The clauses that decide whether you get paid
One page per clause: what it means, a typical builder version, what market looks like in real Australian subcontracts, and the fairer wording to ask for. Got one in front of you? Check it in seconds.
Set-off clause
A set-off clause lets the builder deduct money it says you owe it from a progress payment it owes you.
Extension of time clause
An extension of time (EOT) clause sets out when you get more time to finish because of a delay you didn't cause, and how you must claim it.
Liquidated damages clause
A liquidated damages (LD) clause fixes, in advance, a daily amount you pay the builder for every day you finish late.
Consequential loss clause
A consequential loss clause limits liability for indirect losses: lost profit, lost revenue, delay costs on other projects, financing costs.
Force majeure clause
A force majeure clause relieves a party from obligations, or gives it more time, when events outside anyone's control intervene: extreme weather, pandemic orders, widespread industrial action, natural disasters.
Indemnity clause
An indemnity clause makes you cover the builder's losses in stated circumstances.
Pay-when-paid clause
A pay-when-paid (or pay-if-paid) clause makes your payment depend on the builder being paid by its client first.
Termination for convenience clause
A termination for convenience clause lets the builder end your subcontract at any time, for any reason, without you being at fault.
Time bar clause
A time bar clause says a claim (for a variation, an extension of time, delay costs) is lost if you don't give notice within a set period.
Retention clause
A retention clause lets the builder hold back part of each progress payment as security for defects, released later.
Variation clause
A variation clause governs extra or changed work: who can direct it, how it must be directed, and how it is priced and claimed.
Novation clause
Novation replaces one party to a contract with another: the new party steps into the old one's rights and obligations.
Security and bank guarantee clause
A security clause requires you to give the builder a bank guarantee, insurance bond or cash retention it can draw on if you fail to perform.
Release and final payment clause
A release clause makes you give up claims against the builder, usually in exchange for final payment or a final progress payment.
Payment terms clause
The payment clause sets when you can claim, how the builder must respond, and how many days it has to pay.
General information, not legal advice. Written by Mat Kennedy, The Construction Contracts Co.