Building Contract Review Lawyers: Why Builders Should Review Before They Sign
Most builders I work with can price a job to the dollar, sequence trades in their sleep and read a set of drawings faster than any lawyer. Far fewer have read every clause of the contract they are about to sign. That is understandable. Contracts arrive late, the client is eager to start, and the document looks much like the last one. Yet it is the contract, not the drawings, that decides who carries the cost of a wet winter, an unexpected rock below the surface or a client who stops paying.
For builders, head contractors and subcontractors across Victoria, engaging building contract review lawyers before signing is one of the most cost-effective decisions a business can make. In this article, I explain why a review matters more in 2026 than it has in years, the clauses that most often turn a profitable project into a loss, and what a practical review should deliver to a busy building business.
Why building contract review matters more than ever
Margins in construction are thin, and contracts are increasingly drafted to move risk down the chain. Principals and developers often use amended standard forms in which a few pages of special conditions quietly rewrite the general conditions beneath them. A builder who signs on the strength of familiarity with the base form may be agreeing to something very different.
The legal landscape has also shifted. On 15 April 2026, significant amendments to the Building and Construction Industry Security of Payment Act 2002 (Vic) commenced. Victoria's former "excluded amounts" regime has been abolished, allowing claims involving latent conditions, time-related costs and variations to proceed through the statutory payment process, subject to the Act's requirements.
Contractual provisions requiring progress payments later than 20 business days after service of a payment claim made in accordance with the Act are ineffective to that extent. Notice-based time bars may also be declared unfair where compliance is not reasonably possible or would be unreasonably onerous. Where a construction contract does not specify a payment due date, a statutory default of 10 business days applies, calculated from the earliest day on which the payment claim could have been served.
Importantly, the amended Act applies to existing contracts as well as new ones. Builders now hold stronger rights, but only those who understand how their contract interacts with the legislation will use them well.
A contract waiting for your signature?
A focused review before you sign costs a fraction of a single dispute. Speak with us about a building contract review through our Building Lawyers page.
Key Clauses Building Contract Review Lawyers Will Examine
Payment Terms and Security
Payment clauses deserve the closest reading. We examine how claims must be made, when payments become due and what conditions apply. Performance security is equally important, as bank guarantees and retention money can tie up working capital long after construction is complete if release mechanisms are unclear.
Under the Victorian security of payment reforms commencing on 15 April 2026, a party seeking to have recourse to performance security must first provide written notice and wait at least five business days, or longer if the contract requires. This notice requirement cannot be contracted out of. The reforms also introduce a statutory process for claiming the release of performance security.
A contract review identifies whether payment and security provisions comply with these requirements and whether the proposed arrangements expose your business to unnecessary financial risk.
Time Bars and Notice Requirements
Claims for variations, extensions of time and additional costs can be lost because contractual notices were submitted late, sent incorrectly or failed to contain the required information.
Victoria's amended security of payment legislation allows certain notice-based time bars to be declared unfair where compliance was not reasonably possible or would have been unreasonably onerous. However, a declaration is not automatic and generally affects only the particular entitlement being considered.
Relying on an adjudicator or court to set aside a missed notice is no substitute for proper contract administration. We identify notice obligations, deadlines and procedural requirements so they can be incorporated into project processes from the outset.
Liquidated Damages and Delay
Liquidated damages clauses establish a predetermined amount payable for delays to completion, commonly calculated on a daily or weekly basis.
The agreed rate, any liability cap and the extension of time provisions must be considered together. A substantial liquidated damages rate combined with restrictive extension of time provisions can quickly erode a builder's project margin.
We examine whether the allocation of delay risk is commercially reasonable, whether extensions of time are available for events outside the builder's control and whether the contract provides clear procedures for assessing delays.
Where delay is already a live issue, our construction delay lawyers can assist.
Defects, Indemnities and Unfair Terms
Broad indemnities, extended defects liability periods and unilateral termination rights can expose builders to significant liabilities beyond the original contract price.
For small businesses, additional protections may apply under the Australian Consumer Law's unfair contract terms regime. The expanded protections generally apply to standard form contracts entered into or renewed from 9 November 2023 where at least one party employs fewer than 100 people or has annual turnover below $10 million. They also apply to relevant contractual terms varied or added from that date.
