Current STANDARD FORM CONTRACTS

Post date: Aug 03, 2019 4:8:50 AM

AS4904-2009 Consultants agreement – Design and constructAS2124-1992 and AS4000-1997 are currently the most widely-used Standards Australia produced General Conditions of Contract for construction projects.

AS4000-1997 is the current version of the Standards Australia General Conditions of Contract for Construction. AS4000-1997 (theoretically) superseded AS2124-1992 as the Standards Australia produced General Conditions of Contract for construction projects. AS4000-1997 (like its predecessor) is the basis of further hybrid General Conditions of Contract, in particular:

AS4000-1997 Construction Works

AS 4901-1998, Subcontract conditions

AS4902-2000 Design & Construct

AS4903-2000 Subcontract conditions for design and construct

AS4904-2009 Consultants agreement – Design and construct

AS4905-1996 Minor Works (Principal administered) --> AS 4905-2002 & AS 4905-2002/Amdt 1-2005

AS4906-1996 Minor Works (Supt administered)

AS4910-2002 Supply of equipment with installation

AS4911:2003 Supply of equipment without installation

AS4912-2002 Periodic supply of goods

AS4915-2002 Project management – General conditions

AS4916-2002 Construction management – General conditions

AS4917-2003 Construction management trade contract – General conditions

AS4919-2003 Asset maintenance and services (Superintendent’s version)

AS4920-2003 Asset maintenance and services (Principal’s version)

AS4921-2003 Provision of asset maintenance and services (Short version)

For the reasons set out above, the AS2124-1992 and AS4000-1997 series of General Conditions of Contract are always substantially amended by private sector principals prior to use on major projects, or not used at all.

There are multiple, alternative, standard form construction contracts in use in Australia. For convenience, and reflecting that the Standards Australia forms of General Conditions of Contract are the most widely used in practice, these notes refer to those standard forms throughout.

This standard form was first published in 1952 (originally known as CA24). Since that time it has been reproduced in several editions, changing its designation in 1978 to AS2124. AS2124 was revised in 1978, 1981, 1986 and 1992, then changing, in 1997, to the AS4000-1997 series of General Conditions of Contract.

The AS2124-1992 General Conditions of Contract is still widely used (even though the standard form is 25 years old, and was superseded by AS4000-1997 in 1997). AS2124-1992 is the basis of several hybrid General Conditions of Contract, in particular:

AS2124-1992 Construction Works

AS2545-1987 Sub-Contract

AS2987-1987 Equipment Supply and Installation

AS3556-1987 Supply

AS4300-1995 Design & Construct

AS4305-1996 Minor Works

There are, however, a number of unfortunate drafting errors in the AS2124-1992 General Conditions of Contract, attributable no doubt to the committee process of revision, which would need to be remedied before the document is suitable for use on major engineering projects. In brief, those drafting flaws include:

1. the document, in its treatment of Bills of Quantities, places the risk of pricing the works with the Principal rather than the Contractor (contrary to the recommendations contained in "No Dispute" which recommended the reverse);

2. uncertain risk allocation in a number of important areas (e.g. default of selected Sub-contractors);

3. inadequate security/retention provisions, which disentitle the Principal from access to security or retention in the event of defective work removing the commercial equivalence of bank guarantees to cash;

4. no provision of collateral contracts within the document (perhaps this is a reflection of the failure of the committee to follow the commercial trends);

5. complex logical difficulties relating to the conflicting roles of the Superintendent (as between his role as an agent for the Principal and as an independent certifier);

6. the document does not include an acceleration clause;

7. the latent conditions clause is expressed as a subjective test likely to favour inexperienced Contractors;

8. the extension of time clause has a number of logical and commercial difficulties;

9. the certificate of progress payments by the Superintendent requires the Superintendent to certify for claims, which may involve a legal judgment, and for claims, which may arise out of his own error, which are likely to result in challenges to the certificate by the Contractor;

10. the dispute resolution clause does not constitute a binding arbitration agreement.

Many of these (but not all) drafting flaws did not appear in the AS4000-1997 series. That series, however, includes other potential drafting issues (for example, AS4000-1997 does not include a time bar, unlikely to be preferred by principals in selecting a form of contract).