Home Building Contracts and Review

10 March 2022 in Building and Construction Law

What are Building Contracts?

A building contract is a contract which relates to a building or construction project.  Building contracts typically contain provisions relating to the labour and materials necessary to complete a construction project.  The nature, complexity and number of building contracts entered into by parties will depend on the type of construction project that is being completed. Factors that that influence building contracts provisions include the scale of the project, the number of parties involved and the estimated time of completion.

Building contracts are legally binding agreements that create rights and obligations for all parties.  Written building contracts help ensure that all parties to a project clearly understand their rights and obligations and allows the agreement to be more easily enforceable.  Building contracts are useful for projects ranging from the construction of a home to the construction of large-scale infrastructure.

Not having a clear and effectively written building contract in place can create legal problems and may lead to disputes between the parties.

What are the Common Forms of Building Contracts?

Small Jobs Contracts

A small building job on a residential building requires a contract to be in place if the work ranges between $5,000 and $20,000.

Fixed Price or Lump Sum Contracts

These titles refer to the same type of contract.  It is one where the contract clearly defines both the building work to be done and the cost of that work.  This allows parties to agree on a fixed price.

Cost plus Contracts

A cost plus building contract allows the contractor to be paid for the costs of completing the relevant work.  This allows a contractor to recover costs associated with wages, subcontractors and materials used plus allows a certain amount of profit. This type of contract is useful when the exact nature or price of a building project cannot be determined.

How can the lawyers at BSM help me

Meticulous and Individualised Contract Drafting

Many disputes in construction occur because of poor contract drafting.  It is  important to have a lawyer negotiate prior to the drafting of the contract to ensure the removal of unreasonable risks, that you have adequate control over the building process and that there are no unexpected price variations.

There are multiple standard forms such as those produced by Housing Industry Association (HIA) and Australian Standards (AS).  Our lawyers are familiar with these standard forms and can provide you with clear advice and relevant amendments.  We can clearly explain the legal terms and repercussions to you and negotiate with other parties and their legal representatives.

Review of Contracts

BSM building and construction lawyers will independently review your contract, no matter where it was drafted.  Changes and additions can be inserted anytime prior to the signing of contracts.  We can negotiate with the other party to ensure necessary amendments are made.  These necessary amendments may include the timing of progress payments, the inclusion of liquidated damages, control of the building schedule and approval of all variations.  We will identify and alert you of any unusual clauses in the contract that may cause problems and additional  expense for you in the future.

Administration Advice

Once the contract has been drafted, amended, agreed to by all parties and executed, it will need to be well administered.  Issues that may arise include variations, delays, extension of time, payment claims, requests for information, insurance matters, corporate and director disputes and defective works.  We are happy to advise and assist with all of these matters.

Extensive Experience at all levels of Construction

Brander Smith McKnight has over 40 combined years of experience and have worked extensively at all levels of construction, including residential buildings, multi-dwelling buildings, commercial and infrastructure.

Dispute Resolution

Disputes in the building industry are reasonably common and include disputes in relation to defective building work,, variations, delays and payments.  We resolve at least 75% of disputes without the need for costly litigation.  There are many different ways to resolve disputes and we work hard to find practical and commercially advantageous solution.  We can advise and act for you across all forms of alternative dispute resolution including negotiation, mediation, conciliation, expert determination and arbitration.  Our lawyers pride themselves on their ability to settle most disputes purely through negotiation, thus saving you legal fees.

We are conveniently located in Sutherland, Parramatta, Wollongong and Sydney CBD.