Fill - Free fillable Home Building Contract More-than-$20,000 (New South Wales) PDF form

Home building contract

for work over $20,000

Legislation obliges a contractor to give a copy of the Consumer Building Guide

to consumers before entering into a home building contract.

www.fairtrading.nsw.gov.au

This contract and Consumer Building Guide comply with the requirements of the Home

Building Act 1989. Both can be viewed or printed from our website at

www.fairtrading.nsw.gov.au

This contract is recommended for home building work over $20,000 such as new homes,

large additions and residential swimming pool installations or tradework which exceeds

$20,000.

For home building work over $5000 and up to the value of $20,000, such as minor

additions, repairs, improvements or tradework, like electrical, plumbing, carpentry or

brickwork the NSW Fair Trading Home Building Contract for work over $5,000 and up to

$20,000 should be used.

Fair Trading recommends that both parties seek independent legal advice prior to

entering into a home building contract or reducing, restricting or removing any contract

term recommended by NSW Fair Trading.

You must obtain permission from NSW Fair Trading if you wish to copy this Home building

contract other than downloading, printing or distributing it in order to use it as intended as

a home building contract.

Revised November 2020

Index

This contract starts here ....................................1

Checklist for owners entering building contracts

..................2

Owner and Contractor details

................................3

Clause 1 Contract documents .............................5

Clause 2 Quality of construction ...........................6

Clause 3 General conditions of contract .....................6

Clause 4 Deposit .......................................8

Clause 5 Commencement of work ..........................8

Clause 6 Time for completion ..............................9

Clause 7 Extension of time ...............................9

Clause 8 Completion of work .............................10

Clause 9 Statutory warranties ............................10

Clause 10 Provisional sums .............................. 11

Clause 11 Prime cost items schedule .......................12

Clause 12 Progress payments .............................13

Clause 13 Variations ....................................14

Clause 14 Time for payment ..............................15

Clause 15 Final payment .................................16

Clause 16 Work done and/or materials supplied by owner .......16

Clause 17 Approvals ....................................17

Clause 18 Compliance with requirements

of local and statutory authorities

...................17

Clause 19 Access to site and materials handling ...............18

Clause 20 Identifying the site .............................18

Clause 21 Assignment and sub-contracting ...................18

Clause 22 Insurance ....................................19

Clause 23 Defects rectication .............................20

Clause 24 Suspension of work by contractor .................. 20

Clause 25 Termination of contract by owner ..................21

Clause 26 Termination of contract by contractor ...............22

Clause 27 Disputes .....................................23

Clause 28 Giving of notices ..............................23

Clause 29 Copyright .....................................24

Clause 30 Denitions ...................................24

Consumer Building Guide . ...............

..................25

Record of adjustments and variations .........................28

Payments made . ........................................29

1 of 2

This contract starts here

Introduction

Before signing, the owner should carefully go through all of the items in the checklist overleaf. If you answer

‘no’ to any of the questions in the checklist you may not be ready to sign the contract. Both parties should

take time to read and understand all the contract documents.

This contract should have been available to both parties in sufcient time to allow for reading and for advice

to be obtained if necessary, prior to signature.

References to costs and prices throughout the contract are inclusive of GST where applicable (Goods and

Services Tax levied by the Federal Government).

Note: In this contract:

Signatures

Do not sign this contract unless you have read and understand the clauses as well as the notes and

explanations contained in this document. It is always advisable to seek independent legal advice before

signing a contract.

Refers to explanatory notes of

primary interest to contractors.

Refers to explanatory notes

of primary interest to owners.

Warning: The contract price

may increase in accordance with

the contract terms. This is because

not all costs can be absolutely

determined at the outset although

the contractor is obliged to make

reasonable estimates given known

conditions. The reasons for possible

increases include:

• Increase in taxes,

eg. GST (Clause 3)

• Provisional Sums (Clause 10)

• Prime Cost Items (Clause 11)

• Variations and price adjustments,

including those due to

unforeseen matters or required

by council (Clause 13)

• Interest on overdue payments

(Clause 14)

• Boundary Survey (Clause 20).

Note: Where the owner

or the contractor is a company

or partnership or the contract is

to be signed by an authorised

agent of the owner, the capacity

of the person signing the contract,

eg. director, must be inserted.

Contract price

(including GST)

Amount in words

Owner’s

signature

Name (print)

Date

Owner’s

signature

Name (print)

Date

Contractor’s

signature

Name (print)

Date

0.00

2 of 29

Checklist for owners entering building contracts

Have you checked that contractor holds a current contractor licence? Yes

Does the licence cover the type of work included in the contract? Yes

Is the name and number on the contractor’s licence the same as on the

contract?

Yes

Is the work to be undertaken covered in the contract, drawings or

specication?

Yes

Does the contract clearly state a contract price or contain a warning that

the contract price is not known?

Yes

If the contract price may be varied, is there a warning and an explanation

about how it may be varied?

Yes

Are you aware of the cooling-off provisions relating to the contract? Yes

Is the deposit within the legal limit of 10%? Yes

Does the contract include details of the progress payments payable

under the contract?

Yes

10)

Do you understand the procedure to make a variation to the contract? Yes

11)

Are you aware of who is to obtain any council or other approval for the work? Yes

12)

Do you understand that you are not required to pay the contractor a deposit

or any progress payments until the contractor has given you a certicate of

insurance under Part 6 or Part 6B of the Home Building Act 1989 (except

where the work is of a kind that does not require insurance)?

Yes

12A) Does the contract include either of the following:

(a) the cost of the insurance under Part 6 of the Home Building Act 1989,

(b) the cost of the alternative indemnity product under Part 6B of the

Home Building Act 1989?

Yes

13)

Has the contractor given you a copy of the Consumer Building Guide, which

provides key information about your rights and responsibilities under NSW’s

home building laws and where to get more information?

Yes

14)

Does the contract include a statement about the circumstances in which the

contract may be terminated?

Yes

Signatures

Do not sign the contract unless you have read and understand the clauses as well as the notes and

explanations contained in the contract and this document.

If you have answered “no” to any question in the checklist, you may not be ready to sign the contract.

Both the contractor and the owner should retain an identical signed copy of the contract including the

drawings, specications and other attached documents. Make sure that you initial all attached documents

and any amendments or deletions to the contract.

Signed copy of contract

Under the Home Building Act 1989 a signed copy of the contract must be given to the owner within

5 working days after the contract is entered into.

3 of 2

Note: Where the owner

is a company or partnership or

the contract is to be signed by

an authorised agent of the owner,

the capacity of the person signing

the contract, eg. director, must

be inserted.

Note: If home building

compensation insurance or cover is not

taken out before work begins, this is a

breach of the Home Building Act 1989

and will affect a contractor’s right to

receive payment.

Home building compensation

insurance or cover means

insurance under Part 6 or cover

under Part 6B of the Home Building

Act 1989.

Make sure your contractor gives you

proof of home building compensation

insurance or cover before they start

work on your project or you pay them

any money.

Attach your certicate of insurance or

evidence of cover to this contract with

the other contract documents.

You will need to produce them if you

need to make a claim. The name and

licence number of the contractor on

the certicate or evidence of cover

should match those on the contract.

You can check the validity of your

insurance or cover on the public

https://hbc.onegov.nsw.gov.au

Signature

Name (print)

Capacity (print)

Signature

Name (print)

Capacity (print)

Insurance under Part 6 or Part 6B of the Home Building Act 1989

The contractor must provide you with a certicate of insurance under Part 6 or Part 6B of the Home

Building Act 1989 before the contractor commences work and before the contractor can request or receive

any payment.

Acknowledgment of owners

I/we have been given a copy of the Consumer Building Guide and I/we have read and understand it.

I/we have completed the checklist and answered ‘Yes’ to all items on it.

4 of 29

Contractor

initials

Owner

initials

Warning: The contract price

may increase in accordance with

the contract terms. This is because

not all costs can be absolutely

determined at the outset although

the contractor is obliged to make

reasonable estimates given

known conditions. The reasons for

possible increases include:

• Increase in taxes, eg. GST

(Clause 3)

• Provisional Sums (Clause 10)

• Prime Cost Items (Clause 11)

• Variations and price adjustments

including those due to

unforeseen matters or required

by council (Clause 13)

• Interest on overdue payments

(Clause 14)

• Boundary Survey (Clause 20).

