General Conditions of Contract

Clause 1 – Contract Work
The Contractor must carry out and complete the “work/s” in accordance with this Contract, including any plans and specifications, and as may be varied from time to time. The work may vary at any time, by agreement between the parties or by necessity. Any changes to work must be recorded in writing and treated as a variation under Clause 7. The Contractor may subcontract any part of the work without the Owner’s consent, however shall remain responsible for that work under the Contract.

Clause 2 – Contract Price
The Owner will pay the Contract Price in the manner specified in Schedule 3. The Contract Price is based upon information that is known to the Contractor as at the date of the Contract. The Contract Price may be adjusted after the date of this Contract and only in accordance with the provisions of this Contract. In cases where a variation is required, the Contractor must notify the Owner immediately and the change must be agreed to as a variation in accordance with Clause 7. If the variation exceeds 50% of the Contract Price, and the Owner is no longer able to meet the cost of the work due to the price increase, then the Owner must notify the Contractor immediately. The Owner has the right to then terminate this Contract by providing written notice to the Contractor within 7 days of receiving the notification of price increase. The Owner shall pay the Contractor in accordance with the Contractor’s payment terms for all work carried out and all reasonable costs incurred by the Contractor to date, as well as any materials on the work site. The Contract Price may change as permitted by Clauses 4, 7 and 8 of the Contract.

Clause 3 – Plans and Specifications
All plans and specifications for work to be carried out under this Contract, including any variations to those plans and specifications, are taken to form part of this Contract.

Clause 4 – Work Site
The Owner will arrange or allow access to the work site to enable the Contractor and any of its employees or subcontractors to carry out relevant investigations and work.

The Owner must do all work necessary to provide access to the site for vehicles and other equipment required by the Contractor to carry out the work, and the cost of providing such access to the site is included in the contract price.

The Contractor must bear all costs involved in the delivery of materials to the work, handling of materials, the removal and disposal from the site of rubbish, surplus material, excavated material, vegetation and demolished or dismantled structures.
The Contractor must allow the Owner, any person authorised by the Owner or an authorised officer of the lending authority, if any, access to the site to view and inspect the work in progress.

As the work site can be a dangerous place, the Owner will, without fail, comply immediately with any direction or request by the Contractor concerning access to the work site and safety.

The Owner will allow the Contractor to use the facilities at the work site including power, water, toilet and washing facilities to enable the work to be carried out. No monetary allowance or work has been included for the need to adjust any aspect of any existing structure for the purpose of carrying out the work. If such a situation arises it will be a variation – see Clause 7.
The Owner or the Owner’s representative must communicate and deal with the Contractor personally or with such person nominated by the Contractor as the Contractor’s authorised representative.

The Owner must not give directions to the Contractor’s employees or sub-Contractors.

Clause 5 – Commencement and Completion of Work
The Contractor must take all steps to proceed, commence and complete the work on the dates specified in Schedule 4, as may be varied under the Contact from time to time. Both parties must take all reasonable steps to minimise any delays to the work.
For the avoidance of doubt, the Contractor may, by written notice request that the Owner provide satisfactory evidence of the Owner’s title to the work site and capacity to pay the Contract Price. If requested, the Owner must provide such evidence to the Contractor within 10 business days from receiving such notice. If the Owner fails to provide such evidence within the allocated timeframe, then the Contractor may suspend the work under the Contract in accordance with Clause 15 or take action to end it in accordance with Clause 16.

The work will be complete when the Contractor has finished the work in accordance with the Contract, documents and Variations, it is free from defects and is capable of being used for its intended purpose, any damages are repaired and all rubbish and surplus is removed from the site. When the Contractor believes the work is complete, the Contractor must notify the Owner in writing. Within 5 business days from receiving that notification, the Owner must advise the Contractor in writing of any items of work the Owner considers to be incomplete or defective. If the Owner does not notify the Contractor, the work will be taken to be complete. The Contractor must complete any outstanding work promptly and again notify the Owner of its completion in writing.
If the Owner does not notify the Contractor in writing that any item is incomplete or defective within 5 business days from receipt of notification, then the work will be taken to be complete.

Clause 6 – Cooling Off Period
This contract may be subject to a cooling off period that entitles the Owner to rescind this contract by giving a notice in writing as required by Section 7BA of the Home Building Act for contracts over $20,000.

The notice of rescission must be given to the Contractor:

a. Where the Owner has been given a copy of the signed contract, at any time before the expiration of 5 clear business days after the Owner is provided a copy of the signed contract; or

b. Where the Owner has not been given a copy of the signed contract within 5 days after the contract has been signed – at any time before the expiration of 5 clear business days after the Owner becomes aware that the Owner is entitled to be given a copy of the signed contract.

