Layby Agreement (Australia)
Layby Reference No.: [Layby Reference]
Date: [Agreement Date]
SELLER:
[Seller Name] (ABN: [Seller ABN])
[Seller Address], [Seller Suburb] [Seller State] [Seller Postcode]
Phone: [Seller Phone]
CUSTOMER:
[Customer Name]
[Customer Address], [Customer Suburb] [Customer State] [Customer Postcode]
Phone: [Customer Phone] Email: [Customer Email]
1. GOODS ON LAYBY
1.1 The Customer agrees to purchase, and the Seller agrees to sell, the following goods on layby (the "Goods"):
[Goods Description]
1.2 The Seller agrees to hold the Goods at [Storage Location] until the Customer has paid the full purchase price, provided the Customer complies with this Agreement.
1.3 Risk in the Goods remains with the Seller during the layby period. If the Goods are damaged or destroyed while in the Seller's possession before delivery to the Customer, the Seller must notify the Customer. In such case, the Customer is entitled to a full refund of all amounts paid.
1.4 Title to and possession of the Goods does not pass to the Customer until the full purchase price has been paid and the Goods have been delivered to or collected by the Customer.
2. PURCHASE PRICE, DEPOSIT, AND BALANCE
Total purchase price (GST-inclusive): AUD $[Total Purchase Price]
Deposit paid on [Agreement Date]: AUD $[Deposit Amount]
Balance owing: AUD $[Balance Owing]
2.1 The total purchase price of AUD $[Total Purchase Price] is inclusive of GST at 10% pursuant to the A New Tax System (Goods and Services Tax) Act 1999 (Cth). A valid tax invoice will be issued to the Customer upon payment of each instalment.
2.2 The purchase price is fixed as at the date of this Agreement and will not increase during the layby period, except where the Customer requests a variation to the Goods that results in an increased price (which must be agreed in writing).
3. INSTALMENT SCHEDULE
3.1 The Customer agrees to pay the balance of AUD $[Balance Owing] by [Number of Instalments] [Instalment Frequency] instalments of AUD $[Instalment Amount] each (or such lesser amount for the final instalment as is required to discharge the balance in full).
3.2 The first instalment is due on [First Instalment Date]. Subsequent instalments are due [Instalment Frequency] thereafter. All instalments must be paid in full by [Final Instalment Date] (the "Completion Date"), by which date the Goods must be collected or delivery arranged.
3.3 Payment must be made by [Payment Method]. Instalments must be paid in Australian dollars (AUD). No interest or finance charge is applicable to the layby balance during the layby period.
3.4 If the Customer does not collect the Goods within 30 days of the Completion Date after paying the full purchase price, the Seller may charge a reasonable storage fee of up to AUD $5.00 per day until the Goods are collected.
4. CANCELLATION BY CUSTOMER
4.1 The Customer may cancel this Layby Agreement at any time before the Goods are delivered or collected, by notifying the Seller in writing or in person.
4.2 If the Customer cancels this Layby Agreement, the Seller is entitled to deduct from the amount paid by the Customer a cancellation fee of AUD $[Cancellation Fee] (the "Cancellation Fee"). The Seller will refund all remaining amounts paid by the Customer within 10 business days of cancellation.
4.3 The Cancellation Fee represents a genuine pre-estimate of the Seller's reasonable costs of establishing and maintaining the layby arrangement, including administrative, storage, and opportunity costs, in accordance with section 96(3) of the Australian Consumer Law (ACL).
4.4 If the amount already paid by the Customer is less than the Cancellation Fee, the Seller may not recover the shortfall from the Customer — the Cancellation Fee is limited to the amounts already paid by the Customer.
5. CANCELLATION BY SELLER
5.1 The Seller may cancel this Layby Agreement only in the following circumstances permitted by section 97 of the Australian Consumer Law: (a) the Customer breaches a term of this Layby Agreement that is not remedied within 7 days of written notice to the Customer; (b) the Seller is closing its business or ceasing to supply goods of the type covered by this Agreement; or (c) the Goods are no longer available for any reason (including being discontinued by the manufacturer or being unavailable due to circumstances beyond the Seller's control).
5.2 If the Seller cancels this Layby Agreement, the Seller must refund all amounts paid by the Customer within 10 business days, without deducting any cancellation fee. The Seller may not charge a cancellation fee where the Seller has initiated the cancellation.
