REALWorld Law

Construction

Parties to a construction or engineering contract

Typically, who are the parties to an engineering or construction contract or package of contracts and who is responsible to whom?

Australia

Australia

The main parties involved in a construction project are:

Employer/client/principal

This is the party procuring the work (typically, a land owner or land developer). In relation to building contracts, this entity is usually referred to as the employer or the principal. In relation to the contracts of appointment of the professional consultants, this party is commonly referred to as the client.

Contractor

A main building contractor is engaged by the employer to carry out and complete the works. This contractor will usually, in turn, engage sub-contractors to carry out and complete separate parts of the works. Contractors may also take responsibility for the design of all or part of the works they are to execute, depending on the procurement method and contract used.

Financier

This is the term used to describe the banks and other institutions and parties (for example, government or charitable organizations in the case of urban regeneration, infrastructure and cultural/sports projects) who provide finance to the employer towards the development (and require security in return). Depending on the size of the project, there might be a single bank or a syndicate of banks.