Residential Building Contracts for Works less than $5,000.00

There is no prescribed contracting requirements where the contract price or the reasonable market cost of the labour and materials involved is less than $5,000.00 (inclusive of GST). However, it should be noted that:

1. The maximum deposit that may be claimed remains 10% (Section 8).
2. The statutory warranties will still be implied into the contract (Section 18B(1)).

Notwithstanding that there is no requirement for the contract to be in writing, it remains a recommended practice to make a written contract to:

1. avoid disputes in relation to the price or agreed scope of works,
2. include important contractual terms that create additional rights where recovery action is required (for example to recover interest and legal costs), and
3. limit or exclude liability for consequential losses to the maximum extent permitted by law.

To avoid disputes about variations, including in relation to the extra costs of variations, a written form of contract variation should be documented and signed by the parties whenever the scope of works are varied.