1) Commencement of Work
The commencement of work clause sets out the specific date when building works will begin. This seemingly simple provision has significant implications for other critical contract matters including payment schedules, completion timelines, and extension of time claims.
What it does:Establishes the official start date of the building works under the contract.
Why it's important:The commencement date triggers payment obligations, sets the baseline for calculating the building period, and determines when the builder's contractual obligations begin. Under Home Building Act 1989 requirements, the commencement date must be clearly specified in all NSW residential building contracts over $5,000. An unclear or undefined commencement date can lead to disputes about delays, payment timing, and practical completion.
Essential risks minimised:- Time: Establishes clear timeline baseline for project duration
- Cost: Triggers payment schedule and prevents disputes about when payments become due
Ensure the commencement date is clearly defined and realistic. Consider including provisions for what constitutes "commencement" (site establishment, first delivery of materials, or first physical construction). Include notice requirements if the commencement date needs to change.
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