Note: The owner should

check these details by contacting

Fair Trading before signing the

contract.

Note: The cost of insurance

or cover under the Home Building

Compensation Scheme may

include brokerage costs, fees and

taxes paid by the contractor.

Explanation: A qualied

supervisor is applicable unless

the contractor’s licence has the

letter ‘Q’ shown in the right hand

bottom corner.

Warning: If a payment

is made by a business to another

business when the payer has

not received notication of the

recipient’s ABN (Australian

Business Number) then the payer

will be obliged to withhold tax as

required by the ATO (currently

48.5%) and send it to the ATO.

Owner

Name(s)

Address

Postcode

Home phone

Work phone

Fax number

Mobile

Owner

Name(s)

Address

Postcode

Home phone

Work phone

Fax number

Mobile

Contractor

Name

(as shown on licence)

Licence number

Expiry date

/ /

Category of work

shown on licence

Australian Company

Number (if applicable)

Address

(as shown on licence)

Postcode

Business address

and address for

service documents

(if different from

address on licence)

Postcode

Home phone

Work phone

Fax number

Mobile

Qualied supervisor

(if applicable)

ABN

Address

Where the work

will be done (site)

Postcode

Title details

Lot number

Deposited plan no.

Certicate of

Title-Folio identier

Contract price* *(including GST)

Amount in words

Cost of home building compensation cover/insurance

included in above price

Notes, Explanations

and Warnings

The notes, explanations and

warnings that follow do not

form part of the contract.

Owner and Contractor details

0.00

Contractor

initials

Owner

initials

Clause 1

Contract documents

This contract consists of owner, contractor, site and price details, the

Clauses 1 through to 30 (hereafter referred to as ‘the contract conditions’)

and any additional conditions agreed to by the owner and contractor which

must be in writing, together with the section for signatories and contract date

appearing after the contract conditions.

All plans and specications for work to be done under this contract, including

any variations to those plans and specications are taken to form part of

this contract.

Any agreement to vary this contract, or to vary the plans and specications

for work to be done under this contract, must be in writing signed by each

party to this contract. The documents listed below also form part of this

contract and must be attached:

Specications prepared by No. of pages Date

Plans prepared by No. of pages Date

Other documents prepared by No. of pages Date

In the event of any difference or inconsistency between the above

documents, the contractor must discuss the matter with the owner and

attempt to seek agreement on the work to be performed or the materials to

be used.

See dispute resolution procedures in Clause 27.

The additional conditions shall take precedence over the printed contract

conditions where there is any inconsistency or ambiguity.

All items shown in the plans form part of the work to be performed under this

contract unless specically excluded by the contract conditions, including

any additional conditions, specications or other documents listed above.

Items listed in the Excluded items schedule (opposite) are not included in this

contract. The Schedule should be completed or marked ‘Not Applicable’.

If the Excluded items schedule is not completed it will be deemed to be

not applicable.

Note: This contract is a legally

binding agreement. The following

30 clauses set out the parties’

rights and obligations.

Take time to read and understand

the various clauses and do not sign

unless you have read the checklist

and answered ‘yes’

to all questions.

Explanation: The general

conditions of contract contain the

terms upon which the work is to be

carried out and payment made.

The purpose of the specications

is to describe the materials to be

used and standard of workmanship

to be observed. The plans are the

pictorial representation of the work.

The parties may also wish to

include other documents, such

as a nal tender, an engineer’s

drawing, geotechnical report,

council conditions of approval,

sewer diagram, survey certicate,

if applicable, as part of the contract

and these need to be specied

opposite.

Note: The contract must

contain a sufcient description

of the work. This is required

under the Home Building Act

1989. If there are plans and

specications, these must be

attached as part of the contract.

Note: The owner should

check that the contractor is aware

of any special nishes, appliances

or materials required by the

owner and that the specications

and plans incorporate those

requirements.

5 of 29

6 of 29

Contractor

initials

Owner

initials

No alterations, additions or

deletions to the clauses contained

in this contract should be made

unless reasons for such changes

are provided in writing and both

parties agree to the changes. If

the changes are unclear, seek

appropriate legal or technical

advice. Where there are any

changes to the clauses or where

information is inserted in any of

the boxes provided, the parties

should initial their amendments

or additions.

Excluded items schedule

(items not included in contract)

Clause 2

Quality of construction

All work done under this contract will comply with:

1. (a) the Building Code of Australia (to the extent required under the

Environmental Planning and Assessment Act 1979 (including any

regulation or other instrument made under that Act); and

(b) all other relevant codes, standards and specications that the

work is required to comply with under any law, and

development certicate.

2. Despite subclause (1), this contract may limit the liability of the contractor

for a failure to comply with subclause(1) if the failure relates solely to:

(a) a design or specication prepared by or on behalf of the owner

(but not by or on behalf of the contractor), or

(b) a design or specication required by the owner, if the contractor

has advised the owner in writing that the design or specication

contravenes (1).

Clause 3

General conditions of contract

It is agreed, subject to this and the other clauses of this contract, that:

(a) the contractor will:

• comply with the statutory warranties in section 18B of the

Home Building Act 1989 and complete the work in accordance

with the requirements of this contract; and

• comply with all relevant Australian Standards, laws and the

requirements of the relevant local council and all statutory

authorities with respect to the work.

(b) the owner will pay the contract price in the manner specied in

this contract.

Note: This schedule

lists those items which are not

included in the contract. You

should carefully check the

plans, specications and other

documents if applicable to ensure

that there is no inconsistency

between this schedule and

those documents. (If space

is insufcient attach a sheet

referring to this schedule).

The contract price may

need to be amended for the

reasons listed in the warning

at the start of the contract. The

owner should discuss these

matters with the contractor prior

to signing this contract to clarify

what additional costs, if any, may

be involved.

7 of 2

Contractor

initials

Owner

initials

The contract price includes all taxes (including GST) associated with the

work. References to costs and payments are inclusive of GST where

applicable. The contract price may be increased by the amount of any

increase in tax or duty which is imposed after the date of this contract and

which directly relates to work done or materials supplied under this contract.

The contractor warrants that as at the date of this contract, the contract

price is based upon site inspections and all other investigations which would

usually be undertaken by an experienced and competent contractor and

includes all matters including equipment that could be reasonably expected

to be necessary for the completion of the work covered by this contract. The

contract price may be adjusted after the date of contract only in accordance

with this contract.

Cooling off period

for contracts with price over $20,000

Under the Home Building Act 1989 the owner may,rescind the contract under

the following provisions. The contract may be rescinded even if work has

commenced under the contract.

The notice of rescission must be given to the contractor:

(a) where the owner has been given a copy of the signed contract – within

5 clear business days after being given a copy of the signed contract,

(b) where the owner has not been given a copy of the signed contract

within 5 days after the contract was signed – within 5 clear business

days after the owner becomes aware of being entitled to be given a

copy of the signed contract.

The notice of rescission must state that the owner rescinds the contract, and

must be given to the contractor by leaving it at the address shown as the

contractor’s address, or by any method of service provided by Clause 28

of this contract.

If a notice of rescission is given to the contractor:

(a) the contract is taken to be rescinded from the time it was signed,

subject to (b), (c), (d) and (e) below

(b) the contractor may retain out of any money already paid to the

contractor the amount of any reasonable out of pocket expenses that

the contractor incurred before the rescission

the contract by, or on behalf of, the owner at or since the time the

contract was made

(d) the owner is not liable to the contractor in any way for rescinding

the contract

(e) the contractor is entitled to be paid a reasonable price for any work

carried out under the contract to the date the notice of rescission

is given.

The cooling off period may

be shortened or deleted from

the contract by an additional

condition of the contract, provided

the owner gives to the contractor

a certicate by a legal practitioner

that complies with s.7BA(5) Home

Building Act. You should seek

legal advice if the owner’s rights

to a cooling off period is sought to

be changed in any way.

