The 5 Subcontract Clauses I'd Never Sign Unamended (55 Contracts Analysed)
From 55 real Australian subcontracts analysed: 90% allow termination for convenience, 98% allow set-off without notice, 83% of LD clauses have no cap - and 100% of identifiable time bars extinguish the claim entirely. These are the five clauses to deal with before signature, counted down, with the fix for each.
Transcript
I read subcontracts for a living. These are the five clauses I would never let through without a fight.
Number five. Termination for convenience. Ninety per cent of the contracts we analysed let the builder end the job on notice. No breach required. The fix is not deleting the clause. It is the exit account. Work done, materials ordered, demobilisation. Paid.
Number four. Set-off without notice. Ninety eight per cent let the builder deduct money from your payment without telling you first. Ask for written notice before any deduction. And set-off limited to this contract only.
Number three. The defects period that never ends. Tied to the head contract. Or restarting every time you fix something. And your retention waits on it. Cap it at your own completion, with a fixed outside date.
Number two. Uncapped liquidated damages. Eighty three per cent of the LD clauses we analysed carry no cap. The market position is a cap at five to ten per cent of the contract sum. Builders have accepted it. But you have to ask.
And number one. The absolute time bar. One hundred per cent of the contracts we analysed. Every single one where the drafting was identifiable. Kill the claim entirely if notice is late.
Miss a five day window, and it does not matter who caused the delay. The entitlement is gone.
Ask for ten business days. Notice as a requirement, not a bar. And build the habit that beats the clause anyway. Written notice, the day anything changes.
Five clauses. All negotiable before signature. Almost none after.
Know what you're signing.
General information about Australian subcontracts, not legal advice. Get advice on your own contract and facts.