REALWorld Law

Construction

Obligatory requirements

Are any terms and conditions imposed or implied by law or mandatory in contracts for the design or carrying out of building works?

Australia

Australia

The Building Code of Australia has been given the force of statute in each State and territory. The BCA is a performance-based document and contains technical provisions for the design and construction of buildings and other structures, covering such matters as structure, fire resistance, access and egress, services and equipment, and energy efficiency as well as certain aspects of health and amenity. All work carried out in Australia must comply with the BCA. This is usually assessed by one of the bodies responsible for signing off on the building works, such as the building surveyor.

Certain provisions are implied into construction contracts by case law and statute.

There is Security of Payment (SOP) Legislation in all states and territories which gives a party to a construction contract the right to refer a dispute in relation to payment to adjudication provided the relevant Act has been ‘triggered’ by the payment claim.

In some states, legislation operates to imply certain warranties that the contractor will use materials that are reasonably fit for the purpose for which they are to be used (whether or not that is a purpose for which the materials are commonly supplied) and of good quality. However, these warranties are limited to residential work.

Australian Competition and Consumer legislation also implies certain warranties into contracts for services (for example that the services must be fit for a particular purpose) but this only applies to smaller contracts or consumer arrangements.

If a contract is silent in relation to liability for design, there is an implied term that the services will be carried out with reasonable skill and care. The burden of proof falls on the party claiming that the supplier of the service (design and build contractor, design sub-contractor or consultant) has failed to use reasonable skill and care.