The cooling off provisions do not

apply to contracts:

(i) between parties who each

hold a contractor licence and

is for work that each party’s

contractor licence authorises

the contractor to do;

(ii) between a licensed contractor

and a developer;

(iii) where, if the work were not

to be done promptly there

is likely to be a hazard to

the health or safety of any

person or to the public or

to be damage to property

and the work could not

be done promptly if the

cooling off provisions were

to be complied with before

commencing the work;

(iv) that are supplied and fully

prepared by or on behalf of

the person who contracts with

the holder of the contractor

licence and no part of which

is supplied or prepared by or

on behalf of the holder of the

contractor licence.

8 of 29

Contractor

initials

Owner

initials

Clause 4

Deposit

The deposit under this contract will be:

Amount in words

Clause 5

Commencement of work

The contractor must commence the work within working days from:

• the date of this contract, or

• if the approval of the local council or other statutory authority has still to be

obtained for the work, the date of written notication of that approval, or

• if the consent of the lending authority is required, the date of written

notication of consent that the work may proceed whichever is latest.

The contractor may, by written notice, request the owner to provide

satisfactory evidence of the owner’s title to the land and capacity to pay the

contract price and for any variations agreed to after the contract is signed.

If the owner fails to provide such evidence within 10 business days from

receipt of such notice, the contractor may suspend the work under the

contract in accordance with Clause 24 or take action to end it in accordance

with Clause 26.

Note: Any deposit amount

must be specied opposite and

must not exceed the maximum

allowable under the law of 10% of

the contract price.

Certain deposits could attract

GST liability eg. where deposit is

forfeited or part of a payment. Any

amount received by the contractor

prior to the commencement of

work irrespective of whether the

payment is described as a deposit

or a payment for any other reason

must not exceed the maximum

allowable deposit amount.

Note: The contractor must

give you proof of home building

compensation insurance or cover

before starting work or requesting

or receiving any payment

(including the deposit).

Note: The contractor

should check that the owner’s

name stated on the contract

is the same as that appearing

on the certicate of title for the

land. A letter from the lending

authority or owner’s bank may be

requested in relation to capacity

to pay.

The contractor must obtain home

building compensation insurance

or cover and provide proof of

this to the owner before starting

work or requesting or receiving

payment. Failure to take out

insurance or cover may affect the

contractor’s right to payment.

Contractor

initials

Owner

initials

Clause 6

Time for completion

The contractor must diligently proceed and complete the work within

calendar weeks from the date the work is due to commence as referred

to in Clause 5. The period of time allowed for completion has taken into

account any public holidays and other days when it is known that work will

not be performed. The time for completion may be subject to amendment in

accordance with Clause 7.

Clause 7

Extension of time

If the work is delayed by:

• inclement weather or conditions resulting from inclement weather

• any order of a court or tribunal that the work be suspended, unless that

order resulted from the fault of the contractor

• any act or omission of the owner

• any industrial dispute affecting the progress of the work (not being

a dispute limited to the site or limited to employees of the contractor)

• the unavailability of materials necessary for the continuation of the work,

unless due to the fault of the contractor

• a variation to the work

• a suspension of the work by contractor under Clause 24, or

• any other matter, cause or thing beyond the control of the contractor, the

contractor will be entitled to a reasonable extension of time to complete

the work. Both the contractor and owner (if applicable) must take all

reasonable steps to minimise any delay to the work.

If the contractor wishes to claim an extension of time, the contractor must

notify the owner in writing of the cause and estimated length of the delay

within 10 business days of the occurrence of the event or, in the case of a

variation, from the date of agreement to the variation.

If the owner does not, within a further 10 business days, notify the contractor

in writing that the extension of time sought is unreasonable, the completion

date for the contract will be extended by the period notied to the owner.

If the owner gives the contractor written notice disputing the extension of

time claimed, and no agreement can be reached on the time to be allowed,

the dispute must be dealt with in accordance with the dispute resolution

procedure (Clause 27).

Explanation: The time

allowed for completion should be

realistic. The contract time should

allow for any public holidays or

periods when it is known the

work will not be performed, for

example the building industry

shutdown over the Christmas

period and industry rostered days

off. Instances can occur when

the time for completion has to be

adjusted. See Clause 7.

Explanation: Delays can occur

during the course of the work.

The contractor is entitled to apply

for a reasonable extension of time

for completion.

In order to qualify for an extension

of time the contractor must

comply with the requirements set

out in this clause.

Note: Disagreements

may occur if a contractor fails

to correctly claim for justied

extensions of time. The contractor

should ensure that the procedure

set out in Clause 7 is always

followed.

9 of 29

10 of 29

Contractor

initials

Owner

initials

Clause 8

Completion of work

The work will be complete when the contractor has nished the work in

accordance with the contract documents and any variations, there are no

omissions or defects that prevent the work from being reasonably capable

of being used for its intended purpose, any damage of the kind referred to in

Clause 19 has been repaired, and all rubbish and surplus material has been

removed from the site.

When the contractor believes the work is complete, the contractor must

notify the owner in writing certifying that the work has been completed in

accordance with this contract. Within 10 business days of receipt of written

notice from the contractor, the owner must advise the contractor in writing

of any items of work the owner considers to be incomplete or defective. If

the owner does not so notify the contractor, the work will be taken to be

complete.

The contractor must complete any outstanding work promptly and again notify

the owner in writing. Unless the owner noties the contractor in writing that

any item is still incomplete or defective within a further 10 business days from

receipt of notication by the contractor, the work will be taken to be complete.

Should there be any dispute between the parties as to whether the work

has been completed, it must be dealt with in accordance with the dispute

resolution procedure (Clause 27).

Clause 9

Statutory warranties

The contractor warrants that:

(a) the work will be done with due care and skill and in accordance with the

plans and specics set out in the contract

(b) all materials supplied by the contractor will be good and suitable for the

purpose for which they are used and, unless otherwise stated in the

contract, those materials will be new

Building Act or any other law

(d) the work will be done with due diligence and within the time stipulated in

the contract, or if no time is stipulated, within a reasonable time

(e) if the work consists of the construction of a dwelling, the making of

alterations or additions to a dwelling or the repairing, renovation,

decoration or protective treatment of a dwelling, the work will result, to

the extent of the work conducted, in a dwelling that is reasonably  for

occupation as a dwelling

(f) the work and any materials used in doing the work will be reasonably t

for the specic purpose or result, if the owner expressly makes known

to the contractor or another person with express or apparent authority to

enter into or vary contractual arrangements on behalf of the contractor,

the particular purpose for which the work is required or the result that the

owner desires the work to achieve, so as to show that the owner relies on

the contractor’s skill and judgment.

These warranties do not in any way reduce or limit the contractor’s

obligations in relation to workmanship, materials, completion or other matters

specied in Clauses 2 and 3 or elsewhere in this contract. No provision of

this contract can reduce, restrict or remove these statutory warranties.

Explanation: Should any

defects or omissions become

apparent after completion, refer

to the Defects Rectication

clause (Clause 23).

Paragraph (f) on this page

relates to work where the owner

makes known to the contractor

the intended purpose of the works

or the result the owner expects

to achieve with the work. This

warranty requires the contractor to

use appropriate expertise to provide

the stated and expected results.

Explanation: Under the Home

Building Act 1989 the contractor is

required to give the warranties set

out in this clause.

The statutory warranties in the

contract are as printed in the

Home Building Act. They require

the contractor to provide a product

as agreed, in a suitable state, t for

its intended purpose, complying

with all relevant laws and within the

agreed time, or if not agreed a time

that is reasonable

Note: Any legal action for

a breach of statutory warranties

must be taken before the end of

the warranty period for the breach

ie. 6 years for a breach resulting

in a major defect (as dened in

the Home Building Act 1989) or

2 years in any other case.

The warranty period starts on

completion of the relevant work to

which it relates (but this does not

prevent proceedings from being

commenced before completion of

the work). However, if the work is

not completed, the warranty period

starts on:

(i) the date the contract is

terminated, or

(ii) if the contract is not terminated

– the date on which work under

the contract ceased, or

(iii) if the contract is not terminated

and work under the contract

was not commenced – the date

of the contract.

