Terms and Conditions of Contract
Published 01 July 2014
1. Statutory Warranties
The contractor warrants that:
- The work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in this contract.
- 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.
- The work will be done in accordance with, and will comply with applicable Australian Standards including the Building Code of Australia and the Australian Standard Wiring Rules and any other applicable laws.
- The work will be done with due diligence and within the time stipulated on the first page of this contract or, if no time is stipulated, a reasonable time.
- The work will result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling.
- The work and any materials used in doing the work will be reasonably fit for the specified purpose or result notified by the principal to the contractor that the principal desires the work to achieve so as to show that the principal relies on the contractors skill and judgement.
The contractors liability for a failure to comply with a statutory warranty set out above shall not apply if the failure relates solely to a design or specification prepared by or on behalf of the principal/proprietor (but not by or on behalf of the contractor) or a design or specification required by the principal/proprietor, if the contractor has advised the principal in writing that the design or specification contravenes the Building Code of Australia or the Australian Standard Wiring Rules. The contractor also will not be responsible for the quality or suitability of materials supplied by the principal/proprietor.
2. Plans and Specifications
All plans and specifications for work to be done under this contract, including any variations to those plans and specifications are taken to form part of this contract.
3. Contract Price and Payments
The contract price (subject to any agreed variations) is as identified on the first page of this contract. If no contract price is known, the contract price shall be determined on the basis of the labour rates and contractor’s margin for profit, overheads, supervision and materials supplied as set out on the first page of this contract. The principal must pay the contract price in the manner shown in the payment schedule and within 5 business days of receiving a written request for payment.
Either party may seek to vary the work to be done under this contract. Any agreement to vary this contract, or the plans and specifications attached to this contract, must be in writing and signed by or on behalf of each party to this contract. Other than for urgent work, before commencement of work on any variation the contractor must provide a notice to the principal containing a description of the work, a price for the work (including a margin for profit, supervision, overheads and materials of 20%) and any resultant changes to the completion period. The notice must be agreed and signed by both parties before commencement of work. The price of the agreed variation will adjust the contracted price.
5. Recovery of Damages
The Contractor shall be entitled to recover from the Proprietor damages sustained and incurred as a result of delay in the progress of the Works by any cause or causes beyond the control of the Contractor being an act, default or omission on the part of the Proprietor, the Architect, any Separate Contractors, employee or agent of the Proprietor.
6. Time for Completion and Extensions of Time
The contractor must complete the work within the contract completion period. The contractor will be entitled to a reasonable extension of time in the event of delays to the work where the cause of the delay, including but not limited to inclement weather, industrial disputes or contract variations, is beyond the contractor’s control. The contractor and the principal must take all reasonable steps to minimise the delay. Any claim for an extension of time must be notified to the principal in writing within 10 business days of the event occurring.
7. Site Conditions and Underground Services
In the event that the contractor encounters latent conditions including that of underground cables, pipes or conduits or other artificial objects not reasonably foreseen or not disclosed at tender stage then any addition or omission will be treated as a variation to the contract price. All excavations will be undertaken by machine unless otherwise stated or stipulated.
8. Access for Contractor, Employees and Agents
The principal must provide access for the contractor and any employee, subcontractor or agent of the contractor to carry out the work as required during working hours allowed by relevant statutory authorities. The principal must remove any property likely to impede the work of the contractor.
9. Insurance of Work and Personal Injury
Before commencement of any work under this contract and throughout the duration of this contract the contractor will provide ongoing insurance cover for:
- Public liability to cover liabilities to third parties for death or personal injury or damage to property for an amount not less than $5 million.
- Employer’s liability and worker’s compensation insurance to cover employees and all relevant contractors.
- Home warranty insurance (where applicable) to cover defective and incomplete work.
10. Contractor’s Indemnity in Favour of Principal
The contractor will indemnify the principal against any liability for death, personal injury or property damage arising out of the work, except to the extent that the principal, principal’s representative or persons under the control or direction of the principal contributed to the liability.
11. Damage to Property
The contractor will make good any loss or damage to the work or property of the principal caused by the contractor or the contractor’s employees, agents or subcontractors. The principal must remove any furniture or goods from the vicinity of the work to minimise the risk of damage.
The principal must notify the contractor in writing of any omissions or defective work or materials that become apparent within a defects liability period expiring 13 weeks from the date the work is completed. The contractor will promptly (but no later than 10 business days) make good the defective work or materials at the contractor’s own expense.
13. Cleaning Up
On completion, the contractor will remove from the site all plant and equipment and all rubbish and surplus material relating to the work. All demolished and surplus material will become the property of the contractor unless otherwise specified.
If the principal or contractor consider a dispute has arisen in relation to any matter covered by this contract, that party must give the other party written notice of the items of dispute. The parties may confer with a mutually agreed third party to assist to resolve the dispute by mediation. If the dispute relates to workmanship and cannot be resolved either party may refer the matter to the Office of Fair Trading.
15. Termination of Contract by Principal
If the contractor is placed under administration or goes into liquidation or declared bankrupt or fails to complete the work within an agreed time, or if no time is given, within a reasonable time, fails to remedy defective work or replace faulty or unsuitable materials, then the principal may, where such default can be remedied, issue a written notice requiring the contractor to remedy the default within 10 business days. If the default is not remedied, or not capable of being remedied, the principal may terminate the contract by written notice.
16. Termination of Contract by Contractor
If the principal fails to make payment due under the contract or fails to provide satisfactory evidence of title of land and/or capacity to pay the contract price, including variations or denies access to the site or specific work areas that prevents the contractor from proceeding, the contractor may issue a written notice requiring the principal to remedy the default within 10 business days. If the default is not remedied, the contractor may suspend or terminate the contract by written notice.
17. Provisional Cost Items
A Provisional Cost (PC) is used when the cost of specific item/s is yet to be determined. A PC is then allowed for the purchase of item/s. If the actual cost of item/s is greater than the sum allowed in the contract, the excess amount together with the contractor’s profit margin shall be added to the contract price. If the actual cost is less than the sum allowed in the contract, the contract price shall be reduced by the lesser amount. The contractor’s margin for profit, overheads and supervision shall be 20% unless otherwise agreed.
Ownership of Materials
The ownership of all materials supplied by the contractor as part of the contract works shall transfer to the proprietor upon integration into the building or project.
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