Contract Review Checklist

This checklist sets out a summary of important issues that you should consider when
reviewing a transport contract between you and your customer.

Issue Considerations Yes N/A

Parties Have you checked that your company or business name and ACN/ABN on
any agreement is correct?
Have you checked that the ABN and ACN of your customer on any contract is
correct?
Have you ensured that there are no provisions that seek to exclude the
Liability and indemnity*
operation of any of proportionate liability legislation?
Have you made sure that the contract does not contain any reflexive
indemnities?
Any form of reflexive indemnity may affect insurance cover. A reflexive
indemnity is one that requires the transport operator to indemnify the
customer for damages even where the customer’s own negligence causes
an accident or any loss or damage. Such a clause should be modified so that
you are not liable for the negligent acts or omissions of any third parties or of
your customer.
Consequential loss* Have you checked that you are not liable for consequential loss?
Consequential loss (indirect loss such as loss of profits because of delay)
is very difficult to quantify and to insure against, so you should attempt to
include provisions that remove or at least limit your liability for these losses.
Guarantee Have you checked that there are no directors’ guarantees in the contract?
Directors’ guarantees expose the directors’ personal assets if your company
is sued for breaching the contract.
Have you checked that there are no charging clauses or other clauses
Security
creating security rights in favour of the customer?
Have you checked the price is sufficient to allow you to make a reasonable
Pricing
profit margin?
Is there a provision for price review? Does the mechanism work?
Have you considered the effect on your business if third party charges are
increased? (e.g. port fees, tolls?) Can you increase the price if these charges
are increased?
Is there a provision for a fuel levy? Does the mechanism work?
Consider the term of the agreement. The longer the term, the greater the
likelihood that your costs will change over that period and the greater the risk
of accepting a fixed price for work.
Is the payment term for invoices satisfactory? Can you manage cashflow
Payment terms
while waiting to be paid?

Contract Review Checklist Page 1

Exclusivity and Have you checked whether you have the exclusive right to provide services
restrictions regarding particular freight or a particular area? If not, is this acceptable?
Have you ensured that you are not locked in to accepting any job, regardless
of the details or delivery timeframe?
Have you checked that you are not restrained from providing services to
clients of your customer for a period of time after contract ends? If you are
so restrained, have you checked that the period and area of the restraint is
acceptable?
Have you checked that you are not agreeing to another state (where you do
Dispute resolution
not have an office) having jurisdiction?
Have you considered the dispute resolution clause and whether it requires
participation in expensive processes such as arbitration or mediation?
Can you engage subcontractors without providing written notice or seeking
Right to subcontract
consent on each and every occasion?
Will you be protected if the event ‘out of your control’ occurs (e.g. fire, flood,
Force majeure
fuel shortage)?
KPIs Are the KPIs practical and achievable?
Codes, policies and Have you been provided with copies of any codes, policies or procedures
procedures incorporated into the contract and checked that compliance is practicable?
Does the contract contain chain of responsibility warranties that apply to the
Chain of responsibility customer? (e.g. in relation to packaging of goods for transport and delivery
requirements)
Have you checked that there are no clauses in the contract that would
provide an incentive to breach the Heavy Vehicle National Law?
Reporting, auditing,
Is the amount you will be paid appropriate having regard to your likely costs
meetings, training and
to comply with:
equipment/vehicles
• reporting requirements;

• audit requirements;

• meeting requirements;

• training and induction for drivers or other staff; and

• altering or modifying vehicles or vehicle systems to meet contractual

* These clauses should be always referred to your insurance broker/insurer for comment/confirmation that they will not affect
your rights under your insurance policies.

The Heavy Vehicle National Law (HVNL) and regulations imposes a primary duty in the chain of responsibility. Businesses are
required to comply by identifying their risks, and develop and implement control measures tailored to their circumstances. This
Form is a guide only and does not contain a definitive list of Heavy Vehicle National Law and regulatory requirements. To meet
your obligations under the HVNL and regulations you are required to seek independent advice to assess your circumstances

National Transport Insurance is a joint venture of the insurers Insurance Australia Limited trading as CGU Insurance ABN 11 000 016 722 AFSL 227681 and AAI Limited
trading as Vero Insurance ABN 48 005 297 807 AFSL 230859 each holding a 50% share. National Transport Insurance is administered on behalf of the insurers by its
manager NTI Limited ABN 84 000 746 109 AFSL 237246.

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