Other than in the case of non-

completion of work, if the breach

of warranty becomes apparent

within the last 6 months of the

warranty period, proceedings

may be commenced within a

further 6 months after the end

of the warranty period. A breach

becomes apparent when the owner

of the property becomes aware

(or ought reasonably to have

become aware) of the breach

Contractor

initials

Owner

initials

Clause 10

Provisional sums

The contract price includes the items of work set out in the provisional sums

schedule for which the contractor cannot give a denite price. The provisional

sums schedule set out the amount allowed for the cost of each item of work,

including GST.

The contractor warrants that the provisional sums allowed have been estimated

with reasonable care and skill, and in light of information necessary and

available at the date of this contract and taking into account such factors as

a competent and experienced contractor should have taken into account in

estimating the provisional sums.

The contractor must also offer to the owner or the owner’s representative the

opportunity, with adequate written notice, to be present at the site during the

performance of any work included in the provisional sums schedule in order to

verify the actual cost of the work. The contractor does not have to delay the work

if the owner is unable to attend at the time the work is to be performed.

If the actual cost to the contractor is greater than the provisional sum allowed,

the excess amount together with the contractor’s margin of % on

the excess, to cover overheads, supervision and prot shall be added to

the contract price, along with the additional GST. If the actual cost to the

contractor is less than the provisional sum allowed, the contract price will

be reduced by the difference between the provisional sum allowed and the

actual cost.

Any such addition or deduction will be taken into account in the next

progress payment or as agreed between the parties.

The contractor must provide a copy of any relevant invoice, receipt or

other document evidencing the actual cost of the work included in the

provisional sums schedule at the time payment is requested.

Provisional sums schedule

Item of work Unit

Dollar

rate per

unit

Provisional

sum

(including GST)

(If space is insufcient, attach a sheet

referring to this schedule)

Total

cost

Explanation: Provisional sums

(including GST) are estimates of

the cost of items of work included

in the contract for which the

contractor cannot give a denite

price, for example, unforeseen rock

excavation. An estimated cost is

provided in the contract price which

is adjusted after the work has been

done. The contractor should ensure

the estimate is realistic.

Provisional sums should only

be used where the contractor

cannot price the work before it is

undertaken. If there is any doubt

the owner should ask the contractor

to fully explain the reasons why a

xed price cannot be given.

Explanation: Contractors

normally include in the price for all

work a margin to cover overheads,

supervision and prot. The margin

to be applied to the adjustment of

provisional sums is to be inserted

in the box opposite. You should

question any margin that exceeds

20% and seek further advice if

necessary.

Note: The contractor should

assess the suitability of the site for

the proposed works and if tests

are necessary they should be

undertaken so that a price for that

area of work can be included in the

xed price of the contract.

Note: Provisional sums should

only be used where the contractor

cannot give a denite price for the

work. If there is any doubt the owner

should seek an explanation from

the contractor. Excessive use of

provisional sums should be avoided.

When it is difcult for the contractor

to estimate quantity, for example the

extent of rock to be excavated or

concrete piers required, a rate item

should be provided. The allowed

rate should be multiplied by the

contractor’s estimate of the quantity

to arrive at a provisional sum

allowance. When the provisional

sum is adjusted the rate will be

multiplied by the actual quantity and

the contract price adjusted.

Note: In the case of rates

for excavation of rock, discuss

the

need for a geotechnical survey

to more accurately assess the

quantity. If the quantities are not

carefully estimated, the contract

price may vary significantly.

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Clause 11

Prime cost items schedule

The contract price includes the items specied in the prime cost items schedule

which the owner has not selected at the date of this contract and for which the

contractor cannot give a denite price. The amounts allowed are for the cost of

each item, including GST.

The installation of prime cost items and connection to services, unless

otherwise specied is included in the contract price.

The contractor warrants that the prime cost items have been estimated with

reasonable care and skill, and in light of information necessary and available

at the date of this contract and taking into account such factors as a competent

and experienced contractor should have taken into account in estimating the

likelihood of such items being required and their likely cost.

The owner must select each item in conjunction with advice from the contractor

within sufcient time so as not to cause any delay to the work. The contractor

must give the owner adequate written notice as to when a selection of each

item is required in order to avoid any delays.

If the actual cost to the contractor is greater than the prime cost amount allowed,

the excess amount together with the contractor’s margin of % on the

excess, to cover overheads, supervision and prot shall be added to the contract

price, along with the additional GST. If the actual cost to the contractor is less

than the amount allowed, the contract price will be reduced by the difference

between the amount allowed and the actual cost.

The contractor must provide a copy of any relevant invoice, receipt or other

document evidencing the purchase price of the item at the time payment is

requested. If the contractor purchases a prime cost item, any discount for

prompt payment will be allowed in favour of the contractor. All written warranties

for such items must be given to the owner on completion of the work and must

be enforceable by the owner.

Prime cost items schedule

Item

Prime cost

amount

(including GST)

(If space is insufcient, attach a sheet

referring to this schedule)

Total

cost

Explanation: Contractors

normally include in the price

for all work a margin to cover

overheads, supervision and

prot. The margin to be applied

to the adjustment of provisional

sums is to be inserted in the box

opposite. You should question

any margin that exceeds

20% and seek further advice

if necessary.

Note: The owner should

ensure that the contractor is

given sufcient details of the

type and quality of items to be

selected so that the contractor

can quote accurately.

Explanation: It is always best to

obtain a xed price for all work

under the contract. However,

certain xtures and ttings may

need to be selected after the

signing of the contract. These

items may include the stove, or

special kitchen and bathroom

products. Where such items are

specied as prime cost items

the contractor will allow in the

contract price an amount which

should cover the expected cost

of the item.

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Clause 12

Progress payments

The owner must pay the contract price by progress payments within

5 business days of the completion of the stages of the work nominated in

the schedule of progress payments. The contractor must notify the owner in

writing when a stage of the work has reached completion. A stage of work

has reached completion when it has been nished in accordance with the

contract documents and any variations agreed to and there are no omissions

or defects that prevent that stage of the work from being reasonably capable

of being used for its intended purpose. Any deposit paid is deducted from the

rst progress payment.

Despite the preceding paragraph, if the owner’s lending authority

(if applicable) is to make all or any progress payments, then the contractor

agrees to accept the usual payment terms (including the need for inspections

and certications required by the lending authority) in place of the

requirements specied in the preceding paragraph.

Schedule of progress payments

(to be completed by parties)

Stages of work

(Note that there does not need to be 10 stages and

payments to be made at the completion of the stage)

Amount

(including GST)

(less deposit: $ )

(If space is insufcient, attach a sheet

referring to this schedule)

Total

Payment of a progress payment is not to be regarded as acceptance by

the owner that the work has been completed satisfactorily or in accordance

with the contract documents.

If there is any bona de dispute in relation to the value or quality of work

done, the dispute must be dealt with in accordance with the dispute

resolution procedure set out in Clause 27. In those circumstances, the

parties agree as follows:

(a) the owner may withhold from the progress payment, an amount

estimated by the owner, acting reasonably, equal to the owner’s estimate

of the value of the disputed item

(b) the contractor must continue to carry out its obligations under this

contract pending resolution of the dispute.

Note: If the owner makes

a progress payment but is

concerned with any aspect of the

work the owner should promptly

advise the contractor in writing of

these concerns. If the owner has

any doubt, they should consider

obtaining independent advice from

a building consultant, architect or

quantity surveyor.

Should there be a dispute in

relation to any part of the work

the parties should try to agree

on an appropriate amount to be

deducted from the progress claim

until the dispute is resolved.

As this is a xed price contract

it will provide for the authorised

progress payments in (a). However

this contract can also provide for a

progress payment in (b)-(This may

be the case if there are variations

that cannot be costed before they

are carried out).

(a) a progress payment of a

specied amount or specied

percentage of the contract

price that is payable following

completion of a specied stage

of the work, with the work that

comprises that stage described

in clear and plain language,

(b) a progress payment for labour

and materials in respect of

work already performed or

costs already incurred (and

which may include the addition

of a margin), with provision

for a claim for payment to be

supported by such invoices,

receipts or other documents as

may be reasonably necessary

to support the claim and

with payment intervals xed

by the contract or on an “as

invoiced” basis.

