Building and Construction Contracts in Australia

When I was in practice and advising on building and construction contracts, I lamented the lack of a practical handbook directed at the practitioner which included useful precedents at an accessible cost. It’s a very difficult area. You have to forget everything you’ve learned about contract law. Forget about certainty of terms, in particular. Forget about fixed payment in respect of fixed performance of fixed promises. Forget about fixed times.

In most construction contracts there is no fixed definition of the exact nature of the works, let alone their timing, their costing or their implementation. And yet, construction contracts are written every day of the week for projects large and small, projects which seem to run to some sort of schedule with some sort of payment plan and achieve … well, something like they were meant to achieve.

In my Building and Construction Contracts in Australia – a Practical Handbook with Selected Precedents, which is now available at Smokeball, I’ve attempted to explain how modern construction contracts are put together and how they provide a framework for managing complex projects with many different actors where input levels, prices, times and conditions can be estimated but not fixed in advance due to a range of conditions – some natural, some bureaucratic, some because half way through a change is needed in design for reasons ranging from structural to aesthetic, some because of currency fluctuations or sudden price rises in particular commodities. My methodology, especially when dealing with extensions of time clauses, has been to start with decided cases and work backwards to establish a contractual provision which would not have excited litigation.

I’ve tried to avoid the pitfalls I saw clients of mine in when, whether as builders, sub-contractors or owners, contracts entered into, often without the benefit of legal advice, had bound them to non-commercial terms and were therefore of little assistance when their project encountered delays, cost blow-outs or other difficulties.

There are three parts to the detailed appendix, not because you’ll necessarily need to draft anything so complex but so that if you do encounter specifications in documents presented to you by your client, you can safely and honestly say to your client that you’ve seen one before. I’ve worked for clients who have sued builders for having the roof at the wrong pitch and using the wrong glue on the bathroom tiles…. If these matters are critical, write them down, and if the other side has written them down, presume – as I’ve tried to demonstrate with the sample noise provisions- that they are critical.

In this area of law more than possibly any other, the proper construction of a contract to take into account anything which a survey of decided cases tells you might even have a faint hope of going wrong will be the “ounce of prevention” … or to mix metaphors totally, in drafting contracts remember the 7P rule. Prior Planning and Preparation Prevents Palpably Poor Performance.

For those truly concerned about protecting their clients, particularly given the propensity of some firms to sue everything in site if there’s a whiff of a public liability claim, it also contains some very useful building-site health and safety documents.

I wanted an accessible, low-cost, user-friendly guide with some handy precedents. I couldn’t find one in the market-place, so I negotiated with my publisher… and then I wrote one. It’s priced so that you’ll make your money back with the first building contract you write.

To view Construction Contracts in Australia – A Practical Guide,  click here.

By Yaakov Gorr