Articles > Construction

What is the difference between an AS4000 and an AS2124 contract?

July 25, 2023   Liv ChumPhilip Evangelou

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    Whilst an AS4000 and AS2124 contract contain many similarities which include the fact that both require a licence fee to use it and are widely used forms of contract, they both possess distinctive features which differentiates them from one another. These features which make these contracts very different from each other range from: 

    • Extension of time (EOTs)
    • Authorisation of liquidated damages
    • Requirements for a notice of delay 
    • Time Bars 
    • The apportionment of concurrent delays 

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    1. Extension of Time (EOTs)

    In a AS4000 contract, a  contractor may claim an extension of time if the extension falls under a ‘Qualifying cause of delay.’ A qualifying cause of delay is defined as an act or omission of parties ranging from the superintendent, principal or other contractors. An example of this would be the fact that it would be right to assume an EOT has been granted  if the superintendent had not approved for an extension within 28 days of receiving the request. 

    On the other hand, obtaining an extension of time in an AS2124 contract relies on a ‘Qualifying cause of delay’ list that is much broader than the list of the AS4000 contract. For instance, the list caters for events that cause a delay both before and after the practical completion date. Such events include:

    • Industrial conditions occurring on or before practical completion date
    • Inclement weather occurring on or before the date for practical completion 
    • Delays caused by the principal, the superintendent or the principal’s employees, consultants, other contractors or agents 
    1. Authorisation of liquidated damages

    In an AS4000, a superintendent is required to authorise any liquidated damages by the principal. This means that there will be a delay when it comes to making the contractor liable for liquidated damages. In contrast, an AS2124 contract makes the contractor automatically liable for liquidated damages if there is a failure to reach practical completion by the date for completion.

    1. Notice of delay 

    Under an AS2124, a notice of delay is required to be issued to the superintendent and must contain details regarding the reason for the delay. Nonetheless, in an AS4000 contract, a notice of delay needs to be submitted to both the principal and superintendent.The notice of delay that is given under an AS4000 requires more detail than the AS2124 with respect to information regarding the cause of delay and the estimate of the delay. 

    1. Time Bars

    Time bars typically exist in a construction contract to bar or invalidate a party from making a claim outside the timeframe which both parties have agreed on. In an AS2124 contract, express time bars are incorporated. As a result, this means that upon a change in circumstances, contractors must acknowledge the change by making a claim within the prescribed time frame. 

    Contrary to this, no time bars exist in an AS4000 contract. This is in spite of the fact that the other party is able to claim for damages for a breach of contract upon a failure to comply with a claim. Nevertheless, there are various claims which lead to time bars being enforced in the AS4000 contract such as a claim relating to a latent condition. 

    1. The apportionment of concurrent delays 

    Under an AS2124 contract, a contractor will not be entitled to claim an extension of time for any causes of delay if it is initiated by a combination of both non-qualifying and qualifying causes of delay. This is in comparison to an AS4000 contract which enables a superintendent to apportion the delays according to the contribution which the different causes had to the overall delay. 

    In summary

    Although many similarities between both the AS4000 and AS2124 contract exist, it is fair to say that both the contracts have significant differences that ultimately set them apart. Consequently, it is these differences in aspects such as the extensions of time and time bars that allows principals to observe that the AS4000 is more in favour of the contractor and the AS2124 is in favour of the principal. However, when it comes to determining which contract works more in favour with your project, this requires a much deeper analysis as in most cases amendments will be made by the principal to either of these contracts. 

    Do you need assistance in further understanding the AS4000 or AS2124 contract? Contact our construction lawyers at 1300 937 574.

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    About Liv Chum

    Liv ChumLiv is one of OpenLegal's paralegals. Liv is a passionate student of the law, with a real interest in the way that business and legal requirements intersect.

    About Philip Evangelou

    phillipPhil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.

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