What are contract terms?
Contract terms are those parts in the Housing Industry Association (HIA) Domestic Building Contract that set out each party’s rights, liabilities, and obligations. They are organised into different clauses.
What are contract terms?
To minimise risks to cost, time, and quality, it is important to be mindful of the following terms or clauses from the Housing Industry Association Victorian New Homes Contract.
Cooling Off Period
| What it does | Importance | Risk minimised |
| Allows home owner to terminate the contract 5 days from signing | So you can opt out of the contract before the build | ✓Cost ✓Time ✓Quality |
Time for Completion
| What it does | Importance | Risk minimised |
| Sets the period within which the building project should be completed | This affects other matters like damages (monetary compensation for delay) | ✓Time ✓Cost ✓Quality |
Contract Price
| What it does | Importance | Risk minimised |
| Sets out the total cost of the project, including tax | So you know the contract accurately reflects the cost you agreed to | ✓Cost |
Progress Payments
| What it does | Importance | Risk minimised |
| Sets the different stages of completion and the corresponding cost for each | To make sure you’re on top of your financial obligations, and that you don’t incur penalties or interest for late payment | ✓Time ✓Cost ✓Quality |
Commencement and Building Period
| What it does | Importance | Risk minimised |
| Sets out the start date of the building project | This affects other issues like completion | ✓Time ✓Cost |
Statutory Warranties
| What it does | Importance | Risk minimised |
| Sets out the builder’s obligations under the law | So you know your rights in case the builder commits breach | ✓Time ✓Cost ✓Quality |
Variations
| What it does | Importance | Risk minimised |
| Sets out the instances when and the procedure on how to validly make variations (changes on the original plan) | So you won’t get duped into paying for unauthorised variations | ✓Time ✓Cost ✓Quality |
Extension of Time
| What it does | Importance | Risk minimised |
| Sets the grounds and the process for the Builder to claim a valid extension of time to finish the project | So you know if the claim for extension of time is valid, or if it is an inexcusable delay | ✓Time ✓Cost ✓Quality |
Extension of Time
| What it does | Importance | Risk minimised |
| Sets the grounds and the process for either party to terminate the contract | So you can properly terminate the contract for cause | ✓Time ✓Cost |
Disputes, Conciliation, and Tribunal
| What it does | Importance | Risk minimised |
| Sets out the procedure for resolving building disputes | So you know your recourse in case of dispute | ✓Time ✓Cost ✓Quality |
How We Can Help
These are the most important terms you need to review, and these are common sources of dispute. For a more detailed and thorough review of your entire HIA contract, feel free to get in touch with us. Construction Lawyer Melbourne specialises in Contract Review and Advice.
