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Construction / Head Contracts

Head contract review.
AS4000, AS2124, GC21, D&C.

Construction head contracts define your LD exposure, EOT rights, latent condition risk, and security obligations. Kontractually reviews every head contract against your playbook before you execute it.

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Head contract checklist

6 provisions to review in every construction head contract.

1
Liquidated damages rate and cap
The LD rate must be a genuine pre-estimate of loss - not a penalty. What triggers LD liability? Is there an aggregate cap? What's the daily rate relative to contract value?
2
Extension of time mechanisms
What events entitle the contractor to an EOT? What notification timeframes apply? Failure to give timely notice commonly bars EOT entitlements under most standard forms.
3
Latent conditions clause
Who bears the risk of latent conditions (unexpected ground conditions, contamination, services)? AS4000 and AS2124 allocate this differently. GC21 has a different approach again.
4
Security provisions
Bank guarantees and retention - when can the principal call on security? What conditions apply? Timing of release? Security amounts are often negotiable.
5
Payment claim and certification
Reference dates, progress claim process, superintendent certification period, and payment periods. Does the contract comply with the applicable SOPA?
6
Practical completion definition
What constitutes practical completion? Who determines it? The PC date triggers the defects liability period start, final payment, and often the LD stop date.
FAQ

Head contract questions.

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AS4000 (1997) and AS2124 (1992) are both standard Australian head contract forms, but differ significantly on risk allocation. Key differences: latent conditions risk allocation (shared under AS4000, principal-heavy under AS2124), superintendent role (more independent under AS2124), liquidated damages regime, and performance security provisions. AS4000 is more commonly used for larger commercial projects. Kontractually checks contracts against the standard you specify.

Most standard form construction contracts require the contractor to notify the superintendent (or principal) of a claim for extension of time within a specified period after the delay event occurs or becomes apparent - typically 28 days. Failure to give timely notice often bars the EOT entitlement entirely, even if the underlying delay was genuine and compensable. Kontractually flags EOT notification requirements in the contract so you know what timeframes apply.

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Review every head contract before execution.

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