The HC7 Contract

New Homes Contract VIC
For illustration purposes only

The New Homes contract for works where the contract price is more than $10,000.00 (“HC7”) is typically written to favour Builders, as most domestic building contracts issued by industry associations are.

Therefore, you must be mindful of the terms embodied in the contract, and review them first before signing.

What are “Contract Terms”?

Contract terms represent the written agreement of the parties. In the contract, these terms are organised into different sections called “Clauses.” 

They lay out and define each party’s:

Binding Effect

Once signed by the parties, the contract becomes the law between them. 

It is therefore important to subject the contract to a thorough examination, because each party will be bound by its terms. 

Terms to Keep an Eye Out For

Every building project carries risks, and a good way to minimise these risks is to make sure that the contract terms that affect TIME, COSTS, and QUALITY, are fair to both parties. 

The following are essential clauses that you need to consider before you sign.

Commencement of Work

Purpose: Sets out the timeline for the home building project

Relevance: This affects other matters like payment and completion of works

Risk mitigated:

home building project commencement of work VIC
For illustration purposes only

Time for Completion

Purpose: Tells parties when the build should be completed

Relevance: This protects your rights against unreasonable extensions, and establishes  your right to claim liquidated damages

Risk mitigated:

Extension of Time

Purpose: Lays out the procedure for Builder or tradie to claim extension of time

Relevance: Lets you know if a claim for extension of time is valid or not

Risk mitigated:

how to claim an extension of time VIC
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Progress Payments

Purpose: Tells when Builder is entitled to claim periodic payments

Relevance: Helps you avoid issues relating to payment

Risk mitigated:

hia progress payment VIC
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Variations

Purpose: Tells you when variations are allowed to be made, and how

Relevance: So you can be on guard about whether the variations are proper

Risk mitigated:

building contract variations victoria by the owner
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For illustration purposes only

Defects Rectification

Purpose: Tells you when you can demand rectification

Relevance: Establishes your right to have defects fixed

Risk mitigated:

defect liability period vic
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Suspension of Works

Purpose: Tells you when Builder can suspend the works, and how

Relevance: So you’ll know whether or not the suspension of works is allowable and if it was done following the proper procedure

Risk mitigated:

suspension of works in vic
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Termination of the Contract

Purpose: Tells you how each party can terminate the contract, and the procedure for doing so

Relevance: This establishes your right to terminate the contract for cause

Risk mitigated:

For illustration purposes only
For illustration purposes only

Dispute Resolution Procedure

Purpose: Tells you how an ensuing building dispute may be resolved, if amicable negotiations don’t work

Relevance: This establishes your remedy in case of dispute

Risk mitigated:

dispute resolution procedure Victoria
For illustration purposes only

How We Can Help You

These are just some of the terms you will find in your MBA HC7 contract. You may want to engage a specialist Construction Lawyer for a more thorough and in-depth Contract Review, which includes recommendations and advice on how you can effectively administer your contract.

Construction Lawyer Melbourne has more than 10 years experience drafting and reviewing domestic building contracts.

Feel free to give us a call if you need expert advice on your Victorian building contract. First consult is free.