Explanation: Progress

payments are usually made at

specied stages as the work

proceeds. These payments,

which include GST, should

equate to the value of work

done. Note, a lending authority

may have certain requirements

for progress payments and the

parties should check these. If

the lending authority has any

special requirements for progress

payments there may be a need to

include an additional clause in the

contract covering them.

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Clause 13

Variations

The work to be done or materials used under this contract may be varied:

• at the request of the owner, or

• at the request of the contractor. If the necessity for the variation is due

to the fault of the contractor the owner will not be liable for any increase

in the contract price, or

• due to such other matters that could not reasonably be expected to be

foreseen by an experienced, competent and skilled contractor for the

completion of the work at the date of the contract, or

• due to a requirement of a council or other statutory authority relating

to the work, if at the date of this contract such requirement could not

reasonably have been foreseen by the contractor.

Procedure for variations

Before commencing work on a variation, the contractor must provide to

the owner a notice in writing containing a description of the work and the

price (including separate disclosure of the GST and the component of the

price attributable to any consequential increase in the cost of the building

cover contract entered into by the contractor in respect of the work to

be done under this contract). If not otherwise specied the price will be

taken to include the contractor’s margin for overheads, supervision and

prot.

The notice must then be signed and dated by both parties to

constitute acceptance.

If the time for completion will be delayed by the variation the contractor

must include in the notice an estimate of the additional time required.

Any extension of time must be dealt with in accordance with Clause 7.

The requirement for variations to be in writing does not apply where, if

the work were not to be done promptly there is likely to be a hazard to the

health or safety of any person or to the public or to be damage to property

and the work could not be done promptly if the variation had to be put in

writing before commencing the work.

Variations shall be subject to the overall conditions of this contract.

Adjustment of contract price

The contract price may be adjusted as a consequence of:

(a) variations to work or materials agreed in accordance with this Clause

13; and

(b) any variation to the cost of the building cover contract entered into by

the contractor in respect of the work to be done under this contract.

The cost of deletions from the contract will be deducted from the contract

price. The price of any variation specied in the notice signed and dated

by both parties will be added to the contract price.

The component of the increase to the contract price that is attributable to

an increase in the cost of the associated building cover contract must be

separately disclosed.

Any adjustment to the contract price will be taken into account at the time

of the next progress payment or paid as agreed by the parties.

Explanation: If, after work has

commenced, the owner decides

to delete, alter or add to the work

to be done, a variation to the

contract may be required. The

work also may be varied at the

request of the contractor, due to

a requirement of the council or

other authority, or a matter which

could not be foreseen at the time

of signing the contract.

Note: Copies of letters and

notices relating to variations

should be kept by both parties.

Explanation: Contractors

normally include in the price

for all work a margin to cover

overheads, supervision and

prot. The margin to be applied

to the adjustment of prime cost

items is to be inserted in the box

opposite. You should question

any margin that exceeds 20%

and seek further advice if

necessary.

Explanation: “Building

cover contract” is dened

in Clause 30 and relates to

insurance or cover under the

Home Building Compensation

Scheme. The Variations Clause

provides for the contractor to

adjust the contract price to

account for changes in the cost of

this insurance or cover compared

to the amount stated on page 5 of

this contract.

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Right to terminate the contract for variations due to unforeseen

matters or a requirement of council or other statutory authority

If the work must be varied due to a matter that could not reasonably be

expected to be necessary for the completion of the work or a requirement of

the council or other statutory authority which was not known at the date of

this contract and the owner notied the contractor in writing that the owner

is unable to meet the cost of that variation, then the owner will be entitled to

terminate the contract by notice in writing to the contractor (Clause 25).

If the contract is so terminated, the contractor is entitled to payment:

• in accordance with Clause 12 in respect of completed stages

• for the actual cost of the work done since the completion of the last stage,

and for any materials on the site, together with a margin of

% for

prot supervision and overhead on the cost of that work and materials,

and GST payable

• for the cost of the building cover contract relating to the work done where

that cost has not already been paid by the owner.

Clause 14

Time for payments

When the contractor gives the owner a written claim for a progress payment

or other amount due under the contract, the owner must pay, unless the

owner notied the contractor in the manner stated below, the amount of the

claim within 5 business days of receipt of the claim (which must not be less

than 5 business days). However, the preceding sentence is subject to any

contrary term or condition specied in Clause 12.

If the owner disagrees that the contractor is entitled to be paid a progress

claim or other amount due under the contract, the owner must notify the

contractor in writing within 5 business days of receiving the claim setting

out the reasons for that disagreement. If there is any dispute between

the parties relating to a payment under the contract it must be resolved

according to the dispute resolution procedure set out in Clause 27.

If the owner fails to pay the amount of a claim in part or in full by the due

date and fails to give notice disputing the claim to the contractor, interest

at the current bank rate (as dened in Clause 30) will be payable to the

contractor on the amount outstanding for the period overdue. However,

if the owner gives notice of a dispute in accordance with the dispute

resolution clause (Clause 27), interest at the current bank rate will only be

payable if the dispute is resolved in favour of the contractor and shall be

calculated from the time when payment would have otherwise been due.

Note: The contractor will

have to account for GST 21 days

after the end of the tax period

in which an invoice (ie. claim

for payment) is issued or the

payment is received, whichever

is earlier.

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Clause 15

Final payment

When the work is complete in accordance with Clause 8 the owner must pay

the amount remaining unpaid under the contract. Payment must be made

in the manner specied in Clause 14. If the amount is not paid, interest in

accordance with Clause 14 applies.

On receipt of the nal payment, the contractor must hand over to the owner

all guarantees, instruction manuals and the like unless already provided and

all keys relating to the work, together with any certication or approval which

may have been provided by any public authority relating to the work.

Clause 16

Work done and/or materials

supplied by owner

The owner will carry out the work and supply the materials described below.

The cost of that work and materials is not included in the contract price.

Work and materials by owner

The owner will supply the materials set out below. The cost of these

materials is not included in the contract price. The cost of installation by the

contractor is included in the contract price.

Materials only by owner

The owner must diligently carry out the work and supply the materials

described above to avoid undue delay to the work under the contract.

Note: If the work to be done

by the owner requires council

approval and the value of that

work exceeds $10,000 an owner-

builder permit will be required.

Also the owner should check with

his or her insurer the need to take

out separate insurance.

The owner should advise the

contractor when the work will be

done so as to avoid any delay in

the work under the contract.

The owner should check with

the contractor that any materials

to be supplied by the owner are

suitable for their purpose.

Explanation: If the owner is

to perform any of the work or

provide any items or materials

they must be specied in the

space provided. Ensure the items

are clearly and fully described.

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Clause 17

Approvals

Unless obtained by one of the parties prior to the date of the contract, the

contractor must promptly apply for, and bear the cost of, all necessary

application fees for approval of the work. The contractor must also apply for

and obtain, at its expense, all approvals required from any public authority to

occupy and use the completed work. The cost of doing so and all fees are

included in the contract price.

The contract price does not include the cost of local government security

deposits and these must be met by the owner.

If the contractor is required to obtain approvals before starting work under

this contract and all necessary approvals have not been obtained within

60 business days of the date of this contract, either party may terminate the

contract by notifying the other party in writing at the expiry of the 60 business

day period.

If the contract is terminated in accordance with this clause, the contractor

is entitled to be paid all reasonable costs associated with applying for the

approvals to the date the contract is terminated together with the contractor’s

margin on these costs.

If a deposit has been paid by the owner which is in excess of the amount

payable to the contractor, the excess must be refunded to the owner within

5 business days of the termination of the contract.

Clause 18

Compliance with requirements

of local statutory authorities

In carrying out the work the contractor must comply with the codes,

standards, specications and conditions of consent as set out in Clause 3.

If, due to such a requirement, the plans or specications have to be

amended, the contractor must immediately advise the owner in writing

explaining the reason for the change. Any agreement to vary the plans and

specications for the work must be in writing and signed by both parties.

Any changes to be made to the work or materials to be used, provided they

are not as a result of any fault on the part of the contractor, will be dealt with

as variations in accordance with Clause 13.

