Australian Building Industry Contracts or ABIC contracts are specifically drafted for architects to use when they are administering a building contract. They make the building process simpler, clearer and reduce disputes down the track. Below, we explain the different types of ABIC contracts (and their corresponding codes), emphasising the importance of selecting the correct one for your state and territory that addresses issues relevant to your jurisdiction. In the ABIC contracts set out below, the architect is considered the superintendent in that they have a particular role concerning the contract (to administer the contract).
What are the Different Types of ABIC Contracts?
Choosing an ABIC contract can be confusing. However, they can be broken up into several different categories, namely:
- Major and simple works contracts (major and simple works contracts are then categorised into whether you are working in Queensland or not and whether you are working on a housing project in Western Australia worth over or under $500,000);
- Commercial costs plus contracts;
- Early works contracts; and
- Basic works contracts.
There are many fundamental differences between a major works contract and a simple works contract. The first is to do with size. For a simple works contracts, the range of these projects is between $500,000 – $3,000,000. A simple works contract should be used for smaller projects whereas you would use a major works contract for more complex or larger projects (i.e. above $3,000,000).
ABIC Major Works Contracts
ABIC MW-2008 Major Works Contract
This is a standard contract for major work other than housing work. You should not use this contract in Queensland. In Western Australia, you may use these contracts for housing projects worth over $500,000.
ABIC MW-2008 Major Works Contract – Housing
This contract sets out the appropriate terms and conditions for each state and territory. It is tailored to the legal requirements for housing work in each jurisdiction. However, you should not use this contract in Queensland. You should use the ABIC MW-2008 contract if you are working on a housing project in Western Australia worth over $500,000.
ABIC Major Works Contracts – Queensland
If you are operating in Queensland, you should use the ABIC MW H 2011 Major Works Housing Contract for housing and other domestic projects to which the Domestic Building Contracts Act 2000 (QLD) applies.
For major works in Queensland, you should use the ABIC MW C 2011 Major Works Commercial Contract, essentially for projects that the ABIC MW H 2011 does not cover.
Simple Works Contracts
ABIC SW-2008 Simple Works Contract
You should use this contract for non-housing work. If your project is in WA, you can use this contract for housing works over $500,000.
ABIC SW-2008 Simple Works Contract – Housing
This contract covers specific state and territory legal requirements relating to housing. If you are in Western Australia and your project is over $500,000 you should use the ABIC SW-2008 simple works contract.
Simple Works Contracts Housing – Queensland
ABIC SW H 2011 Simple Works Contract – Housing
Parties should use this contract for small housing and domestic projects that the Domestic Building Contracts Act 2000 (QLD) applies.
ABIC SW C 2011 Simple Works – Commercial Contract
You should use this contract for all work the ABIC SW H 2011 does not cover.
Commercial Cost Plus Contract
ABIC CP-2014 C commercial Cost Plus Contract
You should use this contract when the final fee is not able to be calculated before commencing work, and the architect is administering the contract.
Early Work Contracts
ABIC EW-1 2003
You should use this contract for early works (i.e. those undertaken to prepare the site such as demolition, groundwork and other temporary work). Use this contract when the architect is administering the contract rather than a contractor.
If you are using this contract in Queensland, you should also ensure that you meet the special conditions prescribed in this jurisdiction.
For other states and territories, you should refer to the special conditions relevant to your state and territory and include these in the contract if you would like to use this contract for housing projects.
Basic Works Contract
ABIC BW-1 2002 Basic Works Contract
This contract is typically used for residential projects (by including the appropriate special conditions for your state or territory) or small commercial projects (up to around $500,000). As with the other contracts, you should use these where the architect is administering the contract.
Some Key Clauses in a Simple Works Contract
Like all contracts, there are some key terms that you should understand and be aware of in a simple works contract.
Firstly, the schedule will set out key items of the contract including the parties named below:
- Architect – who administers the contract;
- Contractor – who will be undertaking the work; and
- Owner – the client who is requesting the work to be done.
Some key clauses and what they address include:
- Section A – Overview: Obligations and warranties of both the architect and the contractor and how the architect, owner and contractor will work together.
- Section B – Documents: What will take precedent if there is a conflict between the documents as well as the contractor’s and owner’s obligations to supply documents.
- Section C – Security: Security relating to the contract and what type of security the owner is providing along with when the owner’s release from security will take place.
- Section D – Liability: Liability, risk and indemnity before and after practical completion.
- Section E – Insurance: Insurance requirements and the payment of claims.
- Section F – The Site: How to access the site and obligations on site.
- Section G – Building the Works: The owner’s and contractor’s obligations, subcontracting and how the contractor and owner will work together.
- Section H – Claims to Adjust the Contract: How a claim to adjust the contract can be made.
- Section J – Variation to Works: How variations can be made under the contract.
- Section K – Adjustment to Provisional and Prime Cost Sums: This clause relates to provisional sums and prime cost sums (sums that are not defined before the project begins) that are set out in the contract and how they may be adjusted. These costs are additional to the contract price.
- Section L – Adjustment of Time: How the parties can alter the schedule.
- Section M – Completion of the Works: This clause addresses practical completion, defects relating to the works and the liability period after practical completion.
- Section N – Payment for the Works: Obligations concerning paying the contract price, progress claims, and the final certificate.
- Section P – Dispute Resolution: The process for dispute resolution including conference, mediation and legal rights if the dispute resolution process is not successful.
- Section Q – Termination of Engagement: The process of termination and each parties’ rights and obligations concerning termination.
If you are choosing, reviewing or amending your ABIC contracts, you should consult with a construction lawyer who has experience in this area. It is important that you are using the correct ABIC contracts and include special conditions if required, to ensure a smooth working relationship. If you have any questions, get in touch with our building and construction lawyers on 1300 544 755.