You have the go-ahead, but no signature yet
Your client has approved the project, the budget is there, and they want the work to start now. The contract is sitting in their inbox, unsigned. You can hold the work until the signed document comes back, or you can start on the strength of the email, the purchase order or the phone call, and formalise the paperwork as the job gets underway.
The decision you are actually making
Most businesses treat this as a binary choice between a signed contract and no contract at all. It is not. Under Australian contract law, a contract is formed by offer, acceptance, consideration and an intention to create legal relations. A signature is one method of proving acceptance, but it is not the only method, so the real question is narrower than it looks: can you prove, from the evidence, that the client accepted your offer on your terms, from someone with authority to bind them?
Your two options are these:
- Wait for formal execution: hold the work until the client signs the contract, by hand or electronically, using an execution block that matches who they are. If the client is a company, this means signing in line with s 127 of the Corporations Act 2001 (Cth) (the Act), which creates assumptions you can rely on.
- Start on informal acceptance: begin the work on the strength of an email, a purchase order, a deposit or a verbal agreement, and treat the signed contract as a formality to be completed alongside the work.
Both options can be legitimate. The mistake is treating either one as automatically right. Some businesses wait weeks for a signature they never needed, losing momentum and cash flow, while others start on a vague email and discover at dispute time that they never secured acceptance of the terms that mattered. One assumption also needs flagging: some deals cannot proceed informally at all. A contract for the sale of an interest in land must be in writing and signed by the party to be charged under s 54A of the Conveyancing Act 1919 (NSW), and deeds carry their own execution rules.
Five factors that should drive the decision
These five factors separate the cases where starting early is a sensible commercial call from the cases where it is a quiet disaster in the making.
Can you prove acceptance without a signature?
Start with the evidence. Acceptance can be communicated by words or by conduct, and Australian courts regularly enforce contracts that were never signed.
In Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523, the NSW Court of Appeal held that a developer who knew the terms of an architect's offer and let the work proceed without objection was bound by those terms, even though nothing was signed. Silence, combined with taking the benefit of performance, can amount to acceptance of an offer the offeree knew about.
The same logic runs through the everyday documents of a small business:
- Email acceptance: a clear reply such as "we accept your proposal" can create a binding contract, provided the proposal identifies the terms being accepted. Under s 9 of the Electronic Transactions Act 1999 (Cth) and the matching state laws, writing requirements can be met electronically.
- Purchase orders: a PO can operate as acceptance of your quoted offer, particularly where the quote states that issuing a PO creates a contract on your terms.
- Deposits and part payment: paying an invoice or deposit can evidence acceptance of the terms the invoice refers to.
- Click-wrap: for online sales, ticking an "I agree" box is acceptance where the terms are accessible before the click.
- Conduct: both sides performing the deal as if it were in place can create a contract, even where no document was ever exchanged.
The weakness in every one of these is the same. They bind the client only on the terms you can prove were before them. A short email saying "sounds good" does not necessarily incorporate your standard terms, and a purchase order carrying its own printed terms can start a battle of the forms.
Does the person who said yes have authority?
This factor is the one businesses most often overlook. The person who tells you to start may have no power to bind their company.
Where the client is a company, the cleanest route is execution under s 127 of the Corporations Act. A company executes a document without a common seal by the signature of two directors, a director and a company secretary, or a sole director who is also the sole secretary (or the company's only officer, where there is no secretary). When a document appears to be signed in that way, s 129(5) of the Act lets you assume it has been duly executed, and s 128 entitles you to rely on that assumption in your dealings with the company, unless you knew or suspected it was wrong. That is the safe harbour: it removes most arguments about whether the right people signed.
The signature itself can be electronic. Part 1.2AA of the Corporations Act makes signing technology-neutral, so two directors do not need to be in the same room or the same state.
Contrast that with a project manager who emails "we're good to go". Unless that person has actual authority, or has been held out by the company as an officer or agent with authority under s 129(3), you may be relying on someone who cannot bind the client at all. If an individual offers to sign "for and on behalf of" a company, confirm their authority in writing before treating that as acceptance.
What protections do you give up by starting early?
Even where informal acceptance is strong enough to form a contract, it rarely protects you on the points that matter when things go wrong:
- Scope: without an agreed scope and a change-control process, "one more small thing" becomes a month of unpaid work.
- Payment: without accepted milestones, due dates and late-payment terms, invoicing becomes a negotiation rather than a formality.
- Liability: without an agreed cap on liability and exclusions for indirect loss, you carry more risk than you priced for.
- Intellectual property: without an IP clause, ownership of the deliverables can be disputed after you have handed them over.
