Australian Standards Contracts for Small Builders in Residential Construction

There are numerous standard form contract templates available to small builders in the residential construction market including Australian Standard contracts. Small builders in the residential construction can use Australian Standard contract templates to perform their work. There are Australian Standard contract templates such as:

AS4000;

AS4902; and

AS 4305.

Should a Small Builder in Residential Construction use an Australian Standard Contract?

A notable study found that “the Australian Standard forms continue to dominate the Australian construction contracting landscape.” Although this article is limited to my personal experience with small builders in residential construction, one observation about that study is that it appears to be skewed toward affiliates with the University of Melbourne or members of the Society of Construction Law Australia or the Australian Construction Industry Forum. 

My experience is that my clients, who are small builders in residential construction, are not often university educated, especially not from the University of Melbourne and not members of the Society of Construction Law Australia or the Australian Construction Industry Forum. Rather, my experience is that residential builders are often TAFE educated and, if they hold membership, they are members with the Master Builders Association and Housing Industry Association.

In saying that, it is my experience that most small builders in the residential construction market use either the State Government’s Office of Fair Trading contract(s), Master Builders Association contract(s) or the Housing Industry Association contract(s).

5 Common Pitfalls with Australian Standard Contracts for Small Builders in Residential Construction

1.       The Australian Standard contracts are lengthy and they deal with many subjects that are beyond the requirements of a standard residential build.

2.       The Australian Standard contracts, due to their length and many subjects, can be intimidating to your average consumer. It is very often the case that a small builder’s client is a mum and dad.

3.       SAI Global are the licensors of the Australian Standards contracts in Australia. Unlike the MBA or HIA, SAI Global are not an industry association that provides free general advice on their templates. Small builders will likely need assistance from a lawyer to properly prepare an Australian Standard contract which will probably not be allowed for in the builders quote.

4.       Small Builders need to be familiar with the terms and conditions of any contract they sign. The length and many subjects of the Australian Standards contracts can make contract enforcement more difficult if the terms and conditions are not properly understood and followed.

5.       Australian Standard contracts are known to be commonly used for commercial contracting and less commonly used in residential construction.

There are numerous reasons why a builder would not use an Australian Standard contract for residential construction. We will dive into analyse the AS4000 contract template to provide further insight whether a small builder should use an Australian Standard contract.