What is the difference between a service agreement and a contractor agreement?

A service agreement is the broader commercial contract between a business supplier and a client for services. A contractor agreement typically describes the engagement of an individual contractor or small entity. The key legal difference is that contractor agreements must carefully distinguish the relationship from employment.

Can I limit my liability in a service agreement?

Yes, but with limits. Liability caps and exclusions are enforceable between businesses subject to the unfair contract terms regime. You cannot exclude liability for consumer guarantees under the Australian Consumer Law, though section 64A allows limitation to resupply for services not of a kind ordinarily acquired for personal use.

What happens if the client is a consumer under the ACL?

Consumer services acquired for personal use or below the prescribed threshold attract non-excludable guarantees. The agreement should acknowledge these rights and avoid terms that purport to exclude or modify them, which would be void under section 64.

Who owns the IP created under a service agreement?

By default, the service provider owns newly created IP. Most agreements assign ownership to the client on payment, while the service provider retains ownership of its pre-existing IP (with a licence to the client) and any general know-how and tools.

Do I need to register for GST?

If your annual turnover is $75,000 or more, you must register for GST under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) and charge GST on taxable supplies. The agreement should state whether fees are inclusive or exclusive of GST.

How do I terminate a service agreement?

Termination mechanisms are set out in the agreement — typically for convenience on notice, or immediately for material breach, insolvency, or other for-cause events. Accrued rights usually survive termination, as do confidentiality, IP, and liability limitation clauses.

Are electronic signatures valid?

Yes. The Electronic Transactions Act 1999 (Cth) and state equivalents recognise electronic signatures where the method is reliable and the signatory has consented to signing electronically.

Which court hears disputes under a service agreement?

The agreement's jurisdiction clause nominates a state. Commercial disputes are typically heard in the relevant state Supreme Court or the Federal Court of Australia, depending on the value and subject matter. Mediation and arbitration under the state Commercial Arbitration Acts are common pre-litigation steps.

BusinessAustralia

Service Agreement Template

A service agreement sets out the terms on which a business supplies services to a client. Use our free Australian template to define scope, fees, liability limits, and intellectual property ownership in a contract that complies with the Australian Consumer Law and standard commercial practice.

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SERVICE AGREEMENT

State Of New South Wales, Australia

CLIENT

Southern Ventures Pty Ltd

200 George Street, Sydney NSW 2000 · ABN 56 789 012 345

By: James T. O'Brien

SERVICE PROVIDER

Harbour Digital Pty Ltd

Level 12, 1 Martin Place, Sydney NSW 2000 · ABN 12 345 678 901

By: Sarah J. Mitchell

Fixed fee of 38,500.00 AUD

1 May 2026 to 31 August 2026 · Net 14 Days

This Service Agreement (this "Agreement") is entered into as of 1 May 2026 by and between Southern Ventures Pty Ltd ABN 56 789 012 345 (the "Client") and Harbour Digital Pty Ltd ABN 12 345 678 901 (the "Service Provider"). The parties agree as follows:

SCOPE OF SERVICES

The Service Provider agrees to perform the following services (the "Services") for the Client:

Complete redesign and development of corporate website including responsive design, CMS integration, SEO optimisation, analytics setup, and staff training. Three revision rounds included per milestone.

The Service Provider shall perform the Services in a professional and workmanlike manner consistent with applicable Australian industry standards. The Service Provider acknowledges that, to the extent the Client is a consumer within the meaning of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)) ("ACL"), certain statutory guarantees apply and cannot be excluded.

TERM

This Agreement shall commence on 1 May 2026 and shall continue until 31 August 2026, unless earlier terminated in accordance with this Agreement.

FEES, PAYMENT AND GST

The Client shall pay the Service Provider as follows: Fixed fee of 38,500.00 AUD. Payment terms: Net 14 Days. All fees are exclusive of GST. If the Service Provider is registered for GST, applicable GST (currently 10%) shall be added to invoices and the Service Provider shall issue valid tax invoices in accordance with the A New Tax System (Goods and Services Tax) Act 1999 (Cth). Late payments shall accrue interest at the rate of 10% per annum from the due date until paid in full.

ACCEPTANCE AND DELIVERY

Upon delivery of any deliverable, the Client shall have ten (10) business days to review and either accept the deliverable or provide written notice of specific deficiencies. If no written notice of deficiencies is provided within that period, the deliverable shall be deemed accepted. The Service Provider shall remedy material deficiencies within a reasonable time at no additional charge. Risk in any deliverable transfers to the Client upon acceptance.

WARRANTIES

The Service Provider warrants that the Services will be performed with due care and skill, and that any materials provided will be reasonably fit for the purpose for which they are supplied. To the maximum extent permitted by law (including the ACL), all other warranties — whether express, implied, statutory, or otherwise — are excluded. Where the Client acquires the Services in trade or commerce and not as a consumer (within the meaning of the ACL), the statutory guarantees under ss. 60–62 of the ACL apply but may be limited as set out in this Agreement to the extent permitted by s. 64A of the ACL.

