What to include in the express terms of your Australian business contract

You've just received a draft contract from a counterparty, or you're pulling together your own standard terms before a new engagement starts. Either way, the same question applies: does this document actually say what the deal is — and does it protect you if things go sideways?

Express terms are the parts of a contract that the parties deliberately agree to: the written (and sometimes spoken) rules that govern the relationship. They cover everything from what you're supplying and what it costs, to who owns the intellectual property and what happens when one side wants out. A contract can also carry terms implied by law — including certain consumer guarantees under the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)) that cannot be contracted out of — but implied terms are a thin safety net. Your express terms need to carry the weight.

What the scope clause actually does

The scope clause defines what you are delivering, what you are not delivering, and the assumptions on which your obligations rest. It is the clause that determines whether a request at month three is inside the deal or outside it — and therefore whether you are obliged to do it for free or entitled to charge.

Drafting minimums:

Describe deliverables specifically enough that both parties would agree on whether a given output meets the description.
List explicit exclusions — particularly work that is adjacent to but separate from the core engagement.
Set out the dependencies or assumptions on which your scope rests (for example, "Client will provide final copy by the agreed date").

The trap: scope that is drafted at the proposal stage and then left unchanged as the deal evolves. If the scope in your signed contract no longer matches what you are actually doing, you have created an unresolved tension that is likely to surface the moment a dispute arises.

The variant the other side will push: language like "and such other services as reasonably required" or "including but not limited to." These phrases effectively make the scope open-ended. Push back with a clear change-control mechanism instead.

How price and payment are structured

Price and payment terms are not the same clause, even though they often appear together. Pricing sets the amount; payment terms govern when and how that amount becomes due — and what happens if it is not paid on time.

For pricing, consider whether the rate is fixed or variable, how GST is handled (typically stated as exclusive of GST, with GST payable in addition), and whether the contract allows for indexation or price reviews over a longer term.

For payment, be precise:

Invoice cycle (for example, monthly in arrears, or milestone-linked).
Due date from invoice (a specific number of days, not "promptly").
Consequences for late payment — interest at a stated rate, the right to suspend services after written notice, or both.
Deposit or advance payment conditions.

The trap: contracts that specify a payment period (say, 30 days) but are silent on what happens if payment is late. Without an express consequence, a non-paying counterparty faces no immediate commercial pressure, and your only remedy is to chase a debt that has already aged.

Who bears the risk — liability, indemnity, and insurance

Three closely related clauses share the job of allocating risk: the limitation of liability clause, any indemnity obligations, and the insurance requirement.

Limitation of liability. A well-drafted cap sets a ceiling on your total exposure — commonly a multiple of fees paid under the contract — and excludes liability for certain categories of loss (such as indirect loss, lost profit, or loss of data) where that exclusion is lawful. Carve-outs matter: you cannot exclude liability for personal injury or death, and you cannot exclude the non-excludable consumer guarantees under the Australian Consumer Law where those guarantees apply.

Indemnities. An indemnity requires one party to compensate the other for specified losses, often third-party claims arising from that party's conduct or breach. They are a significant commitment — be careful about accepting broad indemnities on a counterparty's standard form — and they should always be reciprocal or clearly bounded.

Insurance. State the types and minimum levels required. If your contract calls for professional indemnity or public liability but leaves the amount blank, the clause gives false comfort.

The variant the other side will push: uncapped liability, or a liability cap set only at the value of the contract rather than fees actually paid. If you are a service provider, these positions deserve careful negotiation.

Intellectual property ownership and licensing

IP clauses answer two questions: who owns what was created under this contract, and who is permitted to use it going forward.

The default position under Australian law does not automatically assign IP created by a contractor to the client — ownership follows the creator unless the contract says otherwise. This means your contract needs to address:

Background IP: material each party brings to the engagement (your existing tools, templates, or methods). Each party typically retains ownership; neither should be required to assign background IP to the other.
Foreground IP: material created specifically for this engagement. The parties can agree on assignment to the client, retention by the provider with a licence granted on payment, or a co-ownership arrangement (which is complex and usually better avoided).
Licence terms: if you retain IP, what can the client do with it? Confirm the scope (purpose, territory, duration, exclusivity) and tie any licence grant to payment being received in full.

The trap: contracts that are simply silent on IP. In a dispute, both parties can claim ownership of the same deliverable, making enforcement and future use uncertain for everyone.

Confidentiality

Confidentiality clauses protect information that has commercial value precisely because it is not public — customer lists, pricing models, product roadmaps, technical specifications. A workable clause defines what counts as confidential, how the receiving party must treat it, what exceptions apply (information already public, already known to the recipient, or required to be disclosed by law), and how long the obligation survives termination of the contract.

