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ARTICLE · 15 SEPTEMBER 2010

Use with Caution: Terms in Industry Standard Building Contracts May Be Seen As Unfair

HopgoodGanim
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The use of industry standard contracts in the building and construction sector is widespread. For example, the Housing Industry Association and the Master Builders Association have each developed a suite of industry standard contracts for use by builders, subcontractors and home owners. However, industry standards should now be used with caution and reviewed against the backdrop of the new ‘unfair contract’ provisions contained within the Trade Practices Act.

AustraliaReal Estate and Construction
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Adam Carlton-Smith, Partner

Peter Lamont, Senior Associate

Lucy Elkins, Trainee Solicitor

The use of industry standard contracts in the building and construction sector is widespread. For example, the Housing Industry Association and the Master Builders Association have each developed a suite of industry standard contracts for use by builders, subcontractors and home owners. However, industry standards should now be used with caution and reviewed against the backdrop of the new 'unfair contract' provisions contained within the Trade Practices Act.

What the 'unfair contract' provisions mean for home owners

The amendments to the Act highlight that industry standard contracts do not mean that both parties are on equal footing. The amendments mean that contractual terms that overtly favour builders must be removed to ensure that 'mum and dad home owners' are not disadvantaged by blanket provisions.

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