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Contruction Law - Questions and Answers

Introduction

Snedden Hall & Gallop’s business team has a proven reputation within the construction industry for providing common sense legal advice concerning, inter alia, building contracts and the legal consequences of a building project.

The following questions and answers might help you with some queries you have about construction law:

Q. What does construction law cover?

A. Construction law covers:

a) negotiating construction projects, including providing advice about legislative requirements, planning laws and financing;

b) preparing contracts, including subcontracts and arrangements with development partners; and

c) assisting with project management, including prompt and cost-effective attention to disputes and variation claims during the course of construction.

Q. What are my options if my builder fails to complete the construction of my home?

A. An effective contract should provide a procedure to follow to give the builder notice to “show cause” why the contract should not be terminated, to engage another builder to complete the works, and to give notice of your intention to sue for recovery of any additional costs or damages. You may also need to enforce a dispute resolution procedure by giving notice of a dispute as a prerequisite to arbitration or the issuing of court proceedings. The legal procedures are technical and should not be embarked upon without legal guidance.

Q. What is a variation to a contract?

A. A variation is a change requested by either you or your builder and is agreed to by both parties throughout the project. Although the changes can affect the price and extend the time of the contract, they may be inevitable, e.g., if there are difficulties with the building site, such as the need for a deeper foundation or avoiding an easement.

Q. What is the significance of a variation to a contract?

A. A variation is usually addressed in building contracts because of the significant effect they may have on the overall project. This could include an increase in the total cost of the project and its completion time, a change in the allocation of resources, interference with the order of works, and it could even reduce the builder’s profit. Accordingly, special provisions are included in a contract to address such things as the cost of a variation, the effect it may have on the completion date and a method to speedily deal with a dispute that may arise because of the variation.

Q. I am building a small residence. Do I need a written contract?

A. It is in your best interests to have a written contract for any building project. Contracts deal with the essential terms, such as the scope of the works, the price and the completion date, as well as with dispute resolution, the cost of variations, and a procedure for calling in experts to resolve such technical issues as engineering problems.