What to check in a marketing agency contract before you sign

Why the contract matters more than the pitch

A proposal tells you what an agency hopes to do. The contract decides what you're actually committed to: how long you'll pay, what you can do if the work isn't delivered, who can change the price and what you walk away with at the end. Most disputes with an agency start with something that was in the contract all along and nobody read closely.

The government's business.gov.au advice is blunt about timing: "If you're not comfortable with a part or a word in the contract, don't sign it hoping to sort it out later. Once you sign, the contract terms are legally binding." The best time to ask questions is before you sign, when changing a clause is still a normal part of the conversation.

Many agency agreements are pre-written terms offered to every client. That matters, because Australia's unfair contract terms law gives small businesses some protection against one-sided terms in exactly this kind of contract. This guide is general information, not legal advice, so get advice on your own contract if the stakes are high.

What the unfair contract terms law covers

Under the Australian Consumer Law, an unfair term in a small business contract is void if the contract is a standard form contract. Business.gov.au describes these as "pre-written contracts a business offers on a 'take it or leave it' basis." A contract can still count as standard form even if you were able to negotiate minor changes or pick from options the other side set.

A contract is a small business contract if it's for goods or services and at least one party employs fewer than 100 people or had turnover of less than $10 million in its last income year. Part-time staff count as a fraction and casual staff only count if they're employed on a regular and systematic basis. Notice it's at least one party, so a contract with a small agency can qualify too. Business.gov.au says the current thresholds apply to contracts made or renewed on or after 9 November 2023.

A term is unfair if all three of these apply: it would cause a significant imbalance in the parties' rights and obligations, it isn't reasonably necessary to protect the legitimate interests of the party it favours, and it would cause detriment to the other party if it were relied on. A court must also consider how transparent the term is, meaning plain language, legible, clearly presented and readily available, and the contract as a whole.

Two limits are worth knowing. The law doesn't apply to the term that sets the upfront price or the term that defines the main subject matter, so it won't rescue a fee you agreed to and later regret. And a business that proposes or relies on an unfair term in one of these contracts can face a financial penalty, which gives a reasonable agency good reason to fix a one-sided clause when you point it out.

Check the minimum term, renewal and how you can leave

A minimum term isn't unfair by itself. Search, advertising and website work often need time before results are clear, and an agency has real setup costs. The question is balance. The Australian Consumer Law lists examples of terms that may be unfair, including terms that let one party but not the other end the contract, renew or not renew it, or that penalise one party but not the other for ending it.

Hypothetical example: a 12-month agreement renews for another 12 months unless you give 90 days' written notice, while the agency can end it with 14 days' notice for any reason. Nothing there is automatically void, but it's one-sided enough to question before you sign. Look for these points and write the answers in the margin:

• How long the minimum term is, and what happens when it ends: a rolling monthly arrangement, an automatic renewal or nothing.
• How much notice each side has to give, and whether the notice period is the same for both of you.
• Whether you can end the contract early if the agency doesn't deliver what it agreed, and how that's decided.
• Any exit, cancellation or early termination fee, and how it's calculated.
• What you'll still owe on the way out, such as committed ad spend, software subscriptions or work already started.

Separate the fees, the ad spend and the price changes

Agency costs usually come in layers: a management or retainer fee, the advertising spend paid to platforms like Meta or Google, and extras such as software, creative production and website changes. A contract that lumps these together makes it hard to see what you're paying for, and harder to compare two agencies fairly.

Watch for clauses that let the agency change things on its own. The Australian Consumer Law's examples of terms that may be unfair include terms that let one party but not the other vary the contract, let one party vary the upfront price without the other having a right to end the contract, and let one party change the services on its own. Check that the contract states:

• The management fee, whether it includes GST, and when it's invoiced.
• Whether ad spend is paid directly by you to the platform or passed through the agency, and whether any margin is added to it.
• Which tools, subscriptions and production costs are extra, and who has to approve them.
• How and when fees can rise, how much notice you'll get, and whether you can leave if you don't accept the increase.
• That changes to scope are agreed in writing by both of you, not announced by one side.

Pin down the deliverables and how performance is judged

Vague scope is where many disagreements start. "Ongoing optimisation" or "SEO services" can mean almost anything, so it's hard to say whether the work was done. A clear contract lists what will be produced or managed each month and what the agency needs from you, such as approvals, access and information about which leads became customers.

Another example of a term that may be unfair is one that lets one party decide on its own whether the contract has been breached or what it means. So be wary of wording that makes the agency the only judge of whether the work was satisfactory. Be equally wary of guaranteed rankings or lead numbers: no agency controls Google or Meta, and a promise like that usually comes with conditions. Make sure the contract covers:

• The specific deliverables, such as campaigns managed, pages built, articles written or reports provided, and how often.
• What you need to supply and by when, so delays on your side are clear too.
• What the monthly report will show, including enquiries and outcomes rather than activity alone.
• A regular review meeting and a named contact on each side.
• How a disagreement about the work will be raised and resolved.

Keep readingJudge whether your agency is working

Make sure you own the work, the accounts and the data

This is the clause owners most often miss. IP Australia says that "In Australia, IP created by a contractor is the property of the contractor unless otherwise stated in the contract," and gives websites, designs, drawings, databases and logos as examples. Without the right wording, the ads, landing pages or website you paid for may not be fully yours.

Agencies often reuse their own templates, code and tools, so it's reasonable for them to keep ownership of those and give you a licence to use them. What matters is that the work made for your business, and the accounts and data it runs on, stay with you when the relationship ends. Look for clear answers on:

• Who owns the creative, copy, images, landing pages and website built for you, and when ownership passes, such as on payment.
• Which of the agency's pre-existing tools or templates you can keep using after you leave.
• That your ad accounts, analytics, Business Profile, domain and hosting are owned by your business, with the agency given access.
• How your customer and lead data will be stored, protected and returned or deleted at the end.
• What handover the agency will provide when the contract ends, and how long it has to provide it.

Keep readingCheck who owns your ad accounts and assets

Run a short routine before you sign

You don't need to rewrite an agency's contract, but you should read all of it, including any terms and conditions linked from the proposal. Business.gov.au suggests keeping notes of what you discuss, including the date and time, and getting professional advice if you don't understand a term or don't feel comfortable with what you're agreeing to. It lists a lawyer, a Business Enterprise Centre or your professional association as places to go.

A good agency will expect questions and explain its terms plainly. If you're talking to Demandify about lead generation, ask for the scope, term, notice period and ownership arrangements in writing before you decide, exactly as you would with anyone else. Use this routine:

• Read the whole contract and every document it refers to, and mark anything you don't understand.
• Check the five areas above: term and exit, fees and changes, deliverables, ownership and data.
• Ask for one-sided clauses to be changed or explained, and get any agreed changes written into the contract.
• Keep dated notes of what the agency told you, especially anything that isn't in the written terms.
• Get advice before signing a long or expensive commitment, and keep a signed copy where you can find it.