5.3 The Seller must notify the Customer of cancellation in writing, setting out the reason for cancellation and confirming the refund amount and payment date.
6. AUSTRALIAN CONSUMER LAW RIGHTS
6.1 This Layby Agreement is a 'layby sale agreement' as defined in section 93 of the Australian Consumer Law (ACL), Schedule 2 to the Competition and Consumer Act 2010 (Cth). The rights of both the Customer and the Seller are governed by Division 3 of Part 3-2 of the ACL.
6.2 The Goods supplied under this Agreement come with guarantees that cannot be excluded under the ACL. For major failures, the Customer is entitled to a replacement or full refund. The Customer is also entitled to have the Goods repaired or replaced if the Goods fail to be of acceptable quality and the failure does not amount to a major failure.
6.3 No term of this Agreement limits, excludes, or modifies the Customer's rights under the ACL. Any term that purports to do so is void to that extent.
6.4 Layby sale provisions are set out in sections 93–99 of the ACL. Key statutory rights include: the right of the customer to cancel at any time before delivery (subject to a lawful cancellation fee); the obligation on the seller to refund all amounts paid (less any lawful cancellation fee) within 10 business days; the seller's right to cancel only in limited circumstances; and the requirement that this agreement be in writing and set out the instalment amounts and due dates.
7. GENERAL
7.1 This Layby Agreement is governed by the laws of [Seller State], Australia, and the parties submit to the jurisdiction of the courts of [Seller State].
7.2 The Seller will provide the Customer with a copy of this signed Layby Agreement and a receipt for all payments made.
7.3 In the event of any dispute arising from this Layby Agreement, the parties should first attempt to resolve the dispute by negotiation. If unresolved, either party may refer the matter to the relevant state consumer protection agency (e.g. Consumer Affairs Victoria, NSW Fair Trading, Queensland Office of Fair Trading, Consumer Protection WA, Consumer and Business Services SA, or the relevant NT or ACT authority).
7.4 This Layby Agreement may not be amended except by written agreement signed by both parties.
AGREED on [Agreement Date].
SELLER: [Seller Name]
ABN: [Seller ABN]
Signed: ________________________ Date: _______________
Name: _____________________________ Position: ___________
CUSTOMER: [Customer Name]
Signed: ________________________ Date: _______________
IMPORTANT: The Customer should retain a copy of this Layby Agreement and all payment receipts. If you have any questions about your rights, contact the consumer protection agency in your state or territory.
Seller
________________
Signature
Date: ________________
Customer
________________
Signature
Date: ________________
What Is a Layby Agreement (Australia)?
A Layby Agreement in Australia records the layby arrangement agreed between the parties and the specific obligations each side accepts, forming a binding agreement under the Corporations Act 2001 (Cth).
Layby sales have a long history in Australian retail — they were widely used before the advent of consumer credit cards and continue to be used by retailers of furniture, electronics, appliances, jewellery, and clothing as an alternative to credit-based finance. A key feature of a layby is that no interest or finance charge is imposed — the customer simply pays the purchase price in instalments. If interest or fees are charged on the deferred balance, the arrangement becomes a credit contract regulated by the National Consumer Credit Protection Act 2009 (Cth) rather than a layby under the ACL.
Section 94 of the ACL requires layby sale agreements to be in writing and to include mandatory terms: the price of the goods, the deposit and instalment amounts, the instalment due dates, the layby period, and the cancellation terms. Retailers who fail to comply with these requirements risk enforcement action by the Australian Competition and Consumer Commission (ACCC) or state and territory fair trading authorities.
The ACL also provides important statutory rights for customers in layby arrangements. A customer can cancel a layby at any time before delivery and receive a refund of all amounts paid, less a lawful cancellation fee (which must not exceed the seller's reasonable costs). Conversely, a seller can only cancel a layby in limited circumstances — if the customer breaches the agreement, the seller is closing its business, or the goods are no longer available — and must refund all amounts paid without deducting any cancellation fee.
The Australia Layby Agreement (Australia) template is designed for Australian retailers of all sizes offering layby arrangements and is fully compliant with the ACL's layby sale requirements.
