Principal
The principal is the party at the top of the contracting chain - the owner or developer who engages the head contractor - and, for a subcontractor, usually a party you have no contract with at all.
No contract with the principal means no direct claim against them in ordinary circumstances - your rights run against the builder. Limited exceptions exist (statutory charges in some states, direct-payment provisions, or collateral warranties where signed).
Why it matters to subbies
When a builder blames the principal for late payment, that is the builder's problem, not your legal position - pay-when-paid clauses are void in every Australian jurisdiction, and your payment claim runs against the party who engaged you.
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General information for Australian subcontractors, not legal advice - contract drafting and state legislation vary and change; your document and your state's Act govern. Written by Mat Kennedy at The Construction Contracts Co.