Standard Forms of Contract in the Australian Construction Industry

Every year, hundreds of thousands of contracts are entered into for construction work in Australia.\r
The work undertaken under these contracts, and the value of that work, is extremely varied, ranging\r
from minor home renovations to multi-billion dollar infrastructure and resources projects.\r
The complexity and diversity of risks, and the administrative procedures involved in construction projects,\r
have together resulted in industry perception that use of standard forms of contract tends to minimise\r
avoidable transaction costs and overall leads to greater efficiency in procurement. However, it seems\r
increasingly to be the case that - especially in high-value commercial projects involving sophisticated\r
industry participants (including legal advisers) - standard forms are less frequently being used and, where\r
they are used, they are heavily amended.\r
In late 2013, Melbourne Law School's construction law program, with the support of the Society of\r
Construction Law Australia, launched a research project to investigate whether these perceptions\r
reflect current practice in the Australian construction industry. It sought to assess the current use\r
and effectiveness of the range of standard forms of construction contract in Australia, particularly in\r
terms of their ability to reflect an appropriately-balanced risk allocation and to facilitate efficient\r
project administration.\r
The research project involved a web-based survey (which collected data between November 2013 and\r
February 2014) and interviews with construction industry stakeholders (between January and March\r
2014).