Implications of non-compliance with the Building and Construction Commission Act (QLD) 1991

At common law there is no requirement for an enforceable contract to be in writing or for it to be accepted in the same way.  It is not uncommon for a contract to be wholly oral, or even partly written and partly oral.  Similarly, acceptance or entry into a contract (be it written, oral, or partly written and partly oral) does not have to be in writing but can be by conduct which evidences acceptance of the contractual offer made.

A simple example is a request for a quote to supply “widgets”, the supplier says they can supply the widgets but requires a 10% deposit and the buyer pays the deposit.  The buyer may not have spoken words to the effect that the quoted price has been accepted, but the conduct in paying the deposit evidences acceptance. 

This common law position however does not apply to contracts for domestic building work in Queensland and can have significant implications for domestic building contractors.

What if the amount of the building work is more than $20,000

Schedule 1B to the Queensland Building and Construction Commission Act (Qld) 1991 (QBCC Act) governs the operation of domestic building contracts in Queensland.

Section 14 of Schedule 1B to the QBCC Act outlines the requirements for a complying contract for domestic building work with a value greater than $20,000.00, including but not limited to the contract having to be in a written form, dated and signed by or on behalf of each of the parties to it (sub-section 14(2)).

Section 13 of Schedule 1B to the QBCC Act has a similar requirement for contracts for domestic building work with a value of less than $20,000.00.

What are the implications for failing to comply with sub-section 14(2) of the QBCC Act?

Section 44 of Schedule 1B holds that unless a contrary intention appears in the QBCC Act, a failure by a building contractor to comply with a requirement under the QBCC Act in relation to a domestic building contract does not make the contract illegal, void or unenforceable.

A contrary intention is however found in sub-section 14(10) of Schedule 1B which holds that a contract for domestic building work only has effect if it complies with sub-section 14(2) (i.e. be in a written form, dated and signed by or on behalf of each of the parties to it).

It is rare for a building contractor to not reduce into some form of writing the scope of building work they are prepared to undertake and at what price.

More commonly, a written contract is presented, the parties agree orally but one or both parties fail to sign and date the written contract.

Decisions such as Tsunoda v Decretal Pty Ltd [2010] QCAT 416 make it clear that as a consequence of this statutory regulation of domestic building contracts, any entitlement for a builder to recover for works performed where there is no written contract will be constrained to remedies such as quantum meruit claims.

What is a quantum meruit claim?

Moreover, by commencing building work in circumstances where there has been a failure to comply with section 14 of Schedule 1B, the building contractor upon prosecution in reliance upon section 30 of Schedule 1B is liable to a fine of up to 100 penalty units.^[1]

Takeaways

Before commencing any domestic building work, building contractors must ensure a compliant contract has been signed and dated by all parties to it.

Links and further references

Legislation

Queensland Building and Construction Act (Qld) 1991

Further information about domestic building contracts

If you need assistance regarding domestic building contracts, contact Dundas Lawyers Gold Coast for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

[1] At the time of writing a penalty unit was $130.55.