Submissions on the ‘Better Payment Outcomes’ discussion paper, released by the QBCC, closed yesterday.
We anticipate that developers and principals will respond by:
- amending clause 5 of Australian Standard contracts to allow security to be converted “immediately” following the provision of notice to prevent an injunction;
- (a) a termination for convenience clause exists; and
(b) there is no further reference date after termination for convenience,
- obtain legal advice on the validity of any preconditions to the right to lodge a payment claim, or to reference dates arising (for example, the provision of a statutory declaration or other documentation required to assess the claim);
- requiring a signed deed of release as a precondition to the contractor achieving PC or FC, to prevent contractors and subcontractors from lodging an adjudication application after PC;
- ensuring that the superintendent has the right to grant EOTs at the superintendent’s absolute discretion (whilst being under no obligation to do so) so that:
(a) an adjudicator or court cannot exercise the discretion in favour of the contractor or subcontractor to award time-barred EOT claims; and
(b) the Principal’s / Developer’s entitlement to liquidated damages is preserved;
- excluding the operation of the prevention principle, as an additional safeguard of the Principal’s / Developer’s entitlement to liquidated damages;
- ensuring that contracts adequately protect and define the parties’ rights (especially those belonging to third parties, including subsequent purchasers) and liabilities in relation to pure economic loss for latent defects.
- amending the contract to ensure there is nothing preventing a Principal from converting security immediately after receiving and unfavourable adjudication decision. This strategy can, in effect, negate an adverse adjudication decision.