Most Read Contributor in Australia, September 2016
Standards Australia has recently released its proposed
replacement for the AS2124-1992 and AS4000-1997 construct only
forms of contract, the AS11000: General Conditions of Contract, for
The intention is that the popular AS2124-1992 and AS4000-1997
will be replaced by the AS11000, once its final form is decided.
While AS11000 contains some of the same risk allocation as
AS2124-1992 and AS4000-1997, there are significant differences in
the discussion draft, and the construction industry needs to
The stated objective of AS 11000 is to provide general guidance
for legal contracts in all sectors of industry, including
construction, engineering, health, manufacturing and
The Technical Committee that prepared the draft comprises
stakeholders from regulatory bodies, industry groups, law
associations and public authorities. It has indicated that the
AS11000 is intended to provide a broadly balanced approach to risk
allocation in brief and certain language, and to update the
standard form to take account of recent changes in legislation and
It is difficult to get an appropriate balance of risk in any
standard form, and in our view, if the AS11000 is finalised in its
current terms, both principals and contractors are likely to want
potentially significant amendments before using this standard form.
There is no information yet as to whether this will be possible, or
whether Standards Australia will issue the AS11000 in the same
unamendable format as the AS4122-2010.
Some of the key changes proposed in the draft AS11000 (compared
with AS4000) are as follows:
an overarching obligation of good faith, which is not defined,
on both parties
the inclusion of an 'early warning system' obliging
parties to notify each other and the Superintendent of an event or
circumstance that "may impact upon time, cost, scope or
quality under the contract and may become an issue" (akin to
the existing obligation in the NEC forms of contract)
all bills of quantity must be priced whether they form part of
the contract or not, and the Contractor is not entitled to payment
until the bills of quantity have been provided
the Contractor will be in substantial breach of contract if it
engages subcontractors for work over a specific value on terms
other than the unamended AS11002-2015 (amendments needed to reflect
the head contract are allowed, but nothing else)
the Contractor is entitled to an extension of time for any
delay occurring before the Date for Practical Completion which is
beyond their reasonable control
a party becoming aware of anything which will "probably
cause delay to the work under the contract must promptly and within
5 business days give the Superintendent and the other party written
notice of that cause and the estimated delay". If the
Contractor gives the notice, it must also state whether it
anticipates claiming an extension of time
the Superintendent must assess extension of time claims, or
request more information from the Contractor, within 20 business
days, failing which the date for practical completion will be
extended by the period claimed
rates or prices in the contract are now deemed to include
allowance for overheads and profit unless otherwise stated
notices can be served by email, meaning that parties must
ensure that their administrative processes are sufficient to deal
with issues such as security of payment claims.
Submissions on the draft AS11000 can be made to Standards
Australia. The closing date for submissions is Friday
27th March 2015.
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
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On 12th November 2016, new laws will commence to protect small businesses from unfair terms in standard form contracts.
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