Barter Agreement Template (Australia)

Updated on 13 August 2026

A barter agreement documents an exchange of goods or services between two parties without cash changing hands — each party agrees on what they're providing, its value, and when and how the exchange happens.

The widely circulated US free version of this document names its own parties inconsistently, says nothing about who owns the goods or bears the risk of loss before delivery, and has no tax content at all — despite the ATO treating a barter as assessable income at market value and as a transaction that can attract GST. This template fixes the party-naming error, adds title and risk-of-loss terms, and states the Australian tax position plainly.

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Barter Agreement

This Barter Agreement is made on between of ("Party A") and of ("Party B", together with Party A, the "Parties").

1. Description of the Exchange

Party A provides:
Fair market value:
Party B provides:
Fair market value:

Each Party represents and warrants that it has full legal ownership and authority over what it is providing under this Agreement, and that there are no liens or encumbrances on it.

2. Right to Inspect

Each Party may inspect what it is to receive under this Agreement for days following delivery. If a defect or discrepancy is found, the inspecting Party shall notify the other Party in writing, and the other Party shall have days to remedy it by repair or replacement.

OptionalInclude a balancing payment for unequal values

3. Value and Balancing Payment

If the fair market values stated above are unequal, shall pay the difference to the other Party at the time of delivery.

4. Title and Risk of Loss

Ownership of, and the risk of loss or damage to, each side of the exchange passes to the receiving Party only upon delivery as described below. Before delivery, each Party bears the risk of loss for what it is providing.

5. Delivery

Delivery of both sides of the exchange shall take place on at . Each Party shall exercise reasonable care in packaging, handling and transporting what it provides until delivery.

6. Tax Treatment

The Parties acknowledge that the fair market value received under this Agreement may be assessable income and may attract GST, and that each Party is solely responsible for its own GST and tax reporting arising from this exchange.

7. Termination

Before delivery, this Agreement may be terminated by mutual written agreement of the Parties. If either Party commits a material breach and fails to remedy it within days of written notice, the non-breaching Party may terminate this Agreement and claim reasonable compensation for any resulting loss.

8. General

This Agreement is governed by the law of , constitutes the entire agreement between the Parties, and may be amended only in writing signed by both Parties. If any provision is held unenforceable, the remaining provisions remain in effect. Notices under this Agreement shall be in writing and delivered to the addresses stated above.

Party A

Date:

Party B

Date:

A barter is taxable, not a way around tax

The ATO requires businesses to include the fair market value of goods or services received through a barter or trade-exchange transaction in their assessable income, in the same way as an ordinary cash sale. Where GST applies, the GST Act treats non-monetary consideration — including barter, part-exchange and in-kind payments — as attracting GST calculated on the market value of what's received (or, if unclear, of what was provided). A barter agreement that says nothing about this leaves both parties to discover it later, often at tax time. This template states the position directly and requires the parties to agree the fair market value of what each side is providing, which is also the figure each side needs for their own GST and tax reporting.

Decide when ownership and risk actually pass

The free version has an inspection and value-adjustment mechanism but never says when title to the goods passes, or who bears the risk if goods are lost or damaged between signing and delivery. This template adds both: ownership and risk pass at the delivery point stated in the agreement, not before, so neither side is exposed to loss of goods they don't yet own or haven't yet given up.

A goods-and-services structure, not goods-only

Many real barters exchange a service for goods, or a service for a service — the free version's structure only really works for a straightforward goods-for-goods swap. This template lets each party's side of the exchange be described as goods, services, or a combination, with the same inspection, valuation and delivery mechanics applying either way.

Clause-by-clause guide

Parties: Identifies Party A and Party B consistently throughout the agreement.
Description of the exchange: What each party is providing — goods, services, or both — described specifically enough to be checked against on delivery.
Fair market value: The value each party assigns to what they're providing, used for any balancing payment and for each party's own GST and tax reporting.
Right to inspect: Each party's right to inspect what they're receiving and raise any defect before accepting it.
Balancing payment: If the two sides' values differ, the party receiving the higher-value side pays the difference.
Title and risk of loss: Ownership and the risk of loss or damage pass at the delivery point stated in the agreement, not before.
Delivery: When and where each side of the exchange is delivered.
Tax treatment: States that GST and income-tax obligations may apply and are each party's own responsibility to report.
Termination: How the agreement can be terminated before delivery, and the remedy for a material breach after delivery.

Australian compliance checklist

Barter tax treatment applies regardless of what the agreement says — confirm your own GST and tax position with an accountant.

Include the market value of a barter in assessable income
The ATO requires the fair market value of goods or services received through bartering to be included in assessable income, to the same extent as an equivalent cash or credit transaction.
ATO — Bartering and trade exchanges
Understand GST on non-monetary consideration
Where consideration for a supply is not entirely monetary, as in a barter, the GST Act applies GST based on the market value of what was received (or, where that's unclear, of what was provided).
ATO — GSTR 2001/6, non-monetary consideration
A genuine arm's-length market value generally stands
The ATO will generally accept a fair market value as adequately reflecting the money value of a barter, including, in most cases, the price the taxpayer would normally charge a stranger for the same goods or services — which is why this agreement requires the parties to state the value of each side of the exchange.

How to use this template

Identify the parties. Enter Party A's and Party B's names and addresses.
Describe each side of the exchange. Describe what each party is providing and agree its fair market value.
Set the delivery terms. Enter the delivery date and location for each side of the exchange.
Add any balancing payment. If the values differ, enter the balancing payment and who pays it.
Sign and keep a copy for your GST and tax records. Both parties sign, and each should keep the agreed values for their own GST and tax reporting.

Frequently asked questions

Is bartering actually taxable, or is that just for businesses?

It applies wherever the barter is part of your business's trade — the ATO requires the fair market value of goods or services received through bartering to be included in assessable income, the same as an ordinary cash transaction.

Do I need to charge GST on my side of a barter?

If you're GST-registered and the barter is part of your enterprise, generally yes — GST applies to non-monetary consideration based on the market value of what's received.

Who decides the value of what's being exchanged?

The parties agree it between themselves. The ATO will generally accept a genuine fair market value, including the price you'd normally charge a stranger for the same goods or services.

When does ownership of the goods actually transfer?

Under this template, at the delivery point stated in the agreement — not at signing, and not before. The risk of loss or damage transfers at the same point.

Can I barter a service for goods, not just goods for goods?

Yes — this template lets each side of the exchange be goods, a service, or a combination, with the same valuation and delivery mechanics applying either way.

What happens if the goods are damaged before I even inspect them?

Because risk of loss doesn't pass until delivery under this template, damage before that point is the delivering party's responsibility to resolve, not something the receiving party has to absorb.

Can either party back out before the exchange happens?

Yes, by mutual written agreement, or unilaterally for the other party's uncured material breach. Once delivery has happened, backing out is a breach subject to the agreement's remedies rather than a simple withdrawal.

Related templates

Bilateral Contract: Meaning and Template (Australia)

Disclaimer

This template and guide are for general information only and do not constitute legal or tax advice. Barter transactions have real GST and income-tax consequences. Confirm your specific GST and tax position with an accountant before relying on this agreement.