• Calderbank Offer

    A written offer of Settlement made by one party to the other party in a dispute which is not disclosed to the court except in relation to the question of costs. Certain costs consequences flow if a Calderbank offer is not accepted. For example, a plaintiff makes an offer to accept an amount of $100 from the defendant in settlement of its claim for $200. If the defendant rejects the offer, and the plaintiff subsequently obtains judgment for $100 or more against the defendant, it will be open to a Court to order that the defendant pay the plaintiff's costs on a party and party basis up to the date of the offer, and on an indemnity basis from the date of the offer. Many courts have rules that prescribe procedures relating to offers of settlement.

  • Call Option

    An option under which the purchaser may exercise an entitlement to buy an asset at an agreed price. The option may be exercisable during a specified period, or on a particular date.

  • Cap on Liability

    Limit of Limitation of Liability for a defined cause of action to a specified or maximum amount.

  • Carbon Tax (Carbon Price)

    This system puts a price on the carbon pollution that a nation's largest polluters produce. Carbon taxes have been rejected by Australia's parliament in favour of an emissions trading scheme.

  • Cash Retention

    A form of Security, typically held by the Principal, to enforce the Contractor's performance of its contractual obligations. It involves withholding of a percentage of each payment claim made by the Contractor, with the withheld money eventually being transferred to the Contractor after completion of the project. (See also Security.)

  • Causation

    The relation of cause to effect. That is, a party's breach must have actually caused the other party to suffer damage. It is an element of many actions including Negligence.

  • Caveat

    A notice lodged with a land registry to protect an interest in land. Where there is a caveat, it is not possible for another entity to deal with the land without the consent of the caveator (person who lodged the caveat) unless the caveat lapses or the caveat has been removed by the party who lodged the caveat or a court order.

  • Certificate of Completion

    See 'Certificate of Practical Completion'.

  • Certificate of Making Good Defects

    A certificate issued by the Superintendent certifying that all Defects in a construction project have been rectified.

  • Certificate of Practical Completion

    A certificate issued by the Superintendent or Independent Certifier certifying the date on which the project reached the contractually required standard of completion. Also known as a Certificate of Completion and a Completion Certificate.

  • Certificate of Title

    A certificate issued for Torrens Title land which is a copy of the entry in the register recording holder(s) of title to that land. Information on the certificate includes identification of the relevant parcel of land, the registered proprietor, and other interests in the land (e.g. details of mortgages).

  • Certifier

    An architect, engineer or quantity surveyor responsible for issuing certificates under a construction contract certifying various aspects of the project. See also Independent Certifier.

  • Chambers

    The office of a barrister or judge.

  • Charge

    A form of Security given over property. A charge may be given over specific items of property (a fixed charge) or over property belonging to a certain class or category (a floating charge). A floating charge will affect all property within the relevant class or category at the time when the chargee exercises its rights pursuant to the charge.

  • Chose in Action

    A right enforceable by action, including the enforcement of rights under a Contract.

  • Civil Works

    Operations that loosen, remove, deposit, shape or compact earth, soil or rock. Also known as groundworks or Earthworks.

  • Claims-made policy

    An insurance policy providing coverage for claims made during the period of insurance, regardless of when the event which gave rise to the claim occurred.  Most professional indemnity insurance policies are claims-made policies.

  • Clerk of Works

    A representative of the Principal who monitors the performance of the Works and undertakes inspections.

  • Cold Shell

    A stage in building works when a building (or a part of a building) contains only a basic functioning core and services and an incomplete interior.  Fitout works such as air conditioning, lighting and electrical, ceilings, walls, fixtures, fittings and completion of services are required to complete the interior.

  • Collateral Contract

    A Contract which is ancillary or related to, and the consideration for is the making of, some other Contract.

  • Collateral Security

    Security for a debt or the performance of an obligation which is provided in addition to a primary form of Security.

  • Collateral Warranty

    Also known as a 'sided warranty', being a Contract that is additional to the primary Contract to which it relates, which creates a contractual relationship between a party to the Contract (usually the Principal) and a third party who has an interest in the Works (such as a Subcontractor, Lessee or Financier). Parties to a Collateral Warranty have rights against the others, for example where there is a breach of the primary Contract.

  • Collusion

    The fixing of prices in an anti-competitive manner. The term is often used in the context of Contractors 'fixing' tenders.

  • Commencement Date

    The date on which something will or does commence. For example, the date on which a Tenant commences paying rent and is entitled to enter into possession under a Lease or which a builders contract becomes unconditional. Also known as Date for Commencement.

  • Commercial Arbitration Acts

    Legislation passed by each State and Territory of Australia to regulate arbitration and provide for court supervision of commercial disputes. The legislation adopts the 2006 revision of the UNCITRAL Model Law on International Commercial Arbitration.

  • Commercial Building Disclosure (CBD) Program

    This is a national regulatory program designed to improve the energy efficiency of Australia’s large office buildings. (See also Building Energy Efficiency Disclosure Act 2010 (Cth) and Building Energy Efficiency Certificate.)

  • Commissioning Contract

    A Contract to perform the commissioning of machinery or equipment, involving operation of the equipment under test conditions until specified performance criteria are achieved.