Proposing, applying or relying on unfair terms in contracts covered by the amended regime is prohibited and may attract substantial penalties. However, whether a particular provision is unfair depends on its operation and the contract as a whole.
These protections can provide smaller builders and subcontractors with additional grounds to challenge provisions that create an unjustified imbalance in contractual rights and obligations.
Contracts and payment arrangements that fail to comply with these requirements can expose builders to disputes, regulatory consequences and restrictions on recovering certain amounts, particularly where statutory variation procedures have not been followed.
Practical guidance before you sign
Allow time. Ask for the full contract, including special conditions, schedules and every referenced document, before your price is final, because risk allocation is a pricing input rather than an afterthought. Do not assume a familiar standard form is unchanged. Treat negotiation as ordinary commercial practice; sophisticated principals expect reasonable amendments from capable builders, and a well-framed request rarely costs a relationship.
Finally, make sure the people running the site know the notice and claim obligations the contract imposes. A carefully reviewed contract that nobody reads after signing protects very little. If you are unsure whether a clause in your current contract still operates as written after the 2026 reforms, that alone is reason to have it checked.
How building contract review lawyers can help
At Whelan Lawyers, we review, negotiate and draft construction contracts for builders, subcontractors and developers across Melbourne and Victoria. Drawing on my years in senior in-house legal roles with national businesses including Jim's Group, Clark Rubber and Cummins South Pacific, our approach goes beyond identifying legal risks. We focus on protecting commercial interests, managing contractual obligations and negotiating practical terms that safeguard project margins and cash flow.
Our experienced construction law team brings extensive industry-specific expertise. Senior Construction Lawyer Krishita Ramjeet has over a decade of legal experience, including senior roles with Master Builders Victoria, Major Road Projects Victoria and Lloyd Group. At Master Builders Victoria, Krishita advised builders on construction contracts and disputes and was responsible for updating the association's suite of building contracts. Lawyer Amelia Nicolaides also brings valuable experience from Master Builders Victoria, where she advised builders on contract drafting, negotiation, regulatory compliance and contractual risk.
This legal expertise is complemented by our construction industry adviser, a registered architect and experienced project manager, who brings over a decade of practical experience in construction delivery, contract administration and major projects. Together, our team combines legal expertise, commercial judgement and first-hand industry knowledge to provide advice grounded in how construction projects actually operate.
You can learn more about our legal advice for builders and our broader construction law practice. If you have a construction contract awaiting review, contact our team before you sign.
Frequently asked questions
What do building contract review lawyers do?
Building contract review lawyers read a proposed construction contract from the builder's side, identify clauses that shift unreasonable risk onto the builder, explain their practical effect and recommend amendments before signing. The usual focus areas are payment terms, security, time bars, liquidated damages, variations, defects liability and termination.
When should a builder have a contract reviewed?
Ideally before the price is finalised. Risk allocation affects what a project should cost, so a review completed at tender stage allows any risks identified to be priced or negotiated out. Once the contract is signed, the opportunity to change its terms is largely gone.
Do the 2026 security of payment changes apply to existing contracts?
Generally, yes. The amendments to Victoria's Security of Payment Act that commenced on 15 April 2026 apply to construction contracts regardless of when they were entered into, subject to transitional rules for payment claims and adjudications already underway. Builders should check how their payment, security and notice clauses now operate.
Is it worth reviewing a standard form contract such as AS 4000?
Yes. Standard forms such as AS 4000 are commonly amended by special conditions that change the risk allocation substantially. A review identifies those departures and whether they are commercially acceptable for your business.
Disclaimer: This article provides general information only and is not legal advice. The law is complex and varies based on individual circumstances. You should seek specific legal advice about your particular situation before making any decisions about legal matters.
Neda Whelan
Neda Whelan is the Founder and Principal of Whelan Lawyers. With over a decade of experience as former General Counsel for major national networks such as Clark Rubber and Jim's Group, she provides practical, commercial-first legal strategies for franchisors and business owners.