The contractor must make good, at the contractor’s own cost, any damage to

footpaths and kerbs to the council’s satisfaction.

Standards and tolerances

The Home Building Act 1989 stipulates that the work will be done with due

care and skill, and in accordance with the plans and specications set out in

the contract. Unless otherwise stated these must comply with the Building

Code of Australia, to the extent required under the Environmental Planning

and Assessment Act 1979 (including any regulation or other instrument made

under that Act), Australian Standards and relevant NSW legislation.

Changes in climate or geographic conditions can cause movement and

variations in building work. Not all variations are a defect. The Building

Code of Australia and the relevant Australian Standards specify what are

considered acceptable minimum levels of performance.

Note: As a general rule,

all necessary building and other

approvals for the work should be

obtained prior to the signing of

the contract. If any approvals will

have to be obtained after the date

of the contract the parties should

carefully note the provisions

of Clause 17. The Council

may require a security deposit

covering possible damage to

kerbs. The owner should pay

such deposits to ensure refunds

are payable. Refer to Clause 19

regarding rectication of damage

to kerbs.

Note: If it is agreed that the

owner not the contractor will

apply for and obtain, at the

owner’s expense, all approvals

for the work, the rst paragraph of

clause 17 will have to be changed

to reect this.

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Clause 19

Access to site and materials handling

The contractor must do all work necessary to provide access to the site for

vehicles and other equipment required by the contractor to carry out the

work, and the cost of providing such access to the site is included in the

contract price.

The contractor must bear all costs involved in the delivery of materials to

the work, handling of materials, the removal and disposal from the site of

rubbish, surplus material, excavated material, vegetation and demolished or

dismantled structures.

The contractor shall be liable to the owner for any damage to kerbs, gutters,

paving, underground services, drains, structures or other property on the

site caused by the negligence or default of the contractor, any employee or

subcontractor of the contractor as a consequence of carrying out the work.

The contractor must allow the owner, any person authorised by the owner or

an authorised ofcer of the lending authority, if any, access to the site to view

and inspect the work in progress.

The owner must allow the contractor, and any employee or sub-contractor of

the contractor, access to the site during the currency of this contract.

The owner or the owner’s representative must communicate and deal with the

contractor personally or with such person nominated by the contractor as the

contractor’s authorised representative.

The owner must not give directions to the contractor’s employees or

sub-contractors.

Clause 20

Identifying the site

The contractor is responsible to ensure that the work is carried out on

the owner’s land. If there is any doubt as to the correct location of the

boundaries, the contractor must take all necessary steps to determine

their position. If the position of the boundaries can only be determined

by a boundary survey, the contractor, at the owner’s cost, must provide a

boundary survey. However, the contractor must notify the owner in writing

prior to obtaining the survey including a proper estimate of the cost of

the survey.

Clause 21

Assignment and sub-contracting

Neither the owner nor the contractor may assign their rights or obligations

under the contract without the prior written consent of the other party, such

consent not to be unreasonably withheld.

The contractor may sub-contract any part (but not the whole) of the work

without the owner’s consent but is not relieved from the responsibility under

this contract for that work.

Note: The contractor

should discuss with the owner

the question of access to the site

and materials handling before

signing the contract. If there are

any special site conditions which

may present problems during the

course of the work, for example

due to wet weather, agreement

should be reached as to how to

deal with this matter and who is to

pay for any additional cost which

may be incurred.

Note: Serious

consequences can arise if the

work is inadvertently performed

on land not belonging to the

owner. If there is any doubt the

contractor should arrange for a

boundary survey.

Explanation: It is common

practice in the building industry

for work to be performed by sub-

contractors and the contractor

is allowed to do so under this

contract. Assignment is the

transfer of a party’s rights and

obligations under the contract to a

third party. The contract prohibits

assignment without the consent

of both the owner and contractor.

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Clause 22

Insurance

The contractor must effect and maintain the following insurances until

completion of the work:

• public liability insurance to cover liabilities to third parties resulting from

death or personal injury or from damage to property for an amount not

less than $5 million

• property damage insurance in respect of the work, including the work in

progress, any associated temporary work and materials on the site, for

the full reinstatement and replacement cost plus an amount of not less

than 10% of the estimate of the full reinstatement and replacement cost

to cover removal of debris, demolition, architects and other consultant’s

fees. The interest of the owner must be noted on the policy and the

policy must where possible contain a ‘cross-liability’ clause. This

insurance must cover loss by accident, theft, re explosions, lightning,

hail, storm and tempest, vandalism and civil commotion

• employer’s liability and worker’s compensation insurance.

Settlement of claim

On settlement of any claim for damage to the work the contractor must

diligently proceed to rebuild, replace or repair the work. The contractor

will not be entitled to any payment other than for the amount of the

claim payment received from the insurer for the claim for the rebuilding,

replacement or repair of the work.

Evidence of insurance

Prior to the commencement of the work, and on request by the owner at

any time thereafter, the contractor must provide to the owner evidence in

writing that insurances required by this contract have been obtained and

are current. The evidence must include properly completed certicates

of currency and copies of the relevant policies (unless these are not

reasonably obtainable from the insurer or insurance broker). If the

contractor fails to provide such evidence, or if any of the insurances

required by this contract have not been taken out by the contractor, the

owner may arrange the insurance and deduct the cost from payments

then or subsequently due to the contractor.

Indemnity

The contractor indemnies the owner against any liability or loss in

respect of death or personal injury or property damage (including damage

to or loss of goods or materials on site including the work under the

contract) arising out of, or as a consequence of, the carrying out of the

work. However, if such liability or loss arises in whole or in part through

the negligence of the owner or owner’s representative the extent of

the contractor’s indemnity will be reduced by the extent to which the

negligence of the owner or owner’s representative contributed to such

liability or loss.

Note: If in doubt, the owner

should check with his or her

own insurer whether the cover

to be provided under Clause 22

is adequate.

Explanation: Clause 22

includes additional insurance

requirements.

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Clause 23

Defects rectication

The contractor must rectify omissions and defects in the work which become

apparent within the period of 13 weeks from the date the work has been

completed. The date of completion shall be determined in accordance with

Clause 8.

The owner must notify the contractor in writing of any omissions or defects

which need to be made good no later than 10 business days after the expiry

of the 13 week period. The contractor must rectify the omissions and defects

at the contractor’s own cost within 30 business days from receipt of such

notication and the owner must give the contractor reasonable access for

this purpose.

In respect of major omissions and defects in the work, a further defects

liability period of 13 weeks from the date the work has been completed

will apply.

If there is a dispute between the parties as to whether any item of work

is defective, has been omitted or has been satisfactorily rectied the

dispute must be dealt with in accordance with the dispute resolution clause

(

Clause 27).

Clause 24

Suspension of work by contractor

If the owner, without reasonable and substantial cause:

• fails to provide satisfactory evidence of title to the land and/or capacity to

pay the contract price, including any variations

• fails to pay a progress payment or any other amount due to the contractor

within the time allowed, but only if the owner fails to pay the progress

payment or other amount due after a written notice from the contractor

requiring payment within a further period of 5 business days

• fails to advise the contractor promptly of any requirement of or notice from

a statutory authority or the lending authority, if any, that affects the work

• fails to perform any work or supply materials as specied in Clause 16

which prevents the contractor from continuing with the work under the

contract

• denies the contractor or the contractor’s sub-contractors access to the

site so as to prevent the work from proceeding, or otherwise prevents the

contractor from carrying on the work; or if the owner becomes bankrupt,

assigns assets for the benet of creditors generally, makes a composition

or other arrangement with creditors or, if the owner is a company, goes

into liquidation or receivership or is otherwise without full capacity,

the contractor may, without prejudice to any other rights under the contract,

suspend the work by giving written notice to the owner in accordance with

Clause 28 (Giving of Notices) specifying the reason.

If the owner remedies the default, the contractor must recommence the work

within 10 business days unless the contractor has ended the contract under

Clause 26.

Explanation: After the work has

been completed omissions and

defects may become apparent.

The defects rectication period

is intended to allow the owner

to bring these matters to the

attention of the contractor so

that the contractor may attend

to them.

