The Two Types Of Construction Contracts Used In Australia

In the construction industry, contracts outline the key terms and conditions of projects.

In Australia, there are two different types of commercial contract commonly used in construction, those are:

  • > The Australian Standards Contracts 
  • > The Australian Building Industry Contracts (ABIC).

In this article, we will explore the differences and similarities between the two contract types and their applications in the construction tendering process.

Australian Standards Contracts

In commercial construction projects Australian Standards contracts are used between clients and builders and specify the:

  • > terms, 
  • > conditions, and 
  • > obligations 

the parties must adhere to. 

They include important details such as payment schedules, performance requirements, defects liability, and more. 

Australian Standards contracts commonly include:

  • > Performance requirements
  • > Payment schedules
  • > Provisions for defects liability, and

Companion docs specific to subcontractors

Subbies are generally signed up to companion documents depending on the builder’s preference;

  • > TAB- AS2545 — subcontract conditions (companion to AS2124)
  • > TAB- AS4303 — general conditions of subcontract for design and construct (companion to AS3400)
  • > TAB- AS4901 — subcontract conditions (companion to AS4000)

The advantages of Australian Standards Contracts include:

  • > Easily purchased from SAI Global page (www.saiglobal.com)
  • > Widely accepted in the industry

Australian Building Industry Contracts

The alternative type of construction contracts used in Australia are the Australian Building Industry Contracts (ABIC) contracts, produced by the Master Builders Australia and Australian Institute of Architects.

ABIC construction contracts are generally used where an architect acts as client-side project manager and administers the contract on the client’s behalf.

In ABIC Contracts, subcontractors will usually come across the following;

  • > Major Works Subcontract (MW SC-1 2002)
  • > Simple Works Subcontract (SW SC-1)
  • > Basic Works Subcontract (BW SC-1)

The advantages of ABIC Contracts include:

  • > Easily Purchased from Master Builders (www.masterbuilders.com.au)
  • > Typically simpler and easier to use
  • > Specifically designed for small-medium projects

Learn More About Construction Terminology

It can be tough to get your head around some of this construction industry terminology! If you’re left scratching your head, we recommend checking out our Construction Terminology 101 blog which should keep you up to date on the language of the industry.

If you want to know more about the tendering process, head over to our tendering timeline blog, or if your ready to start winning work, sign up to EstimateOne with a free account today.