A lease of chattels is a contract, so it is created in accordance with the general principles of contract. As soon as the essential elements of the transaction have been agreed, the lease is effective. Unlike a lease of land, there is no need for any special formalities. In particular, a lease of chattels does not have to be in writing to be valid.
As a chattels lease is a contract, the parties are free to negotiate their own terms. In some circumstances, the law fills gaps in the contract if the parties have not included certain terms. For example, the common law implies into a chattel lease that it is the lessee's responsibility to return the property to the lessor.
Because they involve a supply of goods, hire contracts are also regulated by some parts of the Australian Consumer Law. This includes guarantees regarding acceptable quality (s 54), fitness for purpose (s 55), undisturbed possession (s 52), good title (s 53), and correspondence with samples (s 57). These implied guarantees cannot be excluded by agreement.