Your on site and receive a revised contract drawing from the owner who says "I'd like you to build to this". The drawing adds to, and omits from, the original contract work.
Law in Point
NSW Home Building Act 1989 (HBA)
The HBA applies to the residential building industry. Section 7E(1) provides that a contract to do residential building work must include (and is taken to include) the terms set out in Part 1 of Schedule 2 of the HBA.
Clause 1 (2) of Part 1 of Schedule 2 includes a term that "any agreement to vary this contract, or to vary the plans and specifications for work to be done under this contract, must be in writing signed by or on behalf of each party to this contract" (Signature Requirement).
The Signature Requirement does not apply to residential building contacts with a developer (Section 7AA HBA).
Standard Form Contracts
The Signature Requirement is, for example, found in:
Clause 1 of the NSW Government Home Building Contract for Work over $20,000; and
Clause 1 (c) (ii) of the Master Builders Residential Building Contract BC4.
Signature
Legislation, standard contract terms and good contract administration require both the owner and the builder to sign a document to record their agreement to vary the original contract drawings. Unless signed the:
Builder will not have a contractual right to increase the contract sum for additional work shown in the altered drawing; and
Owner will not have a contractual right to decrease the contract sum for omitted work shown in the altered drawing.
If a disagreement arises as to what is, or is not, a change to the original contract drawings, the self help dispute procedures in the building contract should be used to resolve the matter before resorting to costly litigation before tribunals and courts.
Phontos Legal
Provides an In-House understanding to the cashflow risks of running construction and development projects gained from 30 + years advising builders and developers, running construction contracts of over 120 + units in size and managing projects valued at $250 + million.
Lets Chat
Email us with your available time(s) to arrange a no obligation chat by phone or by video. We don't charge for our first meeting whilst we learn about your contracts:
(02) 9159 9095 www.phontos.com.au