It is not intended that the defects

rectication period be used

to nish items of work which

should have been completed to

achieve completion of the work in

accordance with Clause 8.

This clause does not affect your

rights to pursue the rectication

of defects under the statutory

warranties. See the Consumer

building guide included as an

Appendix of this contract (and

available from the Fair Trading

website) for more information.

21 of 29

Contractor

initials

Owner

initials

Clause 25

Termination of contract by owner

Due to the fault of the contractor

If the contractor:

• is unable or unwilling to complete the work or abandons the work

• suspends the work before completion without reasonable cause

• becomes bankrupt, assigns assets for the benet of creditors generally,

makes a composition or other arrangement with creditors or, if the

contractor is a company, goes into liquidation or receivership or is

otherwise without full capacity

• fails to proceed diligently with the work

• fails to remedy defective work or remove faulty or unsuitable materials, or

• without reasonable cause fails to comply with an order or direction of a

public authority with respect to defective or incomplete work, which would

substantially affect the quality and/or progress of the work,

the owner may, if such default can be remedied, notify the contractor in

writing that unless the default is remedied within 10 business days or such

longer period as specied the owner will terminate the contract.

If the contractor does not comply with the owner’s request within the time

allowed, or if the default cannot be remedied, the owner may terminate the

contract by giving written notice to that effect to the contractor.

If the owner terminates the contract due to the fault of the contractor, any

unxed materials or ttings on the site may be retained by the owner.

Following the issue of a notice by the owner under this Clause no unxed

materials or ttings shall be removed from the site by the contractor.

If the reasonable cost of completion of the work exceeds that which would

have otherwise been due under the contract the difference will be a debt

payable by the contractor to the owner. Should the reasonable cost of

completion be less than otherwise due under the contract the difference will

be a debt payable to the contractor.

Until completion of the work the contractor will not be entitled to any further

payment under this contract. However, nothing contained in this clause may

take away any right the contractor may have to payment under the dispute

resolution procedure in Clause 27.

Other than due to the fault of the contractor

The owner may also terminate the contract by notice in writing to the

contractor in the following circumstances:

• if the owner, within the cooling off period, does not wish to proceed with

the contract (see Clause 3)

• if all necessary approvals for the work have not been obtained within

60 business days of the date of the contract (see Clause 17), or

• if the owner is unable to meet the cost of a variation due to a matter that

could not reasonably be expected to be necessary for the completion of

the work or a requirement of the council or other statutory authority (see

Clause 13).

A notice required under this Clause must be given in accordance with Clause 28.

If the owner ends the contract in the above circumstance, the contractor may

remove from the site and retain all unxed materials, ttings and equipment

supplied by the contractor.

Explanation: Clauses 25 and

26 set out the circumstances

in which the contract may be

ended by either the owner or

contractor. The consequences

for wrongfully ending the

contract may be serious and you

should seek independent advice

if you are not sure of your right

to do so.

Note: this contract may be

terminated in the circumstances

provided by the general law and

this does not prevent the parties

from agreeing to additional

circumstances in which the

contract may be terminated eg

as in Clauses 25 and 26.

22 of 29

Contractor

initials

Owner

initials

Clause 26

Termination of contract by contractor

Due to the fault of the owner

If the owner:

• fails to provide satisfactory evidence of title to the land or capacity to pay

the contract price including any variations (see Clause 5)

• fails to pay a progress payment or other amount due under the contract

(see Clause 14)

• becomes bankrupt, assigns assets for the benet of creditors generally,

makes a composition or other arrangement with creditors or, if the owner is

a company, goes into liquidation or receivership or is otherwise without full

capacity

• denies access to the site to the contractor, the contractor’s employees or

sub-contractors so as to prevent the work from proceeding (see Clause 19)

• fails to perform any work or supply materials as specied in Clause 16

which prevents the contractor from continuing with the work under the

contract or otherwise obstructs the contractor from performing the work

• fails to rectify a cause of suspension under Clause 24 within the time

specied in Clause 24, or

• without the consent of the contractor prior to completion of the work enters

into occupation or otherwise obstructs the contractor from performing

the work,

the contractor may, where such default can be remedied, notify the owner in

writing that unless the default is remedied within 10 business days or such

longer period as specied the contractor will terminate the contract.

Unless the owner complies with the contractor’s request within the time

allowed, or if the default cannot be remedied, the contractor may terminate

the contract by giving written notice to this effect to the owner.

If the contractor terminates the contract under this clause, the contractor

may remove from the site and retain all unxed materials, ttings and

equipment supplied by the contractor and will be entitled to recover all losses

and expenses arising from the termination of the contract or to offset such

amounts from any amount due to the owner.

Other than due to the fault of the owner

The contractor may terminate the contract by notice in writing to the owner

if all necessary approvals for the work have not been obtained within

60 business days of the date of the contract, unless failure to obtain those

approvals is due to the act, omission or default of the contractor (see

Clause 17).

A notice required under this clause must be given in accordance with

Clause 28.

Contractor

initials

Owner

initials

Clause 27

Disputes

If the owner or contractor considers that a dispute has arisen in relation to

any matter covered by this contract, either during the progress of the work,

after completion of the work or after the contract has been terminated, that

person must promptly give to the other party written notice of the items

of dispute.

If the dispute is not resolved informally following such notication, the parties

may confer with a mutually agreed third party whose role will be to assist in

the resolution of the dispute by mediation or expert appraisal of the work.

If the parties do not agree to confer with a third party to assist in the

resolution of the dispute, or if the dispute is not resolved following the

assistance of such a third party, the owner may notify Fair Trading that a

building dispute exists and seek the assistance of Fair Trading to resolve

the dispute.

Even if a dispute has arisen the parties must, unless acting in

accordance with an express provision of this contract, continue

to perform their obligations under the contract so that the work is

completed satisfactorily within the agreed time.

Clause 28

Giving of notices

If the contract requires or permits a party to give a notice, consent, or other

communication in writing to the other party, it must be given by either:

• handing it to the other party

• leaving it with a person, apparently over the age of 16, at the other party’s

business or residential address, or

• by registered post to the last known address of the other party.

Note: If you have a dispute you

should rst discuss the matter

with the other party. Serious

disputes can often be avoided by

good communication between

owner and contractor. It is

suggested that in the event of a

dispute the parties meet as soon

as possible and by discussion

endeavour to resolve the matter.

Make sure you understand your

obligations under the contract. If

necessary, obtain independent

advice. The dispute resolution

procedure is aimed at reducing

the need for possible costly

litigation. Fair Trading can

investigate a complaint from an

owner and may issue an order

requiring a contractor to rectify

or complete work or to rectify

any damage. For further details

refer to Part 3A Division 2 Home

Building Act 1989.

If the dispute cannot be

resolved informally the owner

may contact Fair Trading for

information.

Note: A copy of any notice given

under the contract should be kept.

Where a notice is given other than

by handing to the other party, the

person who gave notice should

follow up to ensure it is received.

23 of 29

24 of 29

Contractor

initials

Owner

initials

Clause 29

The party supplying any plans or specications (documents) for use

under this contract warrants that they may be used for the purposes of

this contract and indemnies the other party against any liability or cause

of action by any person claiming ownership or copyright in respect of the

documents or arising out of their use.

If the contractor prepares the documents under the direction of the owner

or from sketches supplied by the owner which may infringe the copyright

of another person, the owner indemnies the contractor against any legal

action in respect of a breach of copyright by the contractor.

If the contractor prepares the documents the contractor retains copyright in

those documents but the owner will, provided the contractor has been paid

for those documents, be entitled to complete the work in accordance with

those documents.

Clause 30

Denitions

In the printed general conditions of contract

• words imparting the singular include the plural and vice versa.

• a reference to the male gender includes the female and a reference to a

person includes a partnership and a company.

• the current bank rate is the Commonwealth Bank Overdraft Index Rate

as published from time to time plus 2% per annum.

• ‘Lending authority’ means a bank, building society or other nancial

institution which lends the owner the contract price or any portion of

that amount.

• ‘GST’ means Goods & Services Tax – a tax levied by the Federal

Government on the supply of goods and services.

• ‘Building cover contract’ has the meaning given by subclause 1(1) of

Schedule 1 of the Home Building Act 1989.

