Whether you run a construction company, events business or machinery hire operation, you’ll often face a key decision: should you offer equipment on a dry hire or wet hire basis?
Both models can work well in Australia, but they come with different legal and operational risks. Choosing the right one (and documenting it properly) can save you time, money and headaches.
In this guide, we’ll break down what dry hire and wet hire mean, how they differ, and the key legal issues to cover in your contracts so your business is protected from day one.
What Is Dry Hire Vs Wet Hire?
In simple terms, the difference comes down to people.
- Dry Hire: You supply the equipment only. The customer is responsible for providing a trained and licensed operator, using the equipment safely, and returning it in good condition.
- Wet Hire: You supply the equipment and a skilled operator to run it. You’re responsible for operating the equipment safely and delivering the agreed outcome or service.
Because control and responsibility shift depending on the model, your legal obligations and risk profile changes too. That’s why these arrangements should be documented in tailored contracts - a Dry Hire Agreement for equipment-only jobs, or a Wet Hire Agreement when you provide an operator as well.
Key Differences You Need To Understand
1) Who Has Control On Site?
With dry hire, the customer typically controls the site and the equipment’s day-to-day use. With wet hire, you or your operator will have more control over how and when the equipment is used.
2) Liability For Damage And Downtime
Dry hire arrangements usually place responsibility for loss, damage and misuse on the hirer (because they operate the equipment). In wet hire, you’ll often carry more risk around performance, safe operation and delays, since your operator is in the driver’s seat.
Either way, clarity in your contract about “who pays if something goes wrong” is essential - including damage, breakdowns, call-outs and downtime.
3) Safety And Compliance
On dry hire, the hirer must ensure operators are licensed, competent and follow site safety rules. On wet hire, you must ensure your operators are qualified, inducted and compliant with site requirements. Your contract should spell out training, inductions, PPE, and who is responsible for pre-start checks and risk assessments.
4) Deliverables And Performance
Dry hire focuses on delivering equipment in good working order. Wet hire often includes time-based services or project outcomes (e.g. “8 hours excavation with operator”). This affects how you set scope, performance standards and variations.
5) Insurance And Indemnities
Both models rely on appropriate insurance, but who must hold which policies differs. It’s common for dry hire customers to carry public liability and risk for the equipment while in their possession. Wet hire providers may need broader coverage given they control operation. Your contracts should align with your insurance positions and include sensible indemnities and limits of liability.
Which Model Is Right For Your Business?
There’s no one-size-fits-all answer - it depends on your capabilities, customer expectations and risk appetite.
- Choose Dry Hire if: you want lower staffing overheads, your customers prefer to use their own crews, and you’re focused on utilisation rates for your fleet.
- Choose Wet Hire if: your point of difference is skilled operators, you can command premium rates for turnkey delivery, and you’re set up to manage scheduling, supervision and compliance.
Many providers offer both. If you do, make sure the right contract is used every time - mixing dry and wet terms can create costly disputes about who was responsible for what.
If you’re unsure, it’s worth getting your templates set up properly from the start. Our team can prepare separate equipment-only terms and operator-included terms so your paperwork always matches the job.
What Should Your Hire Agreement Cover?
A strong agreement is your best risk management tool. Here are core clauses to include and tailor for each model.
Essential Clauses For Dry Hire
- Equipment Description and Condition: exact details of the plant, accessories, and pre-hire inspection records.
- Hirer’s Responsibilities: only trained, licensed operators; comply with laws and site rules; daily checks; prevent misuse or overloading.
- Loss, Damage and Theft: when risk passes; reporting obligations; who pays for repairs; excesses; fair wear and tear vs misuse.
- Breakdowns and Downtime: your obligations to repair/replace; exclusions if the issue is caused by misuse; limits on consequential loss.
- Hire Period and Off-Hire: when the hire starts and ends; delivery/collection logistics; return conditions; cleaning/fuel charges.
- Rates, Deposits and Late Fees: daily/weekly/monthly rates, minimum hire periods, bonds, and overrun charges.
- PPSR Security Interest: a right to register your ownership/interest on the Personal Property Securities Register (PPSR) to protect your equipment and prevent title disputes. If PPSR is new to you, it’s worth reading what the PPSR is and why it matters.
- Liability and Indemnities: clear allocation of risk, exclusions for your negligence, reasonable caps, and insurance requirements the hirer must meet.
- Termination and Recovery: when you can end the hire early and recover the equipment (including access to sites for retrieval).
Essential Clauses For Wet Hire
- Scope of Services: what your operator will do, required outputs, and any site-specific procedures or permits.
- Operator Qualifications: competency, licences and inductions; right to replace an operator; fatigue management and hours of work.
- Safety and Supervision: who directs the work, chain-of-responsibility obligations, and how toolbox talks and SWMS/JSA are handled.
- Performance and Delays: service levels, inclement weather, access delays, standby rates, and variation processes.
- Damage and Incident Management: incident reporting, insurance interaction and fault allocation when both parties are involved.
- Rates and Minimums: hourly/day rates, travel and mobilisation, minimum call-out periods, and overtime or shift loadings.
- Liability and Limits: proportionate liability, exclusions for indirect loss, and fair caps that reflect the value of the service.
For mixed fleets or where you sometimes include fuel, maintenance or ancillary services, it can be helpful to use a combined structure with clear schedules for Dry Hire vs Wet Hire inclusions. A tailored Wet/Dry Hire Agreement can be set up to handle both models cleanly.