CONFIDENTIALITY

Each party agrees to hold in strict confidence all proprietary or confidential information disclosed by the other party in connection with this Agreement ("Confidential Information"), and to use such information solely for the purposes contemplated herein. This obligation shall survive termination for two (2) years. Neither party shall disclose the other party's Confidential Information to any third party without prior written consent. The Service Provider shall handle any personal information of the Client's customers or employees in accordance with the Privacy Act 1988 (Cth) and the Australian Privacy Principles ("APPs").

LIABILITY

To the maximum extent permitted by the ACL and other applicable Australian law, the Service Provider's liability to the Client for any claim arising out of or in connection with this Agreement (whether in contract, tort, statute, or otherwise) is limited to the total fees paid by the Client under this Agreement in the twelve (12) months preceding the claim. Neither party is liable for any indirect, consequential, special, incidental, or punitive loss or damage, loss of profits, loss of revenue, or loss of data arising out of or in connection with this Agreement, even if advised of the possibility of such loss. Nothing in this clause limits liability for death or personal injury caused by negligence, fraud, or any liability that cannot be excluded under the ACL.

INTELLECTUAL PROPERTY ASSIGNMENT

All work product, deliverables, and intellectual property created by the Service Provider in the performance of the Services (the "Work Product") shall be the sole and exclusive property of the Client upon full payment of all fees. The Service Provider hereby assigns to the Client all right, title, and interest in the Work Product, including all rights under the Copyright Act 1968 (Cth) and all moral rights to the extent waivable under that Act. The Service Provider retains ownership of any pre-existing intellectual property ("Background IP") and grants the Client a non-exclusive, perpetual licence to use such Background IP as incorporated in the Work Product. The Service Provider shall execute any documents reasonably required to perfect such assignment under Australian law, including under the Corporations Act 2001 (Cth) s. 199A (execution by companies).

LIQUIDATED DAMAGES FOR DELAY

If the Service Provider fails to deliver any deliverable by the agreed deadline and such failure is not caused by the Client or a force majeure event, the Client may deduct liquidated damages of 500.00 AUD per day for each calendar day of delay, up to a maximum of 10% of the total contract value. The parties acknowledge that such amount represents a genuine pre-estimate of the Client's loss and is not a penalty. This clause is subject to Australian common law principles on liquidated damages and shall be construed accordingly.

10.

INDEMNIFICATION

Each party (the "Indemnifying Party") shall indemnify, defend, and hold harmless the other party and its officers, directors, employees, and agents from and against any and all claims, damages, losses, costs, and legal expenses (including on a full indemnity basis) arising from: (a) the Indemnifying Party's breach of this Agreement; (b) the Indemnifying Party's negligence or wilful misconduct; (c) any claim that materials or deliverables provided by the Indemnifying Party infringe any third-party intellectual property rights; or (d) the Service Provider's failure to comply with the Privacy Act 1988 (Cth) APPs in respect of personal information handled in connection with this Agreement.

11.

TERMINATION

Either party may terminate this Agreement without cause by providing 30 days' written notice. Either party may terminate immediately upon written notice if the other party: (a) materially breaches this Agreement and fails to remedy such breach within 14 days of written notice; (b) becomes insolvent, is wound up, or has a receiver or administrator appointed (see Corporations Act 2001 (Cth)); or (c) repeatedly fails to meet agreed service standards. Upon termination, the Client shall pay for all Services performed and expenses properly incurred to the termination date. Any Work Product not yet paid for remains the property of the Service Provider until full payment is received.

12.

DISPUTE RESOLUTION

Any dispute arising out of or in connection with this Agreement shall first be referred to good faith negotiation between senior representatives for 15 business days. If unresolved, either party may refer the dispute to mediation administered by the Australian Disputes Centre ("ADC") or a mutually agreed mediator in New South Wales. If mediation is unsuccessful within 30 days of referral, either party may commence proceedings in the courts of New South Wales. Nothing prevents either party from seeking urgent interlocutory relief.

13.

GOVERNING LAW

This Agreement is governed by and construed in accordance with the laws of the State of New South Wales and, where applicable, the laws of the Commonwealth of Australia, without regard to conflict of laws principles. Each party submits to the non-exclusive jurisdiction of the courts of New South Wales.

14.

