Choosing the Right Contract

When working with contractors, it is crucial to have a well-drafted contract that protects your interests. In the Cappello case, the homeowner had entered into a standard form Housing Industry Association (HIA) NSW Residential Building Contract for Works on a Cost Plus Basis. While standard forms can be convenient, they may not always provide adequate protection for your specific project.

As a homeowner, you should consider having a lawyer review the contract to ensure it adequately addresses your needs.

Adhering to Contractual Obligations

It is important to ensure that both parties adhere to the contractual obligations set out in the contract. In the Cappello case, the contractor terminated the contract due to non-payment of an invoice, and the homeowner disputed the termination. It is crucial to keep records of payments and ensure that all invoices are paid on time.

If there is a dispute, it is important to address it in accordance with the dispute resolution process set out in the contract.

Claiming Damages

In the Cappello case, the homeowner claimed damages for the decrease in the value of their property due to the delay in completion of the construction work. However, the court found that the homeowner did not meet the test for general damages that applies for breach of contract. Therefore, they were only entitled to the liquidated damages of $1 per day for each working day of delay that the parties included in the contract.

As a homeowner, you should carefully consider the amount agreed upon for liquidated damages and ensure it adequately covers any potential damages that may arise due to construction delays.


In conclusion, don’t let a lack of preparation or legal expertise compromise the success of your construction project. Protect your interests and ensure a smooth renovation process by taking proactive steps such as choosing the right contract, adhering to obligations, and considering damages claims. Contracts Specialist is here to help you navigate the legal complexities of construction projects and protect your rights as a homeowner. Contact us today to learn how we can help you safeguard your interests during your renovation project.