Construction Law Updates
Collecting the cash
No. 807 – 1 November 2008
Statutory demands are powerful tools in collecting cash where there is no dispute that money is owed. Even if there are competing claims and counterclaims, the Court can decide there is no dispute about a portion of the amount and refuse to set aside the demand for the undisputed amount. Statutory demands can be served for amounts in excess of $2,000.
Calling on the guarantee
No. 806 – 1 September 2008
Performance guarantees are virtually blank cheques in the hand of the owner unless there are clear words in the contract and the guarantee that restrict the right of the holder to call upon the guarantee.
The Dream Client
No. 805 – 1 August 2008
Building consultants need to be aware of the requirements of AS4349 and ensure that they comply with them, or deal with them in their contract. AS4349 is now the benchmark for the common law duty of care of inspectors.
Does the Superintendent have to be fair?
No. 804 – 1 July 2008
A recent Queensland Supreme Court Decision examines the role of the Superintendent where the building contract has been amended to give the Superintendent an absolute discretion and does not require the Superintendent to act fairly and honestly.
Summary judgment on architect’s certificates
No. 802 – 1 April 2008
Standard form contracts are commonly used in the building and construction industry. This case highlights one of the great advantages of using standard form contracts – that of relative certainty.
What is practical completion?
No. 801 – 1 February 2008
A recent decision of the District Court of South Australia ([2007] SADC 137) provides an interesting insight into the legal meaning of the term “practical completion” as applied to a residential housing contract.
Adjudication News
No. 710 – 1 December 2007
In the last 10 years or so, adjudication has been widely accepted in the construction industry around the world as a means of resolving payment disputes during construction. South Australia is now the only mainland Australian State without adjudication legislation.
Deals on the side
No. 709 – 1 September 2007
Commercial contracts must be written down in clear language for parties to have certainty as to their agreement. If the parties are in genuine agreement, there is no sensible excuse for reluctance to commit to writing.
Damages for defective work
No. 708 – 1 August 2007
What damages should a builder of defective work pay when the project has been sold without proven loss to the owner?
Construction management off the rails
No. 707 – 1 July 2007
This case is a good example of a professional organisation capably prosecuting its claim and defending an apparently unmeritorious counterclaim. Regrettably, it is not uncommon for contractors to become involved in litigation in circumstances that, on the facts, do not appear to warrant a lengthy dispute. In some instances, disputes are unavoidable.
A sea change on coastal views
No. 706 – 1 June 2007
A recent decision has made it clear that the definition of “amenity” includes the private views enjoyed by existing residents. The decision sets a new benchmark in terms of the value of existing views. It is likely to have an impact on the value of coastal property.
Co-operative contracts and estimated cost blowouts
No. 704 – 1 April 2007
The construction industry has seen a growing trend towards co-operative contracting, such as cost plus contracting or management contracting. In these contracts, a cost estimate is normally prepared as an indication of the total project cost.
Misleading tender documents – fixed price contract
No. 703 – 1 March 2007
Notwithstanding the general principle that parties are bound by the terms of their contract, where a party is led to enter into a contract by misleading or deceptive conduct, the damages that flow from that conduct can be recovered.
No contract – no payment?
No. 702 – 1 February 2007
It is preferable to have a binding written contract in place for a building or engineering project. If such a contract is in place, it alone will govern the terms upon which the builder or contractor is entitled to be paid. However, if there is no binding contract in place, a builder or contractor may be able to recover from the owner under the principles of unjust enrichment and quantum meruit.
Downlight causes fire
No. 701 – 5 January 2007
The general principles for recovering damages for breach of contract in Australiaas set out in Hadley v Baxendale and Baltic Shipping remain unchanged. When entering into a contract, parties should carefully consider the likely consequences of any breach and make a determination as to their exposure.
When one bore hole is not enough
No. 611 – 1 November 2006
A recent decision of the Victorian Supreme Court in Barton v Stiff has examined the liability of a designer and builder of a home in relation to significant defects in the home that arose from inadequate design and inappropriate choice of materials. The principle discussed has general application to designers and architects.
Not the oxy torch!
No. 610 – 2 October 2006
The Western Australian Supreme Court recently published its decision as to liability for a fire that caused extensive damage to Hamersley Iron’s railway and rollingstock maintenance facility at Dampier.
Demolish and rebuild?
No. 609 – 1 September 2006
The cost of careless design and negligent construction can take many years to emerge. In these circumstances, entities have often ceased trading or individuals have moved on. It is the
remaining players who are sought out by claimants.
Can an Estimate be Binding?
No. 608 – 1 August 2006
Price estimates are a common way for a contractor to attempt to ensure that there is some flexibility in relation to the actual contract price which will be charged once a binding contract is concluded. This is not always successful.
When is a Liquidated Damages Clause a Penalty?
No. 607 – 1 July 2006
Leighton Contractors entered into a contract with the State of Tasmania for the design, construction and maintenance of a bypass highway to the township of Hagley. The contract, for an amount of $30 million, included a liquidated damages clause entitling the State to retain $8,000 for each day that completion was delayed beyond the agreed date. Leighton was delayed in completion and liquidated damages were retained amounting to $1.8 million.