What is an AS 2124 Contract?
AS 2124, also known as the Australian Standard AS 2124-1992 General Conditions of Contract, is a commonly used contract in the construction industry. To use this contract, you will incur a licence fee. These fees vary according to the type of license you choose, which depends on your circumstances. AS 2124 is the preferred legal document by various governmental departments.
It is important to note that AS 2124 are general conditions of a contract. However, you still need to merge these conditions with your other contractual terms, and then complete the annexures. Furthermore, when paging through this contract, you may notice that the other party will request a letter of acceptance. This is because AS 2124 is, again, merely general conditions, and does not offer anything to physically sign.
Elements of AS 2124
Here are some elements of AS 2124 that you should know:
- A fixed price for the contractor’s work.
- Fixed timeframe for completion.
- Practical completion is a date entailing when a construction project can be used practically. For example, companies may move into their offices which are still undergoing construction. If the construction is not finished by this date, the contractor will become indebted to the principal for any liquidated damages.
- Contractors are liable for liquidated damages.
- If there are any delays, contractors must still be paid.
- There are express time bars. This means that the contractor must make a claim within a prescribed time-frame if any circumstances change.
- If the contractor encounters any latent conditions, they bear the burden of any additional costs but may claim for an extension of time.
- Contractors may claim for unfixed plant and materials provided it meets certain conditions.
- In relation to late progress payments, interest under AS 2124 is compounded six monthly.
To Sum Up
While AS 4000 is becoming popular throughout the construction industry, AS 2124 is still readily used. When entering into AS 2124, it is important that you know what the general conditions entail.
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