A Supply Agreement is a legally binding contract between a supplier and a customer that governs the ongoing supply of goods, services, or a combination of both. In Australia, supply agreements are one of the most common commercial contracts and are used across every industry sector — from manufacturing and wholesale distribution to professional services and technology.

Under Australian law, supply agreements are subject to significant statutory regulation through the Australian Consumer Law (ACL), which is set out in Schedule 2 to the Competition and Consumer Act 2010 (Cth) and administered by the Australian Competition and Consumer Commission (ACCC) and state and territory consumer protection agencies. The ACL provides mandatory consumer guarantees for goods and services that cannot be excluded, restricted, or modified by contract where the customer is a consumer.

The Personal Property Securities Act 2009 (Cth) is also critically important in supply agreements. Where a supplier delivers goods to a customer on credit terms, the supplier retains title to the goods until they are paid for, and must register a purchase money security interest (PMSI) on the Personal Property Securities Register (PPSR) to protect its rights against the customer's creditors if the customer becomes insolvent.

GST at 10% applies to most taxable supplies of goods and services in Australia under the A New Tax System (Goods and Services Tax) Act 1999 (Cth). A Supply Agreement must clearly deal with GST — whether prices include GST, when tax invoices are issued, and the consequences if GST treatment changes.

A well-drafted Australian Supply Agreement will address: the goods or services being supplied; pricing and GST; delivery terms and risk of loss; payment terms and interest on late payment; quality standards and inspection rights; consumer guarantees and warranty limitations; limitation of liability; force majeure; confidentiality; and termination rights. This template is governed by Australian federal and state law and is suitable for use in all Australian states and territories.

A Supply Agreement is appropriate whenever there is an ongoing commercial relationship between a supplier and a customer for the regular supply of goods or services in Australia. Unlike a one-off sales contract, a Supply Agreement establishes the framework terms that apply to every order placed by the customer during the term of the agreement.

You need a Supply Agreement when you are: a manufacturer or wholesaler supplying goods to retailers or distributors on ongoing credit terms; a service provider supplying recurring professional, technical, or maintenance services to a business customer; a business that regularly purchases goods or services from a preferred supplier and wants certainty about pricing and delivery terms; an e-commerce retailer sourcing products from a domestic supplier; or any business that wants to establish standing terms for a commercial supply relationship rather than negotiating terms on each individual purchase order.

A Supply Agreement is particularly valuable when the supply relationship is long-term, high-volume, or involves significant reliance by either party on the other. For example, a manufacturer that retools its production line based on a supplier's product specifications needs contractual certainty about pricing, quality, and supply continuity. Similarly, a retailer that holds minimal stock in reliance on just-in-time delivery from a supplier needs to manage its exposure if the supplier fails to deliver.

For suppliers, the agreement provides protection against customer non-payment through PPSR registration of a purchase money security interest and a clear contractual right to charge interest on overdue invoices. For customers, the agreement provides certainty about quality standards, delivery lead times, and pricing — especially important where the customer's own production or service delivery depends on reliable supply.

A comprehensive Australian Supply Agreement should contain several key provisions.

The supply clause defines precisely what goods or services are being supplied. A detailed product or service description — ideally including a Schedule 1 with specifications — reduces the risk of disputes about what has been ordered and delivered. For goods, this should include technical specifications, applicable Australian Standards, and any packaging or labelling requirements.

The pricing and GST clause must clearly address whether prices are GST-inclusive or GST-exclusive, when prices can be reviewed, and how the supplier will communicate price changes to the customer. GST obligations must be reflected in the agreement to ensure tax invoices are issued correctly and input tax credits can be claimed.

The delivery clause sets out the delivery location, standard lead times, and — critically — when risk passes from the supplier to the customer. Australian courts apply the principle that risk passes with delivery unless the contract specifies otherwise. For high-value goods, the parties should consider insurance obligations during transit.

The payment terms clause establishes when invoices are due, what interest is payable on late payment, and the supplier's rights if payment is withheld. The Personal Property Securities Act 2009 (Cth) retention of title and PPSR registration provisions are essential to protect the supplier in the event of the customer's insolvency.

The quality and inspection clause sets Australian Standards compliance requirements and gives the customer a defined window to inspect goods after delivery and notify the supplier of defects. An inspection and deemed acceptance mechanism protects suppliers from late claims.

The consumer guarantees and warranty clause must comply with the Australian Consumer Law. Where the customer is a consumer, the statutory guarantees cannot be excluded. Where the customer is a business buyer acquiring goods for commercial use over the ACL threshold, the parties may agree on limited remedies for warranty breaches consistent with section 64A of the ACL.