The trap: confidentiality clauses that define "confidential information" so broadly they capture everything exchanged between the parties, including information that is obviously not sensitive. Courts will read a confidentiality obligation, but an overreaching definition can create practical difficulties and weaken the clause's credibility in a dispute.

Termination rights

Termination rights answer the question: how does either party get out of this arrangement, and at what cost?

There are two standard types:

Termination for cause: triggered by a serious breach, insolvency of the other party, or sometimes an extended force majeure event. Usually requires written notice and, for breach, a reasonable period to remedy.
Termination for convenience: allows either party (or just one party) to end the contract without needing a reason, on a stated notice period.

Drafting minimums:

Specify what counts as a "material breach" that triggers the termination-for-cause right, rather than leaving it open to interpretation.
Set a notice period for convenience termination that reflects the lead time genuinely needed to wind down or transition the arrangement.
Include an exit-consequences clause covering final invoicing, return of materials, survival of key obligations (confidentiality, IP, liability limits), and any wind-down services required.

The variant the other side will push: a unilateral convenience termination right favouring only them. If you are the service provider, insist on reciprocity — or at a minimum, payment for work completed and a reasonable notice period.

Governing law and jurisdiction

Specifying the governing state or territory law and the jurisdiction for disputes is a housekeeping clause that becomes critical when you actually need to use it. If your contract is silent, a counterparty in a different state can raise a genuine dispute about where proceedings should be brought, adding delay and cost before the underlying issue is even heard.

Choose the state where your business is based, or where most of the engagement is performed. For most Australian SMBs, this clause is two lines — but omitting it is a disproportionate risk.

Optional and situational clauses

Depending on your business model and counterparty, some additional clauses are worth including:

Force majeure. Sets out what happens if an event outside either party's control (natural disaster, government action, supply chain disruption) prevents or delays performance — including which party bears the cost of delay and when either side can terminate if the disruption is extended.
Retention of title. For contracts involving goods, this clause keeps legal ownership with you until the purchase price is paid in full, which matters if your buyer becomes insolvent before payment.
Set-off. Clarifies whether either party can deduct amounts it claims are owed against amounts it owes — particularly relevant if you have an ongoing relationship with the same counterparty on multiple projects.
Non-solicitation. Where your engagement involves meaningful contact with the other party's clients or staff, a time-limited non-solicitation clause protects against poaching without the complexity of a full restraint of trade.
Entire agreement. States that the written contract is the complete agreement between the parties, displacing earlier proposals, emails, or verbal commitments. Useful — but remember that pre-contractual representations that induced you to sign may still be actionable regardless of this clause.

How Artificer Legal can help you get these clauses right

Express terms are only as useful as the precision with which they are drafted and the consistency with which they are applied. When we review or draft commercial contracts for clients, a few areas consistently require the most attention:

Scope and variation. We look at whether the scope is specific enough to be enforced and whether the contract includes a clear mechanism for agreeing to and pricing changes. Contracts without a variation pathway invite scope-creep disputes.

Liability architecture. We assess whether the cap is set at a commercially reasonable level, whether indirect-loss exclusions are lawful in context, and whether carve-outs for the non-excludable consumer guarantees under the Australian Consumer Law are correctly drafted. Since the unfair contract terms reforms commenced on 9 November 2023, terms in standard form contracts with small businesses (fewer than 100 employees or annual turnover under $10 million) that create a significant imbalance in the parties' rights and obligations can be void — so overly one-sided liability terms carry real legal risk.

Execution formalities. We confirm that the right people are signing and that the method of execution complies with s 127 of the Corporations Act 2001 (Cth) where a company is a party — including where parties are signing in counterparts or electronically. An unsigned or improperly executed contract is difficult to enforce.

Document hierarchy. Where a deal involves a master agreement, a scope of work, purchase orders, and email correspondence, we ensure the contract clearly states which document prevails in the event of a conflict. Without this, a counterparty can point to whichever document suits them.

The scope clause and its change control

If there is a single drafting choice that separates contracts that work from ones that don't, it is the scope clause — not because it is the most dramatic, but because almost every other dispute traces back to it. Unclear scope produces disagreements about deliverables, which produce disagreements about fees, which produce disagreements about termination rights, which end up in litigation or mediation. Getting scope precise and pairing it with a clean change-control process — in writing, triggered by either party, priced before it is approved — removes the friction that feeds most commercial disputes before it accumulates.

To summarise: express terms are the rules your commercial relationship actually runs on. The essential ones — scope, pricing, payment, risk allocation, IP ownership, confidentiality, termination, and governing law — should each be addressed specifically, consistently, and with enough precision that the path through the contract is obvious when things get complicated. Implied terms and statutory defaults fill some gaps, but they are an uncertain backstop. Your written terms need to do the work.