Unfair terms in construction contracts

 

The Australian Consumer Law extended its unfair contract terms to small businesses in 2016, which may have since affected the way builders and head contractors use standard form contracts to engage subcontractors or independent contractors. Some recurring terms in standard construction contracts that might be deemed unfair when contracting with a small subcontractor could include:

  • Indemnity clauses that excessively extend liability to the subcontractor beyond what would reasonably be necessary to protect the head contractor against loss or damage.
  • Liability clauses that exclude or disproportionately limit the liability of the main contractor even if they are partially at fault.
  • Termination clauses allowing for the head contractor to cancel the agreement at any time ‘for convenience’
  • Time bars that may give onerous time frames and notification procedures for subcontractors to make claims for any time variations

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