The notice of rescission must state that the Owner rescinds the Contract, and must be provided to the Contractor in writing via the address shown as the Contractor’s address, or by any other means of service provided by Clause 18 of this contract.

If a notice of recission is given to the Contractor:

a. The Contract is taken to be rescinded from the time it was signed, subject to (b) and (c) below.

b. The Contractor may retain out of any money paid to the Contractor the amount of any reasonable out of pocket expenses that the Contractor incurred before the rescission.

c. The Contractor is entitled to be paid a reasonable price for any work carried out or materials purchased under the Contract to the date the notice of rescission is given.

Clause 7 – Variations
The work to be done or materials used under this contract may be subject to variation in instances where:

a. The Owner has requested it; or

b. The Contractor has requested it. If the necessity for the variation is due to the fault of the Contractor the Owner will not be liable for an increase in the contract price; or

c. Other matters occur that could not reasonably have been expected or foreseen by an experienced, competent, and skilled Contractor for the completion of work at the date of the contract; or

d. There is a requirement of a council or other statutory authority relating to the work that the Contractor did not foresee as at the date of the contract.

Any agreement to vary this contract, or to vary the plans specifications for work to be done under this Contract, must be in writing and signed by or on behalf of each party to this Contract. Any adjustment to the Contract price due to an agreed variation will be considered at the time of the next progress payment or paid as agreed between the parties. When the work is varied or changed, the amount payable for GST will be adjusted in accordance with the work that has been varied or changed.

Variation involving additional work
For variations involving additional work, the price will be as agreed between the parties. In the absence of an agreed price, the amount payable because of the variation will be determined by the actual cost of material and labour involved plus, in all cases, a margin to the Contractor to cover supervision, profit and overhead.

Variation involving less work
For variations involving less work to be carried out by the Contractor, the cost of work now not required to be done plus any materials already purchased for the work to be carried out are to be deducted from the Contract Price after consultation with the Contractor. The cost in this case means the actual expense or amount saved by the Contractor because of work not being carried out or required to be done. No other deduction will be required.

Clause 8 – Payment for work

The Owner must pay the Contract Price to the Contractor either up front or by progress payments in the manner specified in Schedule 3.

The initial payment must not exceed 10% for work up to $20,000 or 5-10% for work greater than $20,000. The Contractor must notify the Owner in writing when a stage of the work has reached completion. A stage of work has reached completion when it has been finished in accordance with the contract documents and any variations agreed to and there are no omissions or defects that prevent that stage of the work from being reasonably capable of being used for its intended purpose. For progress payments, the Owner must make those payments within 5 business days from the date when the applicable stage of the work is reached as set out in the payment schedule.

If the Owner disagrees that the Contractor is entitled to be paid a progress claim or other amount due under the Contract, the Owner must notify the Contractor in writing within 5 business days of receiving the claim, and set out the reasons for that disagreement. If there is any dispute, then this is to be resolved in accordance with the dispute resolution procedure outlined in Clause 17.

If the Owner fails to pay the amount of a claim in part or in full by the due date and fails to give notice disputing the claim to the Contractor, 10% interest will be payable to the Contractor on the amount outstanding for the period overdue. However if the Owner gives notice of a dispute in accordance with the dispute resolution clause, interest will only be payable if the dispute is resolved in favour of the Contractor and shall be calculated from the time when payment would have otherwise been due. If payment is not made on time, then the Contractor reserves the right to stop all works until such time as payment is made or any dispute is resolved. The date for the completion of work will therefore be adjusted in line with the period of suspension.

Clause 9 – Final Payment
When the work is complete in accordance with Clause 5, the Owner must pay the amount remaining unpaid under the contract. Payment must be made in the manner specified in Clause 8. If the amount is not paid, interest in accordance with Clause 8 applies.

On receipt of the final payment, the Contractor must hand over to the Owner all guarantees, instruction manuals and the like unless already provided and all keys relating to the work, together with any certification or approval which may have been provided by any public authority relating to the work.

Clause 10 – Insurance, loss, damage and injury
Contractor responsibilities
The Contractor must have in place all necessary insurances prior to carrying out any works.
The statutory warranty period for major defects is six years, and two years for all other defects.

Owners responsibilities
The Owner accepts responsibly for insuring against loss and damage to the Owner’s property and goods whilst the work is in progress. The Owner indemnifies the Contractor against all liability or claims in respect of damage to the work site or to a moveable property left at the site during the carrying out of the work which is not caused due to the fault of the Contractor.
Should the Owner engage in another contractor that has not been engaged by the Contractor for the same works, as specified in the detailed Quote, then warranty insurance for the works being carried out as stated in this Contract will be voided.

