Contracts are complex documents and are written for specific purposes. A contract can be a generic form of contact or a specifically written document for a specific project. In some circumstances a client can take a Generic form of contract like AS 4000 for example and rewrite particular clauses.
Below is a clause rewritten by a client for a specific project
Claim Subject to clause 34.3A, the Contractor shall be entitled to a reasonable extension of time for carrying out WUC, including reaching practical completion and / or for achieving any Milestone (as the case may require) (‘EOT’), if:
a) the Contractor is or will be delayed in reaching practical completion or a Milestone by a qualifying cause of delay; and
b) the Contractor gives the Superintendent, within 5 business days of when the Contractor should reasonably have become aware of that causation occurring, a written claim for an EOT evidencing the facts of causation and of the delay to WUC and any Milestone (including extent). The Contractor shall include in that claim a clear statement, by reference to the activities in the construction program, how the delay involves an activity which is, or by virtue of the delay becomes, critical to the maintenance of progress in the execution of the Works so as to delay the achievement of practical completion or any Milestone (as applicable). The Contractor shall also include in that claim:
i. a detailed statement of the facts on which the claim is based and documentary evidence;
ii. a comparison of the planned and as-executed critical path at the time when the delay occurred; and
iii. a precise identification of the activities affected and critical to the Contractor’s time schedule.
If the Contractor fails to give such a notice within the period required by this clause, the Contractor shall have no claim arising out of or in connection with any cause of delay or subsequent delays from the original delay which should have been so notified.
If further delay results from a qualifying cause of delay evidenced in a claim under paragraph (b) of this subclause, the Contractor shall claim an EOT for such delay by promptly giving the Superintendent a written claim evidencing the facts of that delay
1. Outline four areas within the above clause that could be identified as being unbalanced and give reasons why
2. Rewrite the clause or those areas that you believe are unbalanced or unfair so that the clause could be seen as evenly balanced towards all parties.
Part 2 – Home Warranty Insurance
Below is clause 39.2 from AS 4000. Provide a written explanation identifying how you as the contractor can ensure that they do not default on the contract addressing each point from A to E.
If the Contractor commits a substantial breach of the Contract, the Principal may, by hand or by certified post, give the Contractor a written notice to show cause.
Substantial breaches include, but are not limited to:
a) failing to:
i) provide security;
ii) provide evidence of insurance;
iii) comply with a direction of the Superintendent pursuant to subclause 29.3; or
iv) use the materials or standards of work required by the Contract;
b) wrongful suspension of work;
c) substantial departure from a construction program without reasonable cause or the Superintendent’s approval;
d) where there is no construction program, failing to proceed with due expedition and without delay; and
e) in respect of clause **, knowingly providing documentary evidence containing an untrue statement.
Different forms of projects require different types of contracts. A residential contract for works under $25,000 will not be used on a commercial building. The following questions require you to recommend a type of contract aimed specifically at the project.
1. Recommend two different types of contracts for the following types of projects
a) Residential project with a value of $50,000
b) Commercial warehouse with a value of more than $1 million c) High rise mixed use building with both Residential, Retail and Office with a value of more than $10 million
c) High rise mixed-use building with both Residential, Retail and Office with a value of more than $10 million
2. Using your recommendations above, propose what contract would you use and give reasons why? For the following projects also identify statutory and legislative requirements of using these contracts.
a) Commercial warehouse with a value of $5million
b) Residential house with a value of $300,000
3. Describe the process of creating a contractual situation from the point of submitting a Tender to signing a contract and identify each step using construction terminology. For each step also identify using the legal terminology