Most Victorian businesses need a short list of written agreements: terms of trade, credit applications with director's guarantees, employment contracts, a shareholder agreement or partnership deed, a reviewed lease, supplier and subcontractor terms and, if you trade online, website terms and a privacy policy. In our disputes work, the documents most often missing are those between people who trusted each other. Here is the list, and where to start.
In this article
- 1. What should your terms of trade cover?
- 2. What should a credit application include?
- 3. What should every employee sign?
- 4. What agreements do co-owners need?
- 5. Why have a lease reviewed first?
- 6. Why do supplier and subcontractor agreements matter?
- 7. What does trading online add?
- Where do businesses get burned?
- How often should you review your business contracts?
- A worked example
- When should a business put its contracts in place?
- Common questions
1. What should your terms of trade cover?
Your terms and conditions govern every sale: when payment falls due, interest and recovery costs on late accounts, who owns goods until payment, a retention of title clause registered on the PPSR to survive a customer's insolvency, limits on your liability, warranty scope consistent with the Australian Consumer Law, and how disputes are handled. Two disciplines make terms enforceable: they must be accepted before the work, on the quote or credit application and not on the invoice that follows, and they must match how you actually trade. For most small businesses there is a third, fairness: under the Australian Consumer Law, an unfair term in a standard form contract is void where the customer is a consumer or either party is a small business, meaning one employing fewer than 100 people or with turnover under $10 million in its last income year. Since 9 November 2023, proposing or relying on such a term can itself attract a penalty, so clauses limiting liability or charging interest and recovery costs need drafting with that test in mind. Most payment disputes are won or lost here, and when a contract does go wrong, the Victorian Small Business Commission offers low cost dispute resolution, with guidance for small businesses on its website. See our companion guide to recovering unpaid debts.
2. What should a credit application include?
Extending credit to companies deserves paperwork of its own: a credit application capturing correct legal identity, which means an ACN and not a trading name, trade references, consent to credit checks, and a director's personal guarantee. A guarantee converts "the company owes you" into "someone with a house owes you", which changes negotiating physics entirely. If you are the one being asked to sign a guarantee, that is precisely why you should have it reviewed first.
3. What should every employee sign?
Every employee should hold a written contract: role, remuneration, hours, confidentiality, intellectual property, notice, and post-employment restraints where genuinely needed. Around the contracts sit the policies that manage risk day to day, covering workplace behaviour, leave and IT use, kept current with a workplace law landscape that has moved quickly in recent years on casual employment, flexible work and after-hours contact. Misclassifying employees as contractors remains one of the most expensive habits in small business; underpayment now carries criminal exposure for the worst cases. This is an area to set up properly and audit periodically, not to improvise.
4. What agreements do co-owners need?
If your company has more than one shareholder, the single most important document you can sign is a shareholder agreement: decisions, deadlock, dividends, exits, valuation. Partnerships need the equivalent partnership deed; family trusts trading businesses need deeds that are actually read. Co-ownership without a written constitution is the leading cause of the disputes that end businesses.
5. Why have a lease reviewed first?
Your lease is likely your largest fixed commitment, and if your use is retail, Victoria's Retail Leases Act gives you protections worth knowing before signature: disclosure statements, outgoings rules, the land tax ban, minimum terms. Never sign a lease, a renewal or an assignment unreviewed; our retail leasing guide sets out the checklist.
6. Why do supplier and subcontractor agreements matter?
Upstream contracts deserve the same attention as downstream ones: delivery obligations and remedies when a critical supplier fails, price-review mechanics, IP ownership in anything designed for you, insurance and safety obligations for subcontractors, and termination rights that let you exit a failing relationship cleanly. Businesses that only paper their sales side discover, in the first supply-chain crisis, that their exposure was always upstream.
7. What does trading online add?
Trading online adds its own set: website terms of use, a privacy policy that reflects what you truly collect and do with personal information, and for services, engagement terms clients accept before work begins. With privacy regulation tightening, the privacy policy is no longer decorative. If your revenue involves subscriptions, platforms or data, these documents are your product's legal chassis.
Where do businesses get burned?
A pattern from the disputes side of our practice: the documents most often missing are the ones between people who trusted each other. The two founders who never signed a shareholder agreement. The supplier relationship that ran eight years on an email from 2018. The star employee who left with the client list because the contract never mentioned one. Trust is not a substitute for terms: it is precisely what good terms protect, by making the hard scenarios discussable before they are live.
Sequence the fix pragmatically: start with the document guarding your revenue, your terms of trade, then the one guarding your equity, the shareholder agreement, then premises and people. Two or three documents into the list, most businesses have removed the majority of their legal risk for less than the cost of a single week of litigation.
Relying on trust alone with a co-owner, a key supplier or a senior employee, because nothing important was ever put in writing? Call (03) 9125 8355 or send an enquiry.
How often should you review your business contracts?
Contracts age. Prices change, the ACL evolves, a court reshapes restraint drafting, your business pivots. A light annual review, the same discipline as your insurance renewal, keeps the set current, and costs a fraction of the first dispute it prevents. We draft and refresh these documents at fixed fees quoted in writing first, and because we also run commercial disputes, everything we draft is written with one eye on how it holds up when tested. Terms of trade are from $1,815 including GST, and our fees page sets out what that covers. Start at our commercial law page.
A worked example
Consider a Melbourne trades business with one client worth a third of its revenue, engaged on the client's purchase orders, which quietly impose ninety-day payment terms and unlimited liability. New terms of trade, a credit application with a director's guarantee, and PPSR registration could be put in place within a fortnight. Suppose that eight months later the client's group restructures amid insolvency. With registered terms and a guarantee in place, that business would be far better placed than the unsecured suppliers waiting on a dividend. The paperwork would not feel urgent on any of the two hundred days before it mattered. It only ever matters on one day.
When should a business put its contracts in place?
Contracts are cheapest exactly when they feel least necessary. Paper the relationships that carry your revenue, your equity and your premises, review the set annually, and let every document be written by someone who has watched its clauses tested. Your future self, reading a signed guarantee instead of a broken promise, will consider it the best money the business spent.
Common questions
Which contract should a business put in place first?
Start with the document guarding your revenue, your terms of trade, then the one guarding your equity, the shareholder agreement, then premises and people. Two or three documents into the list, most businesses have removed the majority of their legal risk.
When do terms of trade need to be accepted?
They must be accepted before the work: on the quote or credit application, not on the invoice afterwards. They must also match how you actually trade.
Do I need a shareholder agreement if my company has more than one owner?
If your company has more than one shareholder, a shareholder agreement is the single most important document you can sign: decisions, deadlock, dividends, exits, valuation. Co-ownership without a written constitution is the leading cause of the disputes that end businesses.
Should I sign a director's personal guarantee?
A guarantee converts "the company owes you" into "someone with a house owes you", which changes negotiating physics entirely. If you are the one being asked to sign a guarantee, that is precisely why you should have it reviewed first.
Which of these documents is missing from your business? We draft them at fixed fees, quoted first. Call (03) 9125 8355 or send an enquiry.
Sources: Competition and Consumer Act 2010 (Cth), Schedule 2, the Australian Consumer Law, sections 23, 24 and 64; Personal Property Securities Act 2009 (Cth), sections 12, 21 and 267; Retail Leases Act 2003 (Vic), sections 17, 21, 39, 46 and 50; Fair Work Act 2009 (Cth), section 327A.
This guide reflects the law applying in Victoria as at September 2026. It is general information only, not legal advice, and does not take your circumstances into account.