The legal framework governing the Layby Agreement (Australia) in Australia draws on several key statutes and regulatory bodies. Under the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission (ASIC) regulates companies and financial services. Section 127 of the Corporations Act 2001 governs company execution of documents. The Australian Competition and Consumer Commission (ACCC) enforces the Competition and Consumer Act 2010 (Cth). The Australian Taxation Office (ATO) administers the Goods and Services Tax under the A New Tax System (Goods and Services Tax) Act 1999. The Federal Court of Australia and Supreme Courts of each state have jurisdiction over corporate disputes. Parties executing a Layby Agreement (Australia) in Australia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Corporations Act 2001 (Cth) sets the foundational requirements.
When Do You Need a Layby Agreement (Australia)?
A formal written layby agreement is legally required under section 94 of the Australian Consumer Law whenever a retail business offers a layby sale in Australia. Beyond the legal requirement, a written layby agreement is commercially essential in the following circumstances.
Furniture and homewares retailers: Layby is particularly common for high-value furniture, bedding, and homewares, where customers want to secure a product at a sale price but cannot pay in full immediately. A written layby agreement protects both the retailer (by documenting the instalment schedule and cancellation fee) and the customer (by confirming the purchase price is locked in and the goods are reserved).
Jewellery and luxury goods: Jewellers have offered layby for generations. A formal written agreement is especially important for custom or special-order items that cannot easily be resold if the customer cancels.
Electronics and appliances: Retailers of televisions, whitegoods, and computer equipment use layby to give customers time to save for expensive purchases. Given that models can be discontinued, the agreement should address what happens if the specific model becomes unavailable.
Toys and children's goods: Layby is particularly popular for expensive children's gifts such as bicycles, gaming consoles, and learning devices, where parents put items on layby months before Christmas or birthdays.
Boutique clothing and footwear: Small fashion retailers use layby to secure sales of seasonal, limited-edition, or custom items that the customer cannot afford outright.
Any time a retailer reserves goods for a customer against instalment payments, a written layby agreement should be completed and provided to the customer before any money changes hands.
Parties in Australia should prepare a Layby Agreement (Australia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission (ASIC) regulates companies and financial services. Section 127 of the Corporations Act 2001 governs company execution of documents. The Australian Competition and Consumer Commission (ACCC) enforces the Competition and Consumer Act 2010 (Cth). The Australian Taxation Office (ATO) administers the Goods and Services Tax under the A New Tax System (Goods and Services Tax) Act 1999. The Federal Court of Australia and Supreme Courts of each state have jurisdiction over corporate disputes. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Layby Agreement (Australia)
A compliant Australian layby sale agreement must contain the following key elements under the Australian Consumer Law and as a matter of good commercial practice.
Goods description: The goods must be identified with sufficient precision to make clear exactly what is being reserved. For standard retail items, include the product name, model number, colour or variant, and quantity. For custom or made-to-order items, include specification details. A vague description creates a risk that the customer and seller will disagree about what was agreed.
Total purchase price and GST: The full purchase price, inclusive of GST at 10%, must be stated. The GST component should be separately identified so the customer understands how much GST they are paying and the retailer can issue valid tax invoices for each instalment.
Deposit and balance: The agreement should state the deposit paid on the date of the layby and the outstanding balance. The deposit demonstrates the customer's commitment and partially compensates the seller for taking the goods off display.
Instalment schedule: The ACL requires the instalment amounts and due dates to be set out. The schedule should be realistic — instalments that are too high relative to the customer's means will lead to cancellation. A clear schedule also allows the retailer to follow up promptly if an instalment is missed.
Cancellation terms: The agreement must clearly state the customer's right to cancel at any time before delivery and the cancellation fee that applies. The fee must represent a genuine estimate of the seller's reasonable costs and must not exceed those costs. The seller's own cancellation rights — limited to breach, business closure, and goods unavailability — must also be clearly stated.
Refund obligation: Both the amount and the timeframe for refund on cancellation must be addressed. The ACL requires refunds to be made within 10 business days. Clearly stating the refund commitment demonstrates good faith and reduces the risk of disputes.