• ‘Business day’ means any day other than a Saturday, Sunday, public

holiday or 27, 28, 29, 30 or 31 December.

• a reference to ‘include’ or ‘including’ or ‘for example’ in a list means that

items not listed may be included.

• a reference to any legislation includes any statutory modication,

re-enactment, substitution and any subordinate legislation issued under

that legislation.

• a reference to any party includes that party’s executors, administrators,

successors and permitted assigns.

• a provision of or a right created under this contract may not be:

(i) waived, except in writing signed by the party granting the waiver, or

(ii) varied, except in writing signed by the parties.

• the rights, powers and remedies provided in this contract are cumulative

with, and are not exclusive of, the rights.

July 2020

Consumer Building Guide

Mandatory information for consumers

Builders and tradespeople must give you a copy of

this guide before entering into a contract for residential

building work that costs more than $5,000. Read this

guide to help protect your rights, carry out your

responsibilities and support your building project.

Protecting consumers under home

building laws

NSW Fair Trading is the NSW Government

agency regulating residential building work (including

building or trade work on single dwellings, villas, houses

and home units) under the Home Building Act 1989.

What to consider before work starts

Licensing

Licensing requirements include:

●

tradespeople and builders carrying out residential

building work valued at more than $5,000 must be

licensed by NSW Fair Trading (check a

licence on the Fair Trading website or by calling 13

32 20)

●

regardless of the work's cost, a licence is always

required for specialist work (like plumbing, air

conditioning and refrigeration, electrical work

and gasfitting)

●

if the work requires more than one tradesperson,

you need a builder to manage the building project

and

co-ordinate the tradespeople, such as plumbers,

painters and carpenters.

Home Building Compensation Scheme

The State Insurance Regulatory Authority (SIRA)

regulates home building compensation (HBC) cover in

NSW. HBC cover is required where work is worth more

than $20,000 (including labour and materials). The

builder or tradesperson must give you evidence of HBC

cover before they start work on your project or you pay

them any money, including a deposit. For more

information or to check the validity of your

cover, visit sira.nsw.gov.au or call 13 10 50.

Approvals

To help your building project go smoothly:

●

check with your local council or an accredited private

certifier on approvals your building work needs

●

engage a building certifier. This is your responsibility,

not the builder´s.

Contracts and payments

All contracts must be in writing. The two main

contract types are:

●

fixed price or lump sum - where the builder or

tradesperson agrees upfront to a fixed amount for

the whole job. Unforeseen changes during

construction may affect the final cost

●

cost plus contract - there is no guaranteed final

cost for the job (often this contract is used

where the project's nature prevents the final cost

from being calculated). The consumer repays the

builder for verified direct and indirect costs and fees

at regular intervals. It is good practice for the builder

to give a non-binding estimate before starting, and

track costs with you against the project's budgeted

estimate.

Residential building work worth less than $20,000 must

be done under a 'small jobs' contract. The written

contract must be dated and signed by, or on behalf of,

each party. It may specify that work be paid for at regular

intervals. It must contain:

●

the parties' names, including the name of the holder

of the contractor licence as shown on the contractor

licence

●

the number of the contractor licence

●

a description of the work

●

any plans or specifications for the work, and

●

the contract price, if known.

Resid

ential building contracts and contracts for specialist

work valued at more than $5,000, which require a certifier,

must (unless you are a developer) include terms about your

freedom to choose your own certifier. The contractor must

25 of 29

July 2020

also give you prescribed information about certifiers,

published by Fair Trading, before entering into a contract.

It is an

offence for a contractor to unduly influence your

choice of a certifier or object to your choice. Examples of

undue influence include:

 making it a requirement of the contract that a

specified certifier or class of certifier is or isn’t

appointed

 offering to change the contract price if a specified

certifier or class of certifier is or isn’t appointed

 refusing to carry out work under the contract if a

specified certifier or class of certifier is or isn’t

appointed.

Residential building contracts regarding work

worth more than $20,000 requires a full home

building contract. As well as all of the requirements

of the 'small jobs' contract, it must include other

comprehensive information such as the details of

the statutory warranties the builder must provide,

the cost of any applicable HBC cover and the

contract price or warning that the contract price is

not known. The contract must also include a

checklist prescribed by Fair Trading. Find a

complete list of contract requirements on our

website.

All contracts over $20,000 in value must have a

progress payment schedule. Progress payments must

match the work carried out and, for cost plus contracts,

be supported by receipts or other verifying documents.

Any change you need to make to a contract is a

'variation'. Variations must be in writing and be signed

by both parties to the contract. Almost all will impact the

contract price.

The maximum deposit you can be asked to pay

before work starts is 10%.

Common traps and tricks

Beware of:

●

an extremely low quote compared with others. This

may indicate the job's quality is being compromised,

or that the builder may not fully understand what is

required

●

`sales pitches´ putting pressure on you to sign

a contract quickly to avoid a price increase

●

a builder who recommends you get an owner-builder

permit while they organise all the building work. The

builder may be trying to avoid responsibility and may

not have the right kind of licence or HBC cover.

When things go wrong

Statutory warranties

Builders and tradespeople must guarantee that their work is

fit-for-purpose, performed diligently and delivered in a

reasonable timeframe, in line with the contract. Unless

otherwise specified, materials should be new and

appropriately used. These warranties are time-limited: legal

proceedings to enforce them must be

commenced within 6 years for major defects and 2 years

for all other defects. There is another 6 months for both

warranty periods if the defect only became apparent after 18

months or 5 and a half years. Find out more about these

warranties on the Fair Trading website.

Resolving a dispute with your builder or

tradesperson

These steps can help you resolve a dispute:

●

you must notify your builder or tradesperson and

discuss concerns as soon as you become aware of a

problem. Follow up with an email or letter

●

understand acceptable work standards by

downloading the Guide to Standards and

Tolerances from our website

●

contact Fair Trading for free dispute resolution if

you and your builder or tradesperson are unable to

resolve the dispute

●

lodge a claim with the NSW Civil and

Administrative Tribunal (NCAT) if you remain

unsatisfied with the dispute resolution outcome

●

protect your rights under the HBC Scheme: contact

your insurer or provider as soon as you become

aware of defective or incomplete work.

Home building compensation disputes

For help resolving disputes with a HBC insurer or

provider, visit the SIRA website sira.nsw.gov.au or call 13

10 50.

24 of 28

26 of 29

July 2020

More information

Visit the Fair Trading website to:

●

learn more on your rights and responsibilities and

the statutory warranties

●

do an online licence check to verify a builder or

tradesperson´s licence details

●

find out about dispute resolution

●

download free home building contracts

●

subscribe to enews.

www.fairtrading.nsw.gov.au

Fair Trading enquiries 13 32 20

TTY 1300 723 404

Language assistance 13 14 50

This fact sheet must not be relied on as

legal advice. For more information about

this topic, refer to the appropriate

legislation.

We encourage the reuse of this information under the Creative Commons Attribution 4.0

licence. See NSW Fair Trading's copyright policy at www.fairtrading.nsw.gov.au

27 of 29

28 of 29

Contractor

initials

Owner

initials

Record of adjustments

and variations

(This is not part of the contract)

Contract price stated in contract (Clause 1)

(includes amounts listed in Provisional Sums Schedule)

Adjustments (if any)

Provisional sums (Clause 10) and Prime Cost items (Clause 11)

Items

Clause

(10 or 11)

Sum

allowed

Actual

amount

Adjustment

(+ or –

amount)

$ $ $

Total

Variations (Clause 13)

Date agreed Brief details

Additional or

deleted cost

(+ or –

amount)

1 / / $

2 / / $

3 / / $

4 / / $

5 / / $

6 / / $

7 / / $

8 / / $

9 / / $

10 / / $

Total

Use this space to keep

a record of adjustments and

variations to the contract.

0.00

29 of 29

Contractor

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Owner

initials

Payments made

(This is not part of the contract)

Payments made

Date agreed Stage Amount

/ /

Deposit

/ / $

Total

Notes

Use this space to keep

a record of payments made.

In all cases a written receipt for

a payment should be obtained.

0.00

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