Frank Law Blog

In our last article we introduced the Security for Payment legislation through the Building and Construction Industry Security of Payment Act (NSW) 1999 (“SOPA”) whereby creditors can enforce progress payments in accordance with their contract.

Most commercial contracts will have a dispute resolution clause. This clause will outline the steps the parties are to take if a dispute arises.

When construction defects arise, owners must decide whether to allow the original builder to fix it. The primary concern is whether the recipient of the building work is acting unreasonably by not allowing the builder to remedy their defective work.

Indemnity clauses effectively allocate risk between the parties. The danger, however, is when the clause is more extensive than the party thought when they entered into the agreement.

Where there is a breach or repudiation of a contract giving rise to a right to terminate, the innocent party has a choice to either terminate or proceed with the contract.