The modern construction landscape is regulated by standard form contracts. Gone are the days of competing terms and conditions. Now, we work with the same base-plate, but spend hours trading “shalls” for “musts”, and “subject tos” with “except in the circumstance ofs”.
Most law firms will have a sophisticated suite of amended “principal friendly” and “contractor friendly” forms. The challenge is in knowing which version to take to your first client meeting!
Some of you may have read legal alerts in the last few weeks in relation to a proposed new form of contract to replace the current AS 4000-1997 series and the “old favourite” AS 2124-1992 series. Under the proposed revision, the two existing standards are to be merged into a new suite of standards, AS 11000: general conditions of contract.
The draft AS 11000 was prepared under the guidance of Standards Australia Technical Committee MB-010, by a drafting team comprising representatives from regulatory bodies, public authorities and various industry groups, including the Society of Construction Law and the Civil Contractors Federation of Australia.
In the lead up to finalisation of the current draft, public forums were held in Sydney and Melbourne, and subcommittees worked through key issues raised at those forums, including:
- risk allocation;
- good faith;
- extensions of time;
- payment provisions;
- impact of the various Security of Payment Acts on the general conditions; and
- dispute resolution.
The proposed new general conditions of contract are intended to “provide a broadly balanced approach to risk allocation in language which is focused on brevity and certainty”, says Professor Bailey, Chair of Technical Committee MB-010. From the outset, the document is easier to read; with clearer paragraph numbering, and the simplification and consolidation of defined terms.
There is also new emphasis placed on dispute avoidance and pro-active contract management through early warning procedures based upon an express good faith obligation. These measures will be further bolstered by a proposed separate standard AS 11001 on dispute resolution which will operate as a companion to AS 11000.
A summary paper on the key changes from the AS 2124 and AS 4000 series can be accessed here and a full version of the draft standard is available for download via SAI Global.
It is likely that AS 11000 won’t be published for a number of months, and that we won’t see implementation of the standard in the industry for some time after that. However, I recommend that you review the new general conditions of contract proposed by Standards Australia, and take some time to question whether the contracts you’re currently working under are delivering upon your project and corporate needs.
If you’re interested in a practical conversation about the new standard, contract formation, administration and dispute management generally, contact Kevin Moore of the APP Contracts, Claims and Disputes team.