Construction disputes start
in the contract.
LDs you didn't catch. Back-to-back flow-down you didn't read. Security of Payment deadlines you didn't know about. The 8 construction contract risks below cause the majority of construction disputes. Kontractually checks for all of them.
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8 construction contract risks to review before you sign.
These are the provisions that generate the most disputes. Review every contract against this list - or configure Kontractually to do it automatically.
Based on adjudication and litigation data, the most frequent causes are: payment disputes (amounts, timeframes, and Security of Payment Act compliance), variations (scope, approval process, and valuation), latent conditions (unexpected site conditions and who bears the cost), and defects (what constitutes a defect, rectification obligations, and DLP timeframes). Most of these disputes have their roots in contract ambiguity at signing.
Back-to-back provisions attempt to impose the same risk profile on the subcontractor as the contractor faces in the head contract. In practice, this often means a subcontractor accepts LD exposure, latent condition risk, and retention terms from a head contract they haven't read. The key issue is whether the back-to-back is truly mirrored (same protection and same risk) or whether it only flows down obligations without flowing down the corresponding protections.
Each Australian state and territory has a Security of Payment Act (or equivalent) that gives contractors and subcontractors a statutory right to recover progress payments via a fast-track adjudication process. The act prescribes timeframes for payment claims (usually monthly), payment schedules (typically 10-15 business days to respond), and adjudication applications. Missing any of these timeframes can forfeit your rights. Head contracts sometimes attempt to contractually modify these timeframes - with varying success.
Yes. You configure a construction playbook with rules for each of these risk areas - LD rate thresholds, EOT notification timeframes, variation approval requirements, insurance levels, and back-to-back flow-down provisions. Kontractually then checks every contract you review against those rules and flags deviations. You don't need to manually hunt through each clause every time.
Yes, but the risks differ. Head contractors need to check their obligations to the principal: LD exposure, completion date, latent conditions, and insurance requirements. Subcontractors need to check back-to-back flow-down, payment claim timeframes, variation approval processes, and whether they're accepting head contract risk they don't understand. Kontractually supports separate playbooks for head contracts and subcontracts.
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