An effective construction contract is the foundation of every successful project. At Troy Legal, we help principals, contractors, subcontractors, suppliers, project managers and consultants simplify complex agreements, allocate risk fairly and protect their commercial interests across the entire project lifecycle.
From project tendering through to service & maintenance and repair contracts, we assist construction clients across a wide range of commercial and infrastructure developments - ensuring to minimise risk, protect payment rights and minimise disputes.
Key features of effective construction contracts and their management are:
An effective construction contract clearly documents appropriate allocation of risk and outlines rights to payment for work performed. A sound risk profile provides certainty and enables both parties to manage project risk proactively without disrupting progress of the work.
Poorly apportioned risk - particularly when contractors are burdened with risks beyond their control - leads to increased project delays, disputes, and cost blowouts. For example, failure to provide contractors with a mechanism providing an entitlement to time and cost when site access is restricted or when unforeseen conditions arise (not able to be managed by the contractor) will likely serve to only exacerbate delays and escalate the dispute.
We assist clients to simplify construction contracts that strike a fair balance of risk. This includes allowing contractors to appropriate entitlements to time and cost for restrictions to site access, latent conditions, variations, and other risk events outside of their control. We also ensure the independent assessment function of the Superintendent or Principal’s Representative, supports effective risk management for principals, head contractors and subcontractors.
Once a construction contract is entered into, diligent project management and contract administration is critical to ensure overall project objectives are met.
This requires a full understanding of the contract terms with timely submission of contractual notices, claims and project reporting.
This, together with an appreciation and understanding of the intersection of relevant legislation (eg. BIF Act and QBCC Act), key contract terms need to be properly implemented to ensure effective contract administration and project management.
Any construction contract is limited in its effect to how its terms are managed and implemented in a given situation.
Obtaining early legal advice on the interpretation of key clauses and steps required for proper contract administration ensures protection of contractual rights and the operation of the contract as it was intended.
Disputes on construction projects are inevitable, which is why having a clear and concise dispute clause is a critical contractual risk mitigation step.
Adopting senior management meetings or mediation at first instance provides an early opportunity for key decision makers to negotiate a resolution cost-effectively.
Beyond that, expert determination is a further option for complex or technical issues to be fleshed out and resolved, without the formality of Court proceedings or Arbitration.
Not all disputes are suitable for expert determination (particularly those involving contractual or legislative interpretation). Pathways to other forms of dispute resolution such as litigation or arbitration are other options should early attempts at resolution fail. Using unamended dispute resolution clauses in Australian Standard Contracts (e.g. AS 4000, AS 4902, AS 2124 etc) is problematic. These unamended dispute clauses, despite being widely used in the construction industry in Australia, have been found by the Courts to be void for uncertainty and require amendment.
Amendment to the dispute clause is required to provide certainty to the parties. No party to a construction contract benefits from uncertainty, particularly when the parties are already in dispute.
Learn more about how we support clients through dispute resolution.
Payment mechanisms in construction contracts allow parties to manage and maintain cash flow. Providing a simple, clear and concise payment mechanism is the objective.
These mechanisms are the subject of specialist security of payment legislation across Australia, and the interplay between legislation and the payment clause should co-ordinate to ensure the certainty of payment rights for the parties.
Drafting payment clauses to align with BIF Act or SOP Act rights and QBCC Act rights is a simple fundamental step to provide certainty for the parties. Obtaining early legal advice on the interpretation of payment clauses and steps required for claiming or responding to payment claims under the contract is a useful step to ensure your contractual rights are preserved moving forward on the project.
Learn more about our services related to payment recovery.
Troy Legal advises on a full range of construction contract types, including:
Bespoke contracts (project-specific)
AS standard form contracts (AS4300/AS4000/AS4902)
Back-to-Back subcontracts
EPC and EPCM contracts
Fixed price contracts
Cost-plus contracts
Guaranteed maximum price contracts
Supply agreements
Service and Maintenance contracts
Development and joint venture agreements
Consultancy agreements
Hire agreements
Master Builders and industry-standard adapted contracts
We advise on a range of standard form contracts in the Australian construction industry, ensuring clients understand their obligations and risk exposure.
Inadequate or uncertain contract terms are a leading cause of disputes and delays. Troy Legal assists clients with identifying and managing issues such as:
Scope of works and variations claims
Extensions of time and delay costs claims
Liquidated damages and performance risk
Progress claims and payment schedules
Termination, suspension, and default clauses
Dispute resolution procedures
Navigating time bars
Advising in respect of related statutory and common law duties
We also represent clients to resolve contract disputes, providing specialist advice and management of adjudication, arbitration and litigation processes.
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As experienced construction contract lawyers in Brisbane, engaging Troy Legal early in your project allows us to structure contracts that reflect your commercial goals while complying with industry standards across the Australian construction industry. We assist with:
Legal review of construction contracts
Identification of contractual risks and negotiation and dispute resolution strategies
Drafting and amending collateral or back to back agreements
Ensuring consistency between the contract and relevant statutory obligations
Our advice is practical, precise, and geared towards preventing disputes before they arise.
For broader legal support on project delivery, see our Commercial Advice services.
