Seven things Developers must change in their construction contracts

With the new BCIPA amendments now in force and a number of recent Supreme Court decisions dealing with BCIPA and the QBCC Act, it is essential that Developers amend their contracts as follows:

  1. Amend clause 5 of Australian Standard to allow security to be converted “immediately” following notice being provided (the 28 day notice period in the QBCC Act will not affect this).
  2. Decide on a process when payment claims are over $750,000, and make a decision on whether the payment schedule under BCIPA and/ or the certificate under the contract will:

    (a)  be due 15 business days from receipt of a payment claim (which will be the same day as payment is                 due!); or
    (b)  be due 10 business days from receipt of a payment claim, to reflect our recommendations (as was the              previous position).

  3. Ensure that any termination for convenience clause survives termination. This should deprive the contractor of any more reference dates to lodge a new BCIPA claim and defeat any BCIPA claim for work carried out after the last reference date and up to the date of termination.
  4. Ensure that any preconditions to payment claims (i.e. statutory declarations and other documentation required to assess the claim) are phrased as preconditions to the reference date under the contract accruing rather than linked to the right to lodge a claim.
  5. Require a signed deed of release as a precondition to the contractor achieving practical completion. A further deed of release should also be obtained at final completion to ensure complete contract close out. This should stop vexatious BCIPA claims between PC and FC.
  6. Ensure any clause allowing the superintendent to grant EOTs at the superintendent’s discretion, is to be limited to the superintendent’s absolute discretion, while being under no obligation to do so and for the benefit of the principal only. This will mean that time bars are effective.
  7. Include a clause excluding the “prevention principle”. This should mean liquidated damages still apply if an EOT claim is made out of time even if the principal caused the delay.

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