- Authority: as noted above, you may have relied on someone who cannot bind the business.
A short acceptance email usually covers price and a rough scope. It rarely covers the other four. The question is not simply whether the client is bound, but whether the client is bound on the terms you need.
Do the formalities and stakes of this deal change the answer?
Two situations push firmly towards waiting.
The first is statutory formality. Most business contracts can be made informally, but some cannot. A contract for the sale of an interest in land must be in writing and signed by the party to be charged under s 54A of the Conveyancing Act 1919 (NSW), with equivalent provisions in other states. The section also confirms the contract can be created and signed electronically. Guarantees, certain credit contracts and similar arrangements carry their own statutory formalities in most jurisdictions, and a deed must be properly executed, which for a company means execution under s 127(3) of the Corporations Act. If the deal falls into one of these categories, informal acceptance will not do.
The second is commercial stake:
- Wait: new client, high-value project, unusual or bespoke terms (heavy subcontracting, complex IP transfers, strict deadlines), or any outstanding clause questions. If the client has said "we will come back to you on that clause", there is no final agreement yet, whatever their tone.
- Proceed at your own risk: long-standing client, modest job, standard terms clearly incorporated in a written acceptance, and a relationship where a misunderstanding is unlikely to end in a dispute.
How long would valid acceptance actually take?
The final factor is the one that pushes businesses into starting early, and it often rests on an outdated picture of how signing works. Valid acceptance can usually be secured in hours rather than weeks:
- Electronic signatures: under s 10 of the Electronic Transactions Act 1999 (Cth) and the matching state laws, a signature requirement is met where a method identifies the signer and indicates their intention, the method is as reliable as appropriate in the circumstances, and the recipient consents to electronic signing. E-signature platforms, and typed names in some contexts, satisfy this test for most business documents. A few categories of documents are carved out of the electronic transactions laws, so check the rules for your specific document rather than assuming.
- Electronic execution by companies: as noted, s 127 signatures can be given electronically under Part 1.2AA of the Corporations Act.
- Counterparts: a clause allowing the contract to be signed in counterparts and exchanged by email removes the "both directors need to be in the office" bottleneck.
- Clear acceptance instructions: an acceptance line at the front of the document, such as "accept by e-signing below or by replying to this email with the words 'we accept'", tells the client exactly what to do and gives you a clean record when they do it.
- A commencement condition: a clause stating that work starts only on receipt of the executed agreement and any upfront payment turns the decision into a process.
If the only obstacle is the mechanics of signing, you should almost never have to choose between starting early and waiting weeks. If the obstacle is that the client is still negotiating terms, that is not a signing problem, and starting early will not fix it.
Getting the call right with an Artificer Legal lawyer
The difficulty with this decision is that it turns on evidence you cannot always see from inside the business. An Artificer Legal practitioner will stress-test the assumption that the email or purchase order binds the client on your terms, check who has authority to sign and whether execution under s 127 has been done correctly, and model the downside if the informal deal falls apart.
If you decide to wait, a lawyer will draft the documents the chosen path needs: a master services agreement with a commencement condition, acceptance and priority-of-documents clauses, change control, payment triggers and late fees, a liability cap and indemnities, clear IP ownership provisions, and an execution block that lines up with s 127 for company clients. If you decide to proceed on informal acceptance, a lawyer can help you identify which protections are missing, send a confirmation that reiterates the key terms, and close the gaps in the next iteration of the contract.
For businesses that win work through quotes and purchase orders, a lawyer can also set up a one-page order form that captures the commercial essentials and acceptance, attached to standard terms, so every job pulls your protections into the deal without a full negotiation each time.
The question that decides whether you start
Before you start the work, answer one question on paper: can you show, from the evidence, that the client accepted your offer on your terms, from someone with authority to bind them? If the answer is yes, and the deal is small and familiar, proceeding on informal acceptance is a commercial call you can make with your eyes open. If the answer is no, or the deal is high-value, bespoke or still being negotiated, wait. A day of delay while the signatures are collected is cheaper than months spent arguing about scope, invoices and ownership of the work.
The middle ground is where businesses get this wrong. A signature is not the only route to a binding contract: email acceptance, purchase orders, deposits and conduct can all bind a client, and Australian courts have enforced contracts on that basis. But informal acceptance rarely carries the protections that matter, company clients can only be bound by people with real authority, and some deals carry formalities that no amount of goodwill can bypass. Weigh those factors, use electronic signing and counterparts to secure valid acceptance quickly, and treat outstanding clause questions as a stop sign rather than a delay.