Legal Compliance To Keep In Mind In Australia
Alongside your contracts, make sure your operations stay on the right side of Australian law.
Australian Consumer Law (ACL)
If you hire equipment or provide services to customers, you must comply with the Australian Consumer Law. This affects your advertising, unfair contract terms, and guarantees about fitness for purpose and acceptable quality. If you’re revisiting your templates, consider a quick unfair contract terms review so key clauses aren’t at risk.
It also helps to ensure your representations about equipment capability and safe use line up with reality. For a deeper dive, you can read about misleading or deceptive conduct under section 18 ACL.
PPSR And Title Protection
Registering your interest on the PPSR is crucial in dry hire so you remain protected if the hirer becomes insolvent or your equipment is mixed with other property. Our quick primer on why PPSR matters for your business explains how registration helps you avoid losing valuable assets.
If you take deposits, bonds or other collateral, it may also be worth advice on when and how to register a security interest.
Employment And Contractor Obligations
Wet hire usually involves your operators. Ensure you have a compliant Employment Contract (or contractor agreement if engaging independent operators), plus clear policies around safety, fatigue and site conduct. Paying correct entitlements and managing rostering are Fair Work essentials.
Safety And Licensing
Depending on the equipment, operators may need high risk work licences or specific competencies. Your agreement should require the customer (dry hire) or you (wet hire) to ensure licensing, inductions and safe systems of work are in place before wheels start turning.
Insurance And Damage
Contracts should align with your insurance program. Common requirements include public liability, equipment insurance, and motor/plant cover, with the right party responsible for excesses. Spell out proof of insurance and notification obligations after incidents.
Step-By-Step: Getting Your Hire Documents In Place
Step 1: Map Your Services And Risks
List your equipment types, typical job sites, whether you offer operators, and where problems usually arise (e.g. damage, delays, access issues). This will shape your contract structure.
Step 2: Choose Your Contract Suite
Most providers benefit from two templates: a Dry Hire Agreement for equipment-only and a Wet Hire Agreement when supplying operators. If you switch between models frequently, consider a master Wet/Dry Hire Agreement with schedules that toggle inclusions.
Step 3: Align Insurance And PPSR
Confirm who carries which insurances for each model and bake those requirements into your templates. For dry hire, create a simple workflow for PPSR registrations and off-hire procedures so there’s no confusion about when risk returns to you. If you aren’t set up for PPSR yet, start by understanding what the PPSR is and how it protects title.
Step 4: Check ACL And UCT Compliance
Have your agreements reviewed against the ACL, especially unfair contract terms. This is a simple way to reduce legal risk while keeping your protections intact, and a focused UCT review and redraft can usually be turned around quickly.
Step 5: Roll Out And Train Your Team
Make sure sales and dispatch teams understand when to use dry vs wet terms, how to manage variations, and when to call out additional charges (like cleaning, fuel or standby). Consistent use equals fewer disputes.
Common Scenarios And How To Handle Them
“The Site Delayed Us - Who Pays?”
In wet hire, include clear provisions for access delays, weather, and standby rates. In dry hire, delays typically don’t affect your responsibility (unless it impacts return timing), but your contract should set out minimum hire periods and off-hire processes.
“The Machine Came Back Damaged.”
Use pre- and post-hire inspection records, photos, and a damage schedule. Your dry hire terms should explain how repair costs are assessed, who pays transport, and how you deal with disputes.
“We Need An Extra Attachment On The Day.”
Build in a simple variation mechanism (email confirmation is often fine) and price lists for attachments, fuel, and consumables. Clarity upfront reduces arguments later.
“The Operator Got Sick Mid-Shift.”
Wet hire terms should let you replace the operator promptly and limit your liability for delays outside your control, while still committing to reasonable efforts to keep the job moving.
What Legal Documents Will You Typically Need?
- Dry Hire Agreement: equipment-only terms allocating risk for use, damage, breakdowns, off-hire and PPSR registration.
- Wet Hire Agreement: covers operator qualifications, safety, supervision, performance, delays and incident management.
- Purchase Order/Job Sheet: a simple, consistent way to capture scope, dates, site access and variations for each job.
- Credit Application and Terms of Trade: to set credit limits, late fees and security if you offer accounts.
- Employment Contract or Contractor Agreement: for operators, outlining duties, safety obligations and rostering expectations - a compliant Employment Contract helps prevent disputes.
- Privacy Policy (if you collect customer data): required if you meet certain thresholds or handle sensitive information in the course of bookings and credit checks.
- PPSR Process Documents: checklists and consents so your team consistently registers and manages security interests on hires.
You might not need every document right away, but getting the core hire agreement(s) right is the best place to start.
Key Takeaways
- Dry hire means equipment only; wet hire means equipment plus an operator - the shift in control changes your risk and legal obligations.
- Use the right template for the job. A tailored Dry Hire Agreement or Wet Hire Agreement should clearly allocate responsibility for safety, damage, downtime and variations.
- Make sure your terms comply with the Australian Consumer Law and won’t fall foul of unfair contract terms - a quick UCT check is a smart safeguard.
- Protect your ownership and priority by using the PPSR on dry hires, and align insurance responsibilities with what your contracts say.
- If you provide operators, support them with compliant Employment Contracts and clear policies around licensing, inductions and fatigue management.
- Train your team to apply the correct terms every time; consistent paperwork is the simplest way to prevent disputes and protect margins.
If you’d like a consultation on the right dry hire or wet hire documents for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