GENERAL PROVISIONS

Independent Contractor: The Service Provider is an independent contractor and not an employee, partner, or agent of the Client. Nothing in this Agreement creates an employment relationship subject to the Fair Work Act 2009 (Cth). Entire Agreement: This Agreement constitutes the entire agreement between the parties and supersedes all prior understandings. Amendment: No amendment is valid unless in writing and signed by both parties. Severability: If any provision is invalid or unenforceable, it shall be severed and the remaining provisions shall remain in full force. Force Majeure: Neither party shall be liable for delay or failure caused by events beyond its reasonable control. Electronic Execution: This Agreement may be executed electronically; electronic signatures are valid and enforceable under the Electronic Transactions Act 1999 (Cth) and applicable state legislation.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date first written above.

CLIENT

James T. O'Brien

Southern Ventures Pty Ltd

Date: ____________________

SERVICE PROVIDER

Sarah J. Mitchell

Harbour Digital Pty Ltd

Date: ____________________

What Is a Service Agreement?

A service agreement is a commercial contract between a service provider and a client that describes the services to be provided, the fees payable, performance standards, timelines, and the allocation of risk between the parties. It is used in a wide range of industries, including IT, marketing, consulting, professional services, facilities management, and creative services.

In Australia, service agreements are governed by the general law of contract supplemented by the Australian Consumer Law contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth). Where the client is a "consumer" within the meaning of section 3 of the ACL (generally, acquiring services for personal use or below the prescribed threshold, currently $100,000), statutory consumer guarantees of due care and skill, fitness for purpose, and reasonable time apply and cannot be contracted out of.

Business-to-business service agreements also attract the unfair contract terms regime in Part 2-3 of the ACL, which was substantially expanded in November 2023 to cover standard form contracts with small businesses (fewer than 100 employees or less than $10 million annual turnover). Terms that cause significant imbalance, are not reasonably necessary, and would cause detriment can be declared void, and the ACCC can seek civil penalties.

What's Covered in This Template

Our service agreement template covers every essential term for an Australian commercial services engagement.

Party Details

Legal names, ABNs, ACNs, and addresses of service provider and client.

Services Description

Detailed scope of work, deliverables, and service levels.

Term and Commencement

Start date, fixed or rolling term, and renewal mechanics.

Fees and Invoicing

Fixed, hourly, or milestone-based fees with GST and payment terms.

Client Obligations

Client cooperation, access, and timely provision of information.

Consumer Guarantees

Acknowledgement of non-excludable guarantees under the Australian Consumer Law.

Intellectual Property

Ownership and licensing of pre-existing and newly created IP.

Confidentiality

Mutual obligations to protect confidential information.

Privacy

Compliance with the Privacy Act 1988 (Cth) and Australian Privacy Principles.

Liability and Indemnity

Liability caps, exclusions, and mutual indemnities.

Termination

Termination for convenience, breach, and insolvency, with notice periods.

Dispute Resolution

Negotiation, mediation, and jurisdiction clauses.

How to Create a Service Agreement

Follow these steps to produce a professional Australian service agreement in minutes.

1
Enter Party Details
Provide legal names, ABNs or ACNs, and addresses for the service provider and client.
2
Describe the Services
Set out the scope of work, deliverables, service levels, and timelines.
3
Set Fees and Payment Terms
Specify the fee structure, invoicing cycle, GST, and late payment consequences.
4
Configure Liability and IP
Set liability caps, indemnity terms, and ownership of intellectual property.
5
Review and Download
Check governing state, termination grounds, and dispute resolution, then download the PDF.

Legal Considerations

Service agreements must align with the Australian Consumer Law and recent unfair contract terms reforms.

This template is for informational purposes only and does not constitute legal advice. Consult a qualified Australian legal practitioner for advice specific to your situation.

Reviewed for Australian law

Australian Consumer Law Guarantees

Sections 60 to 62 of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)) imply non-excludable guarantees into contracts for the supply of services to consumers: services will be rendered with due care and skill, will be reasonably fit for any disclosed purpose, and will be supplied within a reasonable time. These guarantees cannot be contracted out of; any such term is void under section 64.

Unfair Contract Terms

Part 2-3 of the ACL prohibits unfair terms in standard form contracts with consumers and, since 9 November 2023, small businesses. A term is unfair if it would cause significant imbalance, is not reasonably necessary to protect legitimate interests, and would cause detriment if relied upon. The ACCC can seek civil penalties up to $50 million per contravention under section 224, and terms declared unfair are void.

Misleading and Deceptive Conduct

Section 18 of the ACL prohibits misleading or deceptive conduct in trade or commerce. Service providers should ensure statements about capabilities, qualifications, and expected outcomes are accurate. Disclaimers may reduce, but not eliminate, liability where the conduct is misleading.

Privacy and Data Handling

Where services involve handling personal information, the Privacy Act 1988 (Cth) and the thirteen Australian Privacy Principles apply to organisations with turnover over $3 million and certain other entities. The Notifiable Data Breaches scheme in Part IIIC requires notification to affected individuals and the Office of the Australian Information Commissioner in the event of an eligible data breach.

Frequently Asked Questions

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