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Conditions of Contract and Statutory Warranties


The use of a written contract is required by law for any home building work valued at more than $5,000.

The contractor must provide the owner with a certificate of home warranty insurance (HWI) (now known as the Home Building Compensation Fund) if the budget exceeds $20,000 (including the cost of materials supplied by the owner or another person) before the commencement of work and before demanding or receiving any payment.

The Act also requires a contractor to provide the consumer with a copy of the “Consumer Building Guide” when entering into a contract.  Office of Fair Trading (website document)(reference FT246).

1. Standard of Work

The contractor must carry out the work in a proper and workmanlike manner and in accordance with the plans and specifications, the relevant Australian Standards and requirements of the Home Building Act and other statutory authorities.  All materials supplied by the contractor will be good and suitable for the purpose for which they are intended and unless otherwise stated in the contract, will be new.

For the purpose of the statutory warranty for materials supplied, the contractor relies upon the manufacturer’s warranty period and for their suitability of purpose.

2. Completion and Extension of Time

The work will be done with due diligence and within the time stipulated in the contract or if no time is stipulated within a reasonable time.  The contractor will be entitled to a reasonable extension of time in the event of delays to the work where the cause of the delay is beyond the contractor’s control.  The contractor and the owner must take all reasonable steps to minimise the delay.  Any claim for an extension of time must be notified to the owner in writing.

3.  Variations

Work completed according to instructions which require subsequent modifications shall be undertaken at the same rates as quoted for the original work.

4. Site Conditions and Underground Services

The budget (if any) is based upon an inspection of the site where the work is to be carried out, or if no such inspection is required, then upon the details provided in the tender or enquiry documents.

In the event that the contractor encounters latent conditions including that of underground cables and conduits which may cause a substantial increase in the price of the work to be done then the contractor must as soon as practical advise the customer of the unforeseen problems.

5. Access for Contractors

The owner must provide access for the contractor and any employee or subcontractor of the contractor to 

carry out the work as required during working hours allowed by relevant statutory authorities.


The owner must remove any personal property likely to impede the work.

6. Insurance of Work and Personal Injury

The contractor must have current insurance cover for:

- Public liability and products liability insurance to cover liabilities to third parties for death or personal injury or damage to property for an amount not less than $10 million;

- Workers’ compensation insurance to cover employees;​

 If requested the contractor must provide the owner with proof that all such relevant insurances have been taken out and are current.

7. Contractor’s Indemnity in Favour of Owner

The contractor will indemnify the owner against any liability for death, personal injury or property damage arising out of the work, except to the extent that the owner, or owner’s representative contributed to the liability.

8. Damage to Property

The contractor must make good any loss or damage to the work or property of the owner caused by the contractor or the contractor’s employees, agents or subcontractors. The owner must remove any furniture or personal goods from the vicinity of the work to minimise the risk of damage.

9. Defects

The contractor must make good any omissions or defect in the work or materials which become apparent within the period of 13 weeks from the date the work is completed.  The owner must notify the contractor in writing of any work or materials to be rectified or replaced prior to the expiry date of the 13 week period.  The contractor must promptly make good the work or materials at the contractor’s own expense.

10. Cleaning Up

On completion, the contractor must remove from the site all plant and equipment and all rubbish and surplus material relating to the work.  All demolished and surplus material will become the property of the contractor unless otherwise specified.

11. Disputes

If the owner or contractor considers a dispute has arisen in relation to any matter covered by this contract, that party must give the other party written notice of the items of dispute.  If the dispute cannot be resolved with the help of a mutually agreed third party, either party may refer the matter to the NSW Civil and Administrative Tribunal (NCAT).  Parties should refer to the Consumer Building Guide issued by the Office of Fair Trading and in the preamble of this document

12. Termination of Contract

If the contractor is placed under administration or goes into liquidation or declared bankrupt or fails to complete the work within an agreed time, or if no time is given, within a reasonable time, fails to remedy defective work or replace faulty or unsuitable materials, then the owner may, where such default can be remedied, issue a written notice requiring the contractor to remedy the default within 10 working days.  If the default is not remedied, or not capable of being remedied, the owner may terminate the contract by written notice.

If the owner fails to make payment due under the contract or denies access to the site to the contractor to prevent the work from proceeding, the contractor may issue a written notice requiring the owner the remedy the default within 10 working days.  If the default is not remedied, the contractor may suspend or terminate the contract by written notice.

13. Prime Cost Items

Prime cost (PC) items when included in the contract refers to the cost of supply of those which are described and for which only installation costs are included but the actual cost of the items have yet to be determined. If the actual cost of an item to the contractor is greater than the sum allowed in the tender documents, the excess amount together with the contractor’s profit margin on the excess shall be added to the budget price.  If the actual cost is less than the sum allowed in the tender documents the difference shall be deducted from the budget price.  The contractor’s profit margin which specifically excludes labour costs, overheads and supervision shall not be more than 20% unless otherwise agreed.

14. Warranties – The Contractor Warrants:

If the work consists in make alterations or repairs or additions, the resultant work will leave the dwelling fit for occupation.

If the owner makes known to vary the contractual arrangements for a particular purpose or to achieve a result, the contractor in agreeing to undertake the work must be aware that the owner relies on the contractor’s skill and judgement.

Proceedings for a breach of warranty must be commenced within 2 years after:

(i) The completion of the work; or

(ii) If the work is not completed

a) The date for completion of the work specified or determined in accordance with the contract; or

b) If there is no such date, the date of contract.

These warranties do not in any way reduce or limit the contractor’s obligations in relation to workmanship, materials, completion or other matters specified in Clause 1 or elsewhere in this contract.  No provision of this contract can reduce, restrict or remove statutory warranties, except as contained in the manufacturer’s warranty.

15. Cooling Off Period

If the budget price for the cost of labour and materials is more than $20,000 the contract is subject to a cooling off period of 5 business days after the customer has been given a copy of the signed contract or 5 days after becoming aware that a signed copy of the contract should have been provided

16. Overdue Accounts

Accounts overdue by 30 days incur a 6% administration fee. If we incur any costs of collection, such as legal fees and collection agency fees etc., you agree to indemnify us for all such costs. Terms of trade must be agreed to prior to commencement of sales transactions between The Business and The Customer.

T&Cs: Text
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