Additional compliance elements for a Layby Agreement (Australia) used in Australia include: Under the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission (ASIC) regulates companies and financial services. Section 127 of the Corporations Act 2001 governs company execution of documents. The Australian Competition and Consumer Commission (ACCC) enforces the Competition and Consumer Act 2010 (Cth). The Australian Taxation Office (ATO) administers the Goods and Services Tax under the A New Tax System (Goods and Services Tax) Act 1999. The Federal Court of Australia and Supreme Courts of each state have jurisdiction over corporate disputes. Forms-legal.com provides this template as a starting point for Australia-compliant documentation.
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author = {{Forms Legal}},
title = {Layby Agreement (Australia) (Australia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/australia/business/contracts/layby-agreement-australia}},
note = {Free legal document template. Based on Corporations Act 2001 (Cth)}
}Frequently Asked Questions
A 'layby sale' is defined in section 93 of the Australian Consumer Law (ACL), which forms Schedule 2 to the Competition and Consumer Act 2010 (Cth). A layby sale occurs when a consumer agrees to purchase goods and pays for them over time in instalments before taking delivery. The key characteristics of a layby sale under the ACL are: the buyer agrees to purchase specific goods; the seller holds the goods while the buyer pays in instalments; the buyer does not take possession until the full purchase price is paid; and no interest or finance charge is imposed on the deferred payments (if interest is charged, the arrangement becomes a credit contract regulated by the National Consumer Credit Protection Act 2009 (Cth) rather than a layby). Division 3 of Part 3-2 of the ACL (sections 93–99) sets out specific mandatory rules for layby sale agreements, including requirements for a written agreement, the right to cancel, and the limitations on cancellation fees.
Yes, but only within strict limits set by the Australian Consumer Law. Under section 96(3) of the ACL, if a customer cancels a layby agreement, the seller may charge a cancellation fee, but the fee must not exceed the seller's 'reasonable costs' of establishing and maintaining the layby arrangement. A fee that is punitive or disproportionate to the seller's actual costs is unlawful and may be challenged by the customer or the ACCC. Reasonable costs may include administrative processing costs, storage costs, and an allowance for opportunity cost (having held the goods off the sales floor). Importantly, if the seller cancels the layby — for example, because the goods are no longer available or the seller is closing — the seller cannot charge any cancellation fee whatsoever and must refund all amounts paid by the customer within 10 business days.
Under the Australian Consumer Law, risk in goods on layby remains with the seller during the layby period — the customer does not bear the risk of loss or damage because they do not yet have possession of the goods. If the goods are damaged, destroyed, or become unavailable before they are delivered to the customer, the seller must notify the customer and offer a full refund of all amounts paid. The seller cannot substitute different goods without the customer's agreement. If the goods are discontinued by the manufacturer or become permanently unavailable, this may be a ground for the seller to cancel the layby under section 97(1)(c) of the ACL, but the seller must still refund all amounts paid without charging a cancellation fee. This is an important protection for customers who put high-value items on layby — they are not at risk of losing their instalments if the goods are damaged while in the retailer's possession.
Yes. Section 94 of the Australian Consumer Law requires a layby sale agreement to be in writing. The written agreement must set out: the price of the goods; the amount of any deposit payable; the instalment amounts and the dates on which they are due; the period of the layby arrangement; the seller's cancellation terms; and any cancellation fee that may be charged if the customer cancels. Retailers who enter into layby arrangements without a written agreement, or whose written agreement does not contain the mandatory terms, are in breach of the ACL and may face enforcement action by the ACCC or a state/territory fair trading authority. The customer's right to cancel under section 95 of the ACL (with a refund minus a lawful cancellation fee) applies regardless of what the layby agreement says — these rights cannot be excluded by contract.
No. A true layby sale agreement does not attract the National Credit Code (NCC) because it does not involve the provision of credit. In a layby, the customer pays for goods in instalments before taking delivery — no credit is extended to the customer, and no interest or finance charge is imposed on the deferred payments. The NCC applies to credit contracts where a lender provides credit to a consumer for personal, domestic, or household purposes and a charge is imposed for providing that credit. However, if a retailer's 'layby' arrangement charges interest or other finance fees on the deferred balance, it ceases to be a layby under the ACL and instead becomes a credit contract subject to the NCC. Retailers should ensure their layby arrangements do not impose finance charges, or they will need to obtain an Australian credit licence under the National Consumer Credit Protection Act 2009 (Cth).
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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