It claims to use plain English and to involve less risk to architects than the ABS contract. In its present form it does not appear to have any advantages over the ABS contracts. In the case where the performance of the work cost is more than the provisional sum, a percentage nominated in Schedule 1 of the contract is added to the difference and the resultant is added to the contract sum. Where the performance of the work cost is less than the provisional, the difference is deducted from the contract sum Failure To Pay The rate of interest to be applied to contractually outstanding payments is nominated in Schedule 1.
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Despite having many similarities, AS and AS are very different forms of contract. This article provides a basic introduction to AS It is protected by copyright and you must pay a licence fee to use it.
You can purchase a copy of AS here. When buying AS , be sure to buy the right version. You will notice that different types of licences are available reference version, multiple use versions, editable versions and so on. Licence fees vary depending on which licence option you pick. You will need to choose the version that best suits your circumstances.
You will need to compile the other contract documents and complete the annexures. You will also need a document to formalise your entry into the contract you have compiled. As you will notice, there is nowhere to sign in the AS general conditions or annexure pages. Both documents serve much the same purpose, although most principals prefer a formal instrument of agreement to ensure there is no doubt about which documents are included in the contract.
This document has been produced by Standards Australia for use in conjunction with AS The basic features of AS Lump sum price. The contractor is required to carry out the works for a fixed price and within a fixed timeframe.
Fixed timeframe. If this does not occur, liquidated damages will apply if provided for in the annexure. Practical completion. The contract acknowledges that construction projects can often be used and occupied before all works, including minor works, are completed. The contract prescribes a process for dealing with variations. Extensions of time. The contractor may claim extensions of time to the date for practical completion if it is delayed by an event listed at clause Latent conditions.
The contractor is entitled to claim an extension of time and additional costs if it encounters a latent condition, subject to the contractor following the prescribed notice procedure. Provisional sums. The price of these items is adjusted once the final cost is known. AS contains a specific provision to deal with this. Separable portions. AS allows the works to be divided into separable portions or stages , with each of them potentially having a different access date, date for practical completion and liquidated damages rate.
Separable portions can be defined at the time of contract entry, or directed by the Superintendent at any time up until practical completion of the final portion of work.
Find out more about how separable portions work here. Criticisms of AS Although AS was produced by Standards Australia following consultation with a variety of industry stakeholders, it is not without its critics.
Some principals consider the relief available to contractors to be too generous, and somewhat uncertain. For example, clause Many principals will seek to limit the availability of EOTs to a list of specific events. In addition, AS does not cap the amount of delay costs that may be claimed by the contractor where a compensable cause of delay arises.
Some principals will seek to address this by amending the contract to incorporate a cap. There are parts of AS that are not to the liking of some contractors either. For example, if a delay is caused by multiple causes of delay and any of the causes would not entitle the contractor to claim an EOT, no EOT will be available in respect of the delay.
The equivalent provision of AS allows an apportionment to be made. If the superintendent directs the contractor to perform a variation, the price of the variation need not be agreed or determined before work on the variation commences.
There is also no prescribed timeframe for the superintendent to price a variation. Unless the parties make an active effort to promptly resolve variation claims and other contract adjustments, the potential for disputes will only increase as the project progresses. Developments since AS AS was released in , making it almost 30 years old. Since then, there have been a number of changes to the law. Parties contemplating a contract under AS will often agree to special conditions to address these changes.
Examples of legislative changes that have occurred since the first publication of AS include new laws relating to GST, security of payment , proportionate liability, personal property securities, work health and safety, the Australian Consumer Law and unfair contracts legislation. Key takeaways Despite its age, AS continues to be a widely used form of head contract. If you are thinking of AS as your contract for a new project, you should consider whether any amendments may be needed.
For example, you may wish to alter the risk profile, you may wish to incorporate new clauses to deal with legislation that has commenced since the AS was first released, and you may also need clauses to deal with specific issues that arise out of your project.
If you have entered into a contract that incorporates AS , be sure to familiarise yourself with the detail of the document so that you understand your rights, obligations, entitlements and liabilities, and so that you can administer the contract accordingly.
About the Author Bridgit is a commercial lawyer whose practice is focused on transactional matters in the construction and technology space.
Author Bridgit Masson Associate bridgit.
Australian Standards in Contracting
Standard form contracts in construction and engineering works have been around for some time. AS came to be seen as the modernization of the standard, and again, even though it was drafted in it is still a popular and user friendly document. This can be seen in the operation of clauses such as Extensions of Time and Variations for example. I would also suggest that despite only a six year difference, the language of AS is a little more archaic and unwieldy, and the general structure of the document is cumbersome.
Australian Construction Contracts
Despite having many similarities, AS and AS are very different forms of contract. This article provides a basic introduction to AS It is protected by copyright and you must pay a licence fee to use it. You can purchase a copy of AS here. When buying AS , be sure to buy the right version. You will notice that different types of licences are available reference version, multiple use versions, editable versions and so on.