Clause 11 – Extension of time
Both parties acknowledge that delays may be caused by variations to this contract or work or other matters beyond the reasonable control of the Contractor or Owner. In any such case the Contractor will be entitled to a reasonable extension of time to complete the work. The construction end date will be adjusted accordingly.
If the Contractor wishes to claim an extension of time, the Contractor must notify the Owner in writing of the cause and estimated length of the delay within 5 business days of the occurrence of the event or, in the case of a variation, from the date of agreement to the variation. The Owner must notify the Contractor in writing if the extension of time is unreasonable, within 5 days from receiving the request. Should this not occur, the completion date of the Contract will be extended by the period notified to the Owner. Similarly, the Owner must not cause unnecessary delays whether due to the Owner not purchasing items in a timely manner or any other reason within their control.

Clause 12 – Statutory Warranties
All work done under this Contract will comply with the Building Code of Australia including any regulation or other instrument made under that Act, all other relevant codes, standards and specifications that the work is required to comply with under any law and the conditions of any relevant development consent or complying development certificate.

The Contractor will supply all materials necessary for the work to be completed of the kind and quality stated in the plans and/or specifications. This Contract limits the liability of the Contractor for failure to comply with the paragraph above if the failure relates solely to:

a. A design or specification prepared by or on behalf of the Owner (but not by or on the behalf of the Contractor); or
b. A design or specification required by the Owner if the Contractor has advised the Owner in writing that the design or specification contravenes (a) above.

If the work to be carried out consists of the construction of a dwelling or alterations, additions of the dwelling or the repair, renovation, decoration or protective treatment of a dwelling, the work must be reasonably fit for occupation as a dwelling. The Contractor warrants that the work and any materials used in doing the work will be reasonably fit for the specific purpose or result.

Clause 13 – Termination due to unforeseen matters
If the work must be varied due to a matter that could not reasonably be expected to be necessary for the completion of the work or a requirement of the council or other statutory authority which was not known at the date of this contract and the Owner notified the Contractor in writing that the Owner is unable to meet the cost of that variation, then the Owner will be entitled to terminate the contract by notice in writing to the Contractor in accordance with Clause 18.

If the contract is so terminated, the Contractor is entitled to payment:

a. in accordance with Schedule 3 in respect of completed stages
b. for the actual cost of the work done since the completion of the last stage, and for any materials on the site plus GST
c. for the cost of the building cover contract relating to the work done where that cost has not already been paid by the Owner.

Clause 14 – Defects rectification
Should there be any defects or omissions identified within 13 weeks from the date the work is completed (in accordance with Clause 5), then the Owner must notify the Contractor in writing of the matter or thing by no later than 5 business days after the date of expiry of the 13 week period. The Owner must allow the Contractor reasonable time to access the work site to review and assess the matter/s of concern.

If there is a dispute between the parties as to whether any item of work is defective, has been omitted or has been satisfactorily rectified, the dispute must be dealt with initially in accordance with Clause 16 (dispute resolution). The Contractor shall be allowed to carry out any work for which the Contractor is responsible. The Contractor will be responsible for determining how such work is carried out.

The Owner is required to maintain the works properly and adequately. The Contractor is not obliged to carry out work where the need for the work is due to the failure by the Owner to do so, or is due to fair wear and tear caused by use of the works, misuse of the works, the environment in which the works are situated or where the same related to a matter or thing not forming part of the work. The Contractor is not responsible for things such as damage or shrinkage caused by the work being exposed to prolonged periods of sunlight or heat, or for variances in the colour or grain of natural materials. Defects due to natural disasters or general building/land movement is not covered.

Clause 15 – Suspension of work by Contractor
If the Owner, without reasonable and substantial cause:

a. fails to provide satisfactory evidence of title to the land and/or capacity to pay the contract price, including any variations
b. fails to pay a progress payment or any other amount due to the Contractor within the time allowed, but only if the Owner fails to pay the progress payment or other amount due after a written notice from the Contractor requiring payment within a further period of 5 business days
c. fails to advise the Contractor promptly of any requirement of or notice from a statutory authority or the lending authority, if any, that affects the work
d. fails to perform any work or supply materials as specified in Schedule 5 which prevents the Contractor from continuing with the work under the contract
e. denies the Contractor or the Contractor’s sub-Contractors access to the site so as to prevent the work from proceeding, or otherwise prevents the Contractor from carrying on the work, or if the Owner becomes bankrupt, assigns assets for the benefit of creditors generally, makes a composition or other arrangement with creditors or, if the Owner is a company, goes into liquidation or receivership or is otherwise without full capacity, the Contractor may suspend the work by giving written notice to the Owner specifying the reason.

Clause 16 – Termination
Due to the fault of the Contractor
If the Contractor is unable or unwilling to complete the work, abandons the work, suspends the work before completion without reasonable cause, becomes bankrupt, goes into liquidation or receivership or is otherwise without full capacity, fails to diligently proceed with the work or fails to remedy defective work or remove faulty of unsuitable material, without reasonable cause fails to comply with an order or direction of a public authority with respect to incomplete or defective work, which would substantially affect the quality or progress of the work, the Owner may notify the Contractor in writing and give them 21 days to remedy the default. If the default is not remedied within the time allowed, then the Owner may terminate the contract by giving written notice to the Contractor.

Other than due to the fault of the Contractor
The Owner may also terminate the contract by notice in writing to the Contractor in the following circumstances:

a. if the Owner, within the cooling off period, does not wish to proceed with the contract (general conditions of contract)
b. if all necessary approvals for the work have not been obtained within 60 business days of the date of the contract, or
c. if the Owner is unable to meet the cost of a variation due to a matter that could not reasonably be expected to be necessary for the completion of the work or a requirement of the council or other statutory authority. A notice required under this clause must be given. If the Owner ends the contract in the above circumstance, the Contractor may remove from the site and retain all installed or unfixed materials, fittings and equipment supplied by the Contractor

Due to the fault of the Owner
If the Owner:

a. fails to provide satisfactory evidence of title to the land or capacity to pay the contract price including any variations
b. fails to pay a progress payment or other amount due under the contract
c. becomes bankrupt, assigns assets for the benefit of creditors generally, makes a composition or other arrangement with creditors or, if the Owner is a company, goes into liquidation or receivership or is otherwise without full capacity
d. denies access to the site to the Contractor, the Contractor’s employees or sub-Contractors so as to prevent the work from proceeding
e. fails to perform any work or supply materials as specified in Schedule 5 which prevents the Contractor from continuing with the work under the contract or otherwise obstructs the Contractor from performing the work
f. fails to rectify a cause of suspension under Clause 15 within the time specified in Clause 15, or
g. without the consent of the Contractor prior to completion of the work enters into occupation or otherwise obstructs the Contractor from performing the work,

the Contractor may, where such default can be remedied, notify the Owner in writing that unless the default is remedied within 10 business days or such longer period as specified the Contractor will terminate the contract.

Unless the Owner complies with the Contractor’s request within the time allowed, or if the default cannot be remedied, the Contractor may terminate the contract by giving written notice to this effect to the Owner.

If the Contractor terminates the contract under this clause, the Contractor may remove from the site and retain all installed or unfixed materials, fittings and equipment supplied by the Contractor and will be entitled to recover all losses and expenses arising from the termination of the contract or to offset such amounts from any amount due to the Owner.

Clause 17 – Dispute resolution
If the Owner or Contractor considers that a dispute has arisen in relation to any matter covered by this Contract, either during the progress of the work, after the completion of the work or after the Contract has been terminated, that person must promptly give to the other party written notice of the matter(s) in dispute. The parties must meet at least once and within ten (10) days to attempt to resolve the dispute. Each party must be represented by someone having authority to settle the dispute.

The Guide to Standards and Tolerances 2007 shall be used as a reference in any dispute regarding the quality of work by the Contractor including by not limited to any alleged defective, incomplete or sub quality work. Both parties must act reasonably when dealing with any issue in dispute.

Clause 18 – Notice
Any notices by one part to the other must be in writing and identify in sufficient detail, supported by relevant documents or reports, the purpose of and outcome required by the notice. Any notice or claim must be given or served by one party to the other by either personally handing it to the other party, leaving it with a person, apparently over the age of 16, at the other party’s address, by sending it by registered post to the party’s address or by sending it via email to the party’s listed email address.

Definitions
In the printed general conditions of contract

a. words imparting the singular include the plural and vice versa.
b. a reference to the male gender includes the female and a reference to a person includes a partnership and a company.
c. the current bank rate is the Commonwealth Bank Overdraft Index Rate as published from time to time plus 2% per annum.
d. ‘Lending authority’ means a bank, building society or other financial institution which lends the Owner the contract price or any portion of that amount.
e. ‘GST’ means Goods & Services Tax – a tax levied by the Federal Government on the supply of goods and services.
f. ‘Building cover contract’ has the meaning given by subclause 1(1) of Schedule 1 of the Home Building Act 1989.
g. ‘Business day’ means any day other than a Saturday, Sunday, public holiday or 27, 28, 29, 30 or 31 December.
h. a reference to ‘include’ or ‘including’ or ‘for example’ in a list means that items not listed may be included.
i. a reference to any legislation includes any statutory modification, re-enactment, substitution and any subordinate legislation issued under that legislation.
j. a reference to any party includes that party’s executors, administrators, successors and permitted assigns.
k. a provision of or a right created under this contract may not be: (i) waived, except in writing signed by the party granting the waiver, or
l. (ii) varied, except in writing signed by the parties.
m. the rights, powers and remedies provided in this contract are cumulative with, and are not exclusive of, the rights.