The DO’S and DON’TS of Administering Building Contracts
In the Building and Construction industry there are many instances where our Building and Construction Law team have seen contracts being administered incorrectly or not in accordance with its terms, where the Builder has acted on promises of good faith, workmanship and a good old-fashioned handshake.
Despite a Builder’s confidence in the job and their client, it is vital that the building contract is followed and that all changes are set out in writing. The same rules should apply regardless of who the building works are being carried out for including acquaintances, family and friends.
Below we detail a list of some of the DO’s and DON’TS for Builders to be mindful of when administering contracts to help minimise the risk of future disputes:
- DO ensure the standard contract terms are correct and relevant.
- DO ensure that the scope of works is set out clearly and correctly in the contract.
- DO ensure the contract is dated and a completion date is set.
- DO ensure the contract is signed by all parties.
- Do ensure that any change to the contract or the scope of works or any “extra” job requested by the client, which is regarded a variation to the contract is put in writing and signed by all parties. Make sure the variation clearly describes the nature of the change, the cost and time impacts of the change.
- DO ensure that all extension of time requests in relation to the job are made in writing and signed by all parties.
- DO ensure that invoices are issued in accordance with the contract including all relevant documents being attached.
- DO ensure that procedures set out in the contract for recovering payment of invoices are followed correctly.
- DO keep a site diary with all notes relating to the job, time sheets of Builders and Sub-contractors and record all discussions with the client.
- DON’T contemplate carrying out any varied works unless the variation form is executed.
- DON’T carry out any building works without holding the correct licences, building permits, DA approvals and/or any other required council approval.
- DON’T under quote for the scope of works set out in the contract.
- DON’T discard any paperwork relating to the building contract for an extended period of time, noting that your liability as a builder extends beyond the “defects liability period”.
- DON’T terminate the contract incorrectly. If you are experiencing issues, seek immediate legal advice.
- DON’T lodge a claim against your client prematurely. Always seek legal advice.
While the above is not an exhaustive list of the DO’s and DON’Ts, you should note that in some circumstances, disputes are unavoidable, even if you follow the basic procedures.
If you have any concerns in relation to your current contracts or questions in relation to any future contracts, you should contact the Commercial Litigation Team at Watkins Tapsell Solicitors to discuss.