What should I check before signing a contract?

• Parties. Are the full legal names and ABNs or ACNs correct? If you operate through a company, make sure the company signs, not you personally. Look for a personal guarantee tucked into the terms.
• Scope. What exactly will be delivered, to what standard and by when? What's excluded? Vague scope is the most common source of disputes.
• Payment. How much, whether GST is included, when it's due, and whether there are deposits, late fees or rights to increase prices during the contract.
• Other documents. If the contract says it includes other terms, such as online terms and conditions or a policy, those form part of the deal. Read them too, and check whether the other side can change them without your agreement.

Check how long the contract runs and whether it renews automatically. If it does, note the window for giving notice that you don't want to renew. It's often short and easy to miss.

Then look at how each side can end it. Can you terminate if the other side breaches? Can either side end it for convenience, and with how much notice? Are there exit fees? What happens to work in progress, payments and your data when it ends?

These clauses decide who pays when something goes wrong.

• Liability caps. Is the other side's liability limited to a small amount while yours is unlimited?
• Exclusions. Are losses like lost profits excluded for them but not for you?
• Indemnities. An indemnity is a promise to cover the other side's losses. Broad indemnities can expose you to claims well beyond the contract's value.
• Insurance. Does the contract require cover you don't have?

If anything will be created under the contract, such as designs, code or content, check who owns it. A contractor generally owns the IP they create unless the contract says otherwise, so if you're paying for it, make sure ownership transfers to you. Check the confidentiality clause too, and how your data and customer information will be stored, used and returned.

Look at the dispute resolution clause. Many require negotiation or mediation before court. The governing law clause says which state's laws and courts apply, which matters if the other side is interstate.

Since 9 November 2023, it has been illegal to propose, use or rely on unfair terms in standard form contracts with consumers or small businesses, and penalties apply. A business is generally covered if it has fewer than 100 employees or annual turnover under $10 million.

Terms that may be unfair include ones that let only one side vary the contract, end it, avoid liability, or penalise the other side for breach. A court can declare an unfair term void. The protections don't cover the upfront price or the main subject matter of the contract.

If something doesn't sit right, raise it before you sign rather than hoping to sort it out later. A Sprintlaw lawyer can review a contract for a fixed fee.