Subcontracts
Contract Advice for Head Contractors
Legislation applicable to building work that is not ‘domestic building work’ under Schedule 1B of the Queensland Building and Construction Commission Act 1991 (QBCC Act) is covered by Part 4A of the QBCC Act. This includes subcontracts at all levels below the head contract. It is a requirement of the QBCC Act that all subcontracts are in writing – or at least certain matters relating to subcontracts are in writing. Strict timeframes apply with fines and demerit points for non-compliance – on both parties. It is important to understand that these requirements apply to all subcontracts down the contractual chain if the subcontractor is carrying out building work regardless of whether or not the subcontractor is required to hold a licence to do the subcontract work.
Wood L&M Solutions can draft a subcontract that suits you and your business as a head contractor. We can also review proposed subcontracts for compliance and risk allocation.
Many of the provisions of a subcontract that do not align with the requirements of Part 4A are void and unenforceable to the extent of any inconsistency or conflict. Therefore, it is always best to ensure that the subcontract is drafted in a way that does not offend Part 4A so that the words of the subcontract apply in the manner in which the parties intend for them to apply.
Contract Advice for Subcontractors
Legislation applicable to building work that is not ‘domestic building work’ under Schedule 1B of the Queensland Building and Construction Commission Act 1991 (QBCC Act) is covered by Part 4A of the QBCC Act. This includes subcontracts at all levels below the head contract. It is a requirement of the QBCC Act that all subcontracts are in writing – or at least certain matters relating to subcontracts are in writing. Strict timeframes apply with fines and demerit points for non-compliance – on both parties. It is important to understand that these requirements apply to all subcontracts down the contractual chain if the subcontractor is carrying out building work regardless of whether or not the subcontractor is required to hold a licence to do the subcontract work.
Wood L&M Solutions can draft a subcontract that suits you and your business as a subcontractor. We can also review proposed subcontracts for compliance and risk allocation.
Many of the provisions of a subcontract that do not align with the requirements of Part 4A are void and unenforceable to the extent of any inconsistency or conflict. Therefore, it is always best to ensure that the subcontract is drafted in a way that does not offend Part 4A so that the words of the subcontract apply in the manner in which the parties intend for them to apply.
Requirements of Part 4A of the QBCC Act
It is a requirement of Part 4A of the Queensland Building and Construction Commission Act 1991 (QBCC Act) for all contracts for building work (as defined in the QBCC Act) to be in writing. This carries a maximum fine of approximately $10k and 4 demerit points against the contractor’s licence. To be considered to be ‘in writing’, s67G of the QBCC Act requires the following matters to be in writing:
- name of the building contractor who will carry out the building work;
- licence number of the building contractor who will carry out the building work;
- address of the site;
- scope of the building work to be carried out;
- date for completion of the building work (or the way in which the date for completion will be determined e.g. within 20 business days after being given access to the site);
- whether retention / security applies to the contract (if not, then this must be noted); and
- contract price.
If the contract price is $10,000 or less (including GST), the above matters must be in writing before the building work is completed.
If the contract price is more than $10,000 (including GST), the above matters must be in writing before the building work is commenced.
If the contract price is initially $10,000 or less (including GST) and because of a variation, the contract price is revised to more than $10,000 (including GST), the above matters must be in writing prior to the commencement of the variation work.
The requirements of Part 4A of the QBCC Act apply to all subcontracts of all values if the work is ‘building work’ and the value of the building work under the head contract exceeds $3,300 including GST (i.e. value of the work includes the cost of all labour, materials and GST regardless of who pays for the labour or materials). There is no $3,300 ‘limit’ for subcontracts though so the requirements of the QBCC Act apply to subcontracts of all values.
Last updated: 30 December 2021