CALL US NOW

Call now to speak to one of our Lawyers and satisfy yourself that we are the right Lawyers for you.

Call now on 02 4952 3901.

Cyber safety and domestic violence: Tips for staying safe online

Recently there has been a lot of press and coverage regarding Snapchat's most recent upgrade which has a map/location function. And quite frankly it terrifies me. You may not be aware but many of the apps on your phone have a location tool, which can be great when you need to know which restaurant is near you or how far the nearest fuel is...

Read More ...

What are the implications of not documenting an informal property settlement?

If you decide to informally document your property settlement you should be aware that your former partner can change their mind and apply to the Court for a property settlement that is different to the one agreed to. If your partner's financial circumstances change, for example, they are diagnosed with an illness or they are no longer ab...

Read More ...

2014 Security of Payment Act Amendments - What's New?


The Building and Construction Industry Security of Payment Amendment Act (NSW) 2013 ('the Amendment Act') contains important amendments to the Building and Construction Industry Security of Payment Act (NSW) 1999 ('the Act'). The Amendment Act will apply to all Construction Contracts entered into from 21 April 2014. ...

Read More ...

Testamentary Capacity. When does a person lack the ability to make a valid Will?

What is "testamentary capacity"? The legal test for assessing testamentary capacity was outlined almost 150 years ago in a case called Banks v Goodfellow (1870) LR QB 549. The test has four (4) aspects to it, namely: 1. That the willmaker understands the nature of the act of making a Will and its effects, 2. That the wil...

Read More ...

Articles via RSS rss

Common Misconceptions about Contracting in the Building & Construction Industry.

Written on the 6 June 2017 by Amanda Crosbie

...what to do to avoid getting caught out.

When I ask clients whether a written contract was in place or whether variations had been documented, too often I receive the following response "no there was no contract, we just agreed to it" or "I didn't think it was necessary it was a small job".

 

Firstly, it is an incorrect assumption that just because an agreement is verbal, that there is not a binding contract in place.  A contract can be verbal unless it relates to an interest in land or there is a statutory requirement that it be in writing, for example, a contract for "residential building works" where the value of the works is at least $5,000.00.

 

Secondly, whilst a contract can be verbal, regardless of the size of the job, all agreements, including variations, should be formally documented. This simple step can prevent many disputes and reduce a significant number of risks associated with carrying on a business.

 

A formal written contract can provide parties with the ability to:

  1. Confirm the agreed scope of works and any exclusions,
  2. Identify the correct contracting parties, so there is no issue as to which person company or trust a contract is with,
  3. Obtain payment of a deposit depending on the risk of the particular client,
  4. Stipulate when a variation will arise and how it will be priced,
  5. Dictate timeframes to complete various stages or scope of works,
  6. Create Reference Dates under the Building & Construction Security of Payment Act,
  7. Specify payment terms,
  8. Recover interest should payment terms be breached,
  9. Collect legal and debt collection costs in circumstances where a customer breaches payment terms,
  10. Obtain personal guarantees or other security for payment,
  11. Limit liability,
  12. Exclude liability for consequential loss,
  13. Suspend work, and
  14. Terminate the contract in certain circumstances.

 

The other common misconception with contracts in the building and construction industry is that terms and conditions on an invoice will form part of a contract for works completed. Once a contract is formed, which occurs usually when a written or verbal quotation is accepted, the terms of the contract cannot be altered without the consent from both parties.  As such, terms on an invoice will not form part of the contract unless those terms had already been agreed at the time of the contract formation, for example, the acceptance of a quotation.

 

Further, by not having a written contract which specifies an agreed price for the works, or clauses that set out how the works will be quantified by way of hourly rates etc, then a contractor is left only with a "quantum meruit" claim if the other party fails or refuses to pay their invoice.

 

A quantum meruit claim is a claim for payment of reasonable remuneration for work undertaken that cannot be recovered under an enforceable contract. This means that the contractor would, at best, be entitled to the reasonable market costs of the work undertaken, regardless of what the contractor's assert was its actual or agreed costs for the works. Such claims come with risks. 

 

All contractors in the building and construction industry should engage the assistance of Solicitors experienced in the building and construction industry to prepare proper contract documents and insist on those documents being signed prior to works being undertaken. This can include customised contracts for large projects or standard form contracts for everyday contracting.

 

The initial expense and effort is minor when compared to the stress and costs of litigation should a dispute arise between the parties.  There are always risks associated with running a business, however, these risks are reduced when proper contracts are in place.

 

Please do not hesitate to contact our office should you have any questions with respect to the drafting and preparation of a once off or standard form contract documents.

 

There are strict laws and regulations surrounding the Home Building Industry and you should seek advice on the requirements with respect to Contracting under the Home Building Act.

 

Need an Answer Fast?

 

 

How we help

Roberts Legal offers a no obligation initial telephone consultation for new enquiries, and encourages potential clients to pick up the phone in order to seek assistance if they are in any doubt about whether or not they have complied with the specific terms of the Act

 

Our Building & Construction Lawyers

Sam Robert

Accredited Specialist (Commercial Litigation)

Matthew Bryan

Special Counsel

Felicity Donald

Senior Associate Solicitor

Amanda Crosbie

Associate Solicitor

 


Author: Amanda Crosbie
About: Amanda is committed to working with her clients to deliver clear and concise advice and obtain the best possible outcome in all matters. She comes at her matters with a commercial approach.
CONTACT US ON 02 4952 3901

© Roberts Legal 2013. Designed by Graphika.

FacebookLinkedInTwitter