By Greg Goldfayl
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Extra info for Construction contract administration
The most commonly used special condition not specifically provided for in item 3 is generally referred to as ‘Rise and fall’. This condition provides for progressive cost adjustment to compensate for fluctuations in the cost of labour and materials (see Chapter 8). Another common special condition requires the contractor to provide financial security for its obligation to pay nominated subcontractors (see Chapter 5). Under AS4000, deletions, amendments and additions to the Contract may be recorded in annexure part B, ‘Deletions, amendments and additions’.
Three areas of insurance are mandatory: 1 2 3 the works – that is damage to or destruction of the works public liability – damage to or destruction of the property of, and injury to or death of, persons not employed in the project workers’ compensation and employers’ liability – injury to or death of workers employed in the project. 44 PA R T 1 T h e c o n t r a c t u a l b a c k g r o u n d There are two methods of effecting the first two of these insurances: • • by the owner; or by the contractor.
The insurance must, if permitted by law (of the relevant Insurance and security 51 state or territory), provide indemnity for the Principal’s statutory liability to the Contractor’s employees (that is, against negligence and under the relevant health and safety legislation). The Contractor must ensure that all subcontractors are similarly insured (clause 18). Since it is unclear in what conceivable circumstances such indemnity would not be permitted by law, the conclusion may be drawn that this qualification exists just in case such circumstances should ever arise.