Contracts

Often, during the course of construction work, circumstances arise which call for a change to the design, the scope of work, or the materials which the parties to the construction contract originally agreed to.

Commonly variations arise on account of unforeseen circumstances or requirements by third parties, in particular the relevant consent authorities. Otherwise, variations also arise when contract drawings are incorrect or incomplete, materials become difficult to obtain, and the owners request design changes.

It was the golfer Bobby Locke who coined the phrase “You drive for show, but putt for dough.” Like professional golfers, successful builders know how to finish. However, to reap the benefits of finishing it is important to get the contract admin right.

In a Nutshell

As a result of changes to the Home Building Act 1989 (NSW) (“the Act”) residential building work contracts entered into from 1 March 2015 must be compliant with new requirements introduced from that date.

Construction entails many risks to a builder by virtue of its occupation, control and/or ownership of the site. The risks include personal injury or death to persons and damage or destruction of property (including the contract works itself).

The new National Construction Code (NCC), incorporating the Building Code of Australia (BCA), was adopted on 1 May 2015. It is now accessible online for free, upon registration with the Australian Building Codes Board (ABCB).

Option agreements are an increasingly common means by which developers secure development sites. There is good reason for that, as they provide developers with flexibility and assist with managing cash flow and liability.

In a Nutshell

In the recent decision of Coles v Dorner &Ors [2015] QSC 224 a builder and homeowner were found to have infringed copyright in the construction of a home at Port Douglas and ordered to perform external works to the constructed home to remove certain architectural features.

The case is a timely reminder for builders of ramifications where copyright is infringed.

Many lift contractors maintain standard form terms and conditions which are out dated, have not kept pace with legislative changes and fail to recognise changing customer needs and procurement methods. Exclusion clauses and limitations of liability are a particular feature which require careful identification and risk management assessment.

A lesson in the need for letters of intent and/or license agreements for works in contract negotiation stage

In a Nutshell

Developers and builders should give careful consideration to entering into license agreements or letters of intent where pre-contractual works are performed or designs/plans are to be used while the parties are still negotiating the commercial terms of a design and construct contract.

Small Business Contracts that are standard form and which are entered into or varied after 12 November 2016 will be subject to new amendments under Australian Consumer Law.