Importance of Construction Contracts

As experts in construction law, Contract Specialist understands the importance of construction contracts. We can you help understand and enforce your rights on your contract.

Why are construction contracts important? And what are the things that clients need to look out in potentially bad contracts?

A Construction Contract Agreement is a written document that contains everything that is agreed upon by both of the homeowner and the contractor. It carefully outlines the terms and conditions of the agreement, the rights of both parties, the amount to be paid, the date of commencement of the work, and the expected date of completion. As experts in construction law, Contracts Specialist understands the importance of construction contracts.

It is vital to have a well-written contract if you are to have any type of construction work done, because:

A

The Home Building Act requires it.

B

It protects the rights of both the owners and contractors.

C

It makes sure that the owner’s plans and conditions are laid out clearly.

D

It ensures that owners and contractors alike are working in the same direction and the same goal.

What is the Home Building Act?

The Home Building Act 1989 is the law that regulates the residential building industry and certain specialist work in NSW. Its main concerns are home building works such as construction, renovation, and alteration. It also regulates matters such as insurance, contractor licenses, contract prices, warranties for contractors and consumers, etc.

Who benefits from the Home Building Act?

Homeowners primarily benefit from the Act. But since it provides rules for stakeholders, we can say that the Act benefits everyone in the building and construction industry.

Clear guidelines make for better construction contracts. Amendments have also been made to the legislation to add more appropriate protection for traders and builders.The changes made required homeowners to act promptly and immediately lodge complaints when defects are discovered.

What are other acts/regulations under the Home Building Act?

Other acts and regulations under the Home Building Act include the Home Building Regulation 2014, Civil and Administrative Tribunal Act 2013 (NSW) and the Civil and Administrative Rules 2014.

Common Issues that arise in Building Disputes:

Are the issues (mentioned above) subject to the Home Building Act?

Yes, but these issues are also governed and can also be addressed by the building contract.

Bad Contracts and Red Flags to look out for

How do you spot a bad contract?

A poorly-written contract is equivalent to a breach of the law. If you are about to sign a contract, you must look our for these red flags!

What to consider before signing a Home Building Contract: A Checklist

Always check that the builder is licenced: the builder’s name must be consistent with the name in the builder’s licence.
The agreed dates of commencement and completion stated in the contract. Calculate if necessary, especially because delays may occur during the building process.
A clearly defined scope of the works stated in the contract. This must be agreed upon by the parties to ensure accountability.
The agreed contract price stated clearly and prominently.
The party responsible for certain defects is clearly identified and stated in the contract.
Any risks that may be encountered during the building process must be addressed by the contract.
Ensure that there is a clearly stated progress payment method.
The party responsible for council approvals and building permits should also be agreed upon and identified in the contract.
Documentation may also be an important practice for both homeowners and contractors, especially when there is a potential building dispute about to arise.

Communication is key

A common issue that leads to building disputes is poor communication or miscommunication. Constant communication between owners and contractors allows the parties to avoid issues that may lead to legal conflicts.

In other words, having a well-written contract is usually a sign of good communication between the parties.

What Contracts Specialist can do for you

The specialist building and construction lawyers of Contracts Specialist have extensive experience in drafting and reviewing a wide range of contracts for our clients – both contractors and homeowners – such as Home Building, Commercial, Lump Sum, and Cost Plus contracts, as well as Subcontract Agreements. We know the importance of construction contracts and how they can affect a homeowner’s investment and a contractor or builder’s business.

Consult with our contract specialists so you can get some peace of mind. Having a good contract at the start of a construction project is vital to its success. Before signing anything make sure that everything written in the construction contract agreement will be in your best interest. Our construction lawyers can give you confidence before you go into any agreement and we can ensure that well-crafted contracts will help protect you should any legal issues and building disputes come up in the future.

Call Contracts Specialist for a free first consult. It will cost you nothing to know where you stand legally.

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Contracts Specialist is a Sydney-based construction law firm that deals with Building Disputes, Construction Contracts, Debt Recovery, and Security of Payment. With Contracts Specialist, you are ensured that you are in good hands.