  • Common Law

    The unwritten law derived from the traditional law of England as developed by judicial precedence, interpretation, expansion and modification. There is a single common law of Australia which creates specific criminal offences, contains rules of evidence and practice and procedure, and sets out the rights and privileges of citizens. Generally, a statute will not be taken to have repealed the common law unless it explicitly or implicitly shows such an intention.

  • Commonwealth Land

    An area which is owned or held under Lease by the Commonwealth or a Commonwealth agency, land and airspace over the land held in an external territory and the Jervis Bay territory, the coastal seabed, waters and airspace of Australia or an external territory, and any other area of land, sea or seabed which is included in a Commonwealth reserve. (Section 27 of the Environment Protection and Biodiversity Conservation Act 1999 (Cth)).

  • Community Title

    This combines concepts of traditional subdivision and strata subdivision, where land is divided into privately owned lots and common property for which the owners of lots share responsibility. The common property may include parks, recreational facilities, shops and parking.

  • Competition and Consumer Act 2010 (Cth)

    This Act is the new name of the Trade Practices Act 1974 (Cth) and contains the Australian Consumer Law in Schedule 2. (See also Australian Consumer Law.)

  • Completion

    See Practical Completion (PC).

  • Completion Certificate

    See Certificate of Practical Completion.

  • Compliance Schedule

    A schedule setting out criteria to be complied with, and a time by which compliance must be achieved.

  • Compulsory Acquisition

    The acquisition of land by a government Authority with no consent of the owner of that land required. The acquisition must be 'on just terms' which typically involves payment to the owner of fair, timely compensation which approximates market value of the property.

  • Concession Agreement or Deed

    An agreement by a government to grant particular privileges to another entity. In the construction context, concessions are often effected by deeds that entitle a private entity to build public infrastructure.

  • Concessionaire

    The entity to which a concession is granted under a Concession Agreement.

  • Conciliation

    A non-binding process where a neutral third party assists parties to resolve a dispute. The conciliator may suggest terms of settlement and give expert advice on the issues. In this way, a conciliator plays a more pro-active role in the dispute resolution process than a mediator.

  • Conclave

    A process where expert witnesses attend a joint conference in an attempt to agree relevant issues in a dispute. Often used in a Reference and has the potential of saving hearing time and cost.

  • Concurrent Delay

    A delay to the progress of the Works under a construction contract which runs concurrently with another delay to the progress of the Works. For example, the Works may be simultaneously delayed by rain and an industry strike. A construction contract will generally prescribe whether or not, or to what extent, a Contractor is entitled to Extensions of Time where delays not entitling the Contractor to an Extension of Time are concurrent with delays for which the Contractor is entitled to an Extension of Time.

  • Concurrent Liability

    Liability where two or more persons or entities are liable in respect of one occurrence of loss or damage. Where the damage was caused by the persons or entities acting together, the concurrent liability is 'joint'. Where the damage was caused by the persons or entities acting separately, the concurrent liability is 'several'.

  • Condition Precedent (CP)

    A specified condition which must be fulfilled before the terms of an executed Contract will become effective.

  • Condition Subsequent

    A specified future condition which, if fulfilled, automatically results in a specified contractual outcome. e.g. payment of money . (Contrast with Condition Precedent)

  • Conditional Bond

    A Performance Bond which requires some condition to be satisfied before a call can be made on the bond. Such a condition may be that the Principal may not call upon a Performance Bond given by a Contractor unless there has been a breach of Contract by the Contractor or some period of notice of the intention to call the bond has lapsed.

  • Confidentiality

    An obligation which is often imposed on parties to a Contract not to disclose to third parties certain information.

  • Consent Authority

    The applicable authority with jurisdiction for determining a Development Application or an application for a complying development certificate. This will usually be the relevant council, but may also be a Minister, the Planning Assessment Commission, a joint regional planning panel, a public authority and in the case of a complying development certificate an accredited certifier (section 4 Environmental Planning and Assessment Act 1979 (NSW)).

  • Consequential Damage

    See Consequential Loss.

  • Consequential Loss

    Loss that occurs as a consequence of a breach of Contract and which is within the contemplation of the parties at the time the Contract was entered into, but is not a loss that flows directly from the breach. Consequential loss is a secondary loss to a loss suffered directly as a result of the commission of the wrong. Consequential loss may include economic loss such as loss of profit and loss of earnings. (Contrast with Direct Loss)

  • Conservation Area

    Land which has been set aside for the purposes of conservation, including national parks, nature reserves and wilderness areas. May also refer to land which is the subject of a conservation agreement, being an agreement entered into between the government and a private owner of land providing for the conservation and management of an area of the land or of a particular plant or animal species found on that land.

  • Consideration

    An act (such as the payment of money or the exercise or withholding of the exercise of a right in relation to another person) by one party in exchange for the performance or non-performance of an act by the other party or a promise by that party to perform or not perform certain acts. Consideration is a necessary component for the formation of Contract (it is not necessary for the enforcement of a deed). Consideration must be legal, enforceable and sufficient but need not be an adequate exchange for the other party's consideration.

  • Consortium

    A group of entities which combine to form a single unit in order to tender for and subsequently design, construