CPCCBC4003A: Part 1 requires you to select the building contract that is appropriate for the residential project provided: Select and prepare a construction contract Assignment, VU, Australia

Part 1 – Prepare a contract and all supporting documentation for a residential Project

Part 1 requires you to select the building contract that is appropriate for the residential project provided. You are then to complete the contract for the residential project. Completing the contract means that you are to complete and/or draft any supporting documentation for the contract that would be required for its acceptance by a client and approval by your shire and state. The supporting documentation is also to be provided to your assessor.

Prepare a contract around the following scenario:

The contract is between Peter Thompson and Supreme Constructions Pty Ltd. Mr. Thompson has received a number of quotations for his home build in Rowville and has decided to enter into a contract for the build with Supreme Constructions Pty Ltd as the builder. The basis of the contract is that Peter Thompson and Supreme Constructions Pty Ltd agree that the entire contract is conditional on Peter obtaining $328,000 of home loan finance from Westpac for which he has a current application pending, within 21 days of the execution of the contract.

Supreme Constructions Pty Ltd charges a variation fee $1,200 should a client request a variation to the signed contract. This fee is on top of materials, labor and the builder’s margin and this should be included in the contract. The total contract price is for $410,000 plus GST and Peter Thompson and Supreme Constructions Pty Ltd have agreed to Progress Payment Method A, with the maximum allowable deposit being charged. Both parties agree that progress claims and the final payment are to be claimed within 5 days of being submitted.

Both Peter Thompson and Supreme Constructions Pty Ltd agree that Peter is to pay the cost of crossover if Peter has not already provided it or it needs to be relocated.

The residence being built is a single story brick veneer home comprising 4 bedrooms, a double garage and a tiled roof totaling 28 squares.

Supreme Constructions Pty Ltd has provided Mr. Thompson with MBAV Specifications which Mr. Thompson has used. The plans for the project have been provided by Mr. Thompson and were developed by SJV Architects. Joan Jeffrey, from Supreme Constructions Pty Ltd, has prepared the Engineering drawings.

Supreme Constructions Pty Ltd has the required domestic builder’s insurance and also public liability insurance of $10,000,000.

The following building allowances are to be included in the contract:

•  Allow 9 days for either wet or extremely hot weather
• Allow 12 weekends in the construction period
•  Allow for two Rostered days off
•  Allow 8 days for builder’s holidays
• Allow for 3 public holidays within the contract construction period
•  Allow 5 days for the effects of the expected wet or extremely hot weather
• Allow for 5 miscellaneous delay days
• Peter Thompson and Supreme Constructions Pty Ltd have agreed to 120 days of building.

All service fees are to be included in the contract price. This includes costs associated with obtaining a building permit. All fixtures and fittings are included in the contract.

Peter has a planning permit for the project and Supreme Constructions Pty Ltd is obtaining the building permit upon the contract becoming unconditional.

Both Peter Thompson and Supreme Constructions Pty Ltd agree to a 13 week defect liability period.

An agreed amount for liquidated damages is Peter Thompson at $900 per week and Supreme Constructions Pty Ltd at $400 per week.

There are no materials or items of work to be supplied by Peter Thompson. All materials are new and no second hand materials are to be used.

The following Prime Cost items are to be allowed for in the contract:

2 toilets at $395 inclusive of GST plus 20% builder’s margin on each

1 angelhood at $500

Benchtops at $1,200

1 Oven at $800

As a Provisional Sum item, there has been an allowance made for 80 square meters for tiles and labor allowing $130 psm for both.

Part 2 requires you to write a report about the preparation of the contract for the residential project. You should explain:

•  the reason the particular contract was selected
• the legislative and regulatory requirements considered in preparing the contract
• the reason particular clauses were added or deemed not applicable to the contract, if appropriate
• how the causes for breach of contract were determined
• the requirements for the offer and acceptance of the contract
•  the requirements for termination of the contract
• how the rise and fall amounts will be determined
• the factors determining the schedule of progress payments for the contract
• the requirements for an extension of time on the contract
•  any other factors you considered in the preparation of the contract