise small business managers with the following issues:

  • The essential ingredients of a contract
  • More on ‘offer’: the lead up to the contract
  • The different types of contracts
  • Contracts: what’s in them Standard form contracts
  • Specific small business relationships
  • Understanding the paperwork: contract documents
  • Contracts which hold information
  • Intellectual Property and contracts
  • Contracts completed using the internet
  • Electronic Funds Transfer
  • Resolving Disputes with contracts
  • Bringing a contract to an end Summary checklist
  • Additional sources of information for small business

Download the guide from the Australian Treasury or find out more here

Remember some basic rules

  • WorkingWithContractsGuideCover-790x1024Written contracts, where practical, are always the best form of contract to rely on.
  • Keep records of any promises made to clients by parties acting for the business – this could be done on a standard form showing dates and times.
  • You may find it useful to construct a model contract which can be filled in by the business at the time an agreement is made – this would ensure that you always have something in writing.
  • Make sure that:
    • anything signed by the parties making the agreement is the same as the spoken agreement made
    • any changes made to an agreement are explained and documented with the other partiesall parties have a copy of the contract, along with any appropriate changes
    • any difficulties or defects regarding a product or service have been brought to the attention of all parties.
  • Take special care:
    • when dealing with people who might be disadvantaged in terms of sight, hearing or language capabilities – so that they understand the contract, or at least have had legal advice
    • to be aware that contracts are regulated by unconscionable conduct provisions under the Australian Consumer Law
    • in expressing an opinion – particularly where it may be relied on as the basis of the agreement
    • when dealing with competitors, not to agree to fix prices, share markets, rig bids or restrict outputs not to directly or indirectly fix the minimum price at which a person may resell goods, or to supply goods or services on condition that other goods/services be acquired from a third party.
  • Read everything before you sign it.
  • Seek professional advice where you are unsure of the meaning or consequence of any contractual issue, especially if:
    • a substantial amount of money is involved
    • your possible liability under the contract is substantial
    • further similar situations are likely to arise
    • the other party is using professional advice.

Source: Department of Innovation, Industry, Science and Research