Agreement For Supply Of Goods On Credit Template for Australia

An Agreement For Supply Of Goods On Credit is a commercial contract that allows suppliers to provide goods to customers on credit terms while establishing clear legal protections and payment obligations. This arrangement is fundamental to many business relationships in Australia, where suppliers extend credit facilities to trusted customers rather than requiring immediate payment upon delivery.

When do you need this document?

You need this agreement when establishing ongoing supply relationships where payment will be made after delivery. This is common in wholesale distribution, manufacturing supply chains, retail restocking arrangements, and professional services requiring regular inventory. The document is particularly important for suppliers who want to extend credit while protecting their interests through formal terms, security arrangements, and clear remedies for non-payment. It's also essential when customers require credit terms to manage their cash flow but suppliers need legal certainty about payment obligations and recovery rights.

Key legal considerations

The agreement must carefully balance credit terms with security provisions to protect the supplier's interests. Credit limits should be set based on proper assessment criteria and regularly reviewed to manage exposure. Payment terms need to specify due dates, interest rates on overdue amounts, and consequences of default. Security provisions may include retention of title clauses, personal guarantees from directors, or registered security interests under the Personal Property Securities Act. The document should also address dispute resolution, termination rights, and recovery procedures. Important clauses include credit assessment rights, set-off provisions, and clear definitions of default events that trigger remedies.

Legal requirements in Australia

Australian law imposes specific requirements on credit arrangements through the Personal Property Securities Act 2009, which governs security interests in goods supplied on credit. If you retain title until payment, you must register your interest on the Personal Property Securities Register within prescribed timeframes. The Australian Consumer Law protects consumers through mandatory warranties and prohibitions on unfair contract terms, though this primarily applies to consumer transactions rather than business-to-business credit arrangements. State Sale of Goods Acts govern fundamental obligations regarding quality, fitness for purpose, and title. The National Consumer Credit Protection Act may apply if the arrangement constitutes regulated credit activities. You must also comply with competition law requirements and ensure terms don't constitute unconscionable conduct under the Competition and Consumer Act 2010.