Christmas time is almost here and many people are now looking
forward to 2017. As such, many developers become complacent about
their contract management, with potentially disastrous
consequences. In that regard we note that some standard contracts
deem payment to be due and owing1 (or admitted in the
case of extension of time claim2) if claims are not
responded to within a defined contractual timeframe.
In order to avoid problems, now is the time to perform a triage
on your projects in order that you don't stub your toe this
First, carefully review your contracts to ensure that you know
when you should be receiving claims from your contractors and, more
importantly, how long you (or possibly the superintendent or
principal's representative) will have to respond to claims. In
undertaking that review, pay careful attention to the definition/s
of 'day' and 'business day' contained in the
contract. Whilst the amendment to the definition of 'business
day' the Building and Construction Industry Payments Act
2004 (Qld) (Act) may be relevant in some
circumstances (for example working out when a contractor can make
an adjudication application), it will not necessarily affect the
date by which you are required to respond to payment claim made
under the Act, nor will it necessarily affect the date by which you
are required to respond to claims made exclusively under the
contract and other types of claims (for example for extensions of
time and variations)3.
Second, establish a plan in relation to any anticipated claims.
Are there steps which you can take now in order to avoid claims,
for example, can your superintendent superintendent/principal's
representative immediately issue a certificate which fixes your
liability4? Can we start preparing the certificate now
in anticipation of the claim? Will we actually dispute a claim if
it is less than a certain value?
Third, ensure that you have sufficient human resources on
standby in the event that a claim is made over the festive season.
Ask yourself questions like, is my superintendent/principal's
representative available to prepare a response to a claim that we
might receive? Is my lawyer available to assist with a payment
schedule/response to a claim?
Remember, proper preparation prevents poor performance (and
ensures that you will have a restful Christmas break).
1 For example clause 37.2 of AS4902-2000;
clause 14(d) of Master Builders LSC2 Commercial Building
2 Clause 22 (d) of Master Builders LSC2
Commercial Building Contract
3 For example, in the Master Builders suite of
contracts, the term 'business day' does not exclude 2
– 10 January (which are excluded days under the
4 Clause 37.2 of AS4902-2000
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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