In 2013, NZ Standards decided to update the 2003 version of NZS 3910, the main standard form building contract used in NZ. One of the reasons for the update was that extensive amendments were being made to the general conditions in many construction projects. NZ Standards incorporated many of the widely-used amendments in the new NZS 3910:2013, provided that such terms fairly allocated the risk between the contractor and the principal.
However, just a few months after its release, we are now seeing further extensive amendments being made to NZS 3910:2013.
We have heard of cases where there are 80 pages of special conditions. Many of the amendments are drafted to create unduly onerous obligations on one party, usually the contractor.
As has been seen on construction projects worldwide, when risks are not allocated fairly or appropriately, construction projects are highly likely to suffer from disputes, delays and increased costs.
[this post was written by Mary Haggie]