What are the Australian Building Industry Contracts (ABIC)

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What are the Australian Building Industry Contracts (ABIC)?

November 11, 2020         Jennifer Andrade

Australian Building Industry Contracts (ABIC) are standard-form contracts produced by Master Builders Australia with the Australian Institute of Architects. They are drafted solely for architects involved in a building project to use when they are administering building contracts. They cover a range of building projects including high-valued commercial projects to smaller residential projects. ABIC contracts are clear and understandable, simplifying the process of contract administration for architects and preventing any future issues from arising.

Why Use an ABIC Contract?

As ABIC contracts facilitate the process of administering a building contract, they ease intimidation upon parties as they incorporate contracts into their projects. This is achieved as ABIC contracts:

  • Are drafted in an easily digestible format with clear language minimising confusion, 
  • Are varied and cater to specific project needs,
  • Include ancillary documents explaining the ABIC contract further such as user guides,
  • Aim to evenly distribute liability of potential risks on each party. 

There are five main types of ABIC contracts that predominantly differ based on the type and value of the project. Each of these types are outlined below. 

Major Work Contracts 

Major Work contracts are suited to large scale projects with a value of $ 3,000,000 or more.

ABIC MW 2008 Major Works

These Major Work contracts are the most thorough of all ABIC contracts and are suited for non-residential and non-housing projects. They cover a plethora of minor issues including arbitration of any disputes and contract confidentiality. 

ABIC MW 2008 Major Works – Housing 

Alternatively, if a project is for housing purposes, an ABIC contract under this code is best.

These contracts are only for housing projects as they incorporate the necessary State and Territory provisions in place ensuring compliance to jurisdictional requirements. 

Simple Work Contracts 

Although Simple Work contracts are similar to Major Work contracts in their structure and guidelines, these contracts should be used for smaller projects valued between $500,000 to $3,000,000. Simple Work contracts may still apply to projects outside of this value range, however, further legal advice is necessary when determining this. 

ABIC SW 2008 Simple Works 

These ABIC contracts are suited to small scaled non-housing and non-residential projects. 

ABIC SW 2008 Simple Works- Housing 

Once again, these ABIC contracts are written in accordance with relevant State and Territory legislation over residential projects. Therefore, projects in line with this purpose may benefit from this type of ABIC contract. 

Commercial Cost Plus Contracts

The ABIC contracts are provided by the ABIC CP-2014 C Commercial Cost Plans and are used where it is difficult to ascertain the total cost when commencing the project. The fee included in the contract will ultimately indemnify contractors for any costs incurred during the project, either as a fixed amount or a percentage. 

Early Work Contracts 

ABIC contracts under ABIC EW-1 2003 Early Work are suited for early work or services for the preparation of a project. Early Work contracts may also be used for housing projects where the contract incorporates the relevant State or Territory provisions. 

Basic Work Contracts

These ABIC contracts under ABIC BW 2018 C Basic Works Commercial are short-form contracts that cover small commercial projects valued up to $50,000. They allow for transparency as they disclose all contractual details and conditions before the commencement of a project. 

Which Type of ABIC Contract is Right for Me?

When deciding on an ABIC contract, you must consider the type and value of the project undertaken, its individual needs, and any State and Territory conditions that may apply (particularly for residential and housing projects). 

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About Jennifer Andrade

Jennifer AndradeJennifer is a legal content writer with OpenLegal, with a particular interest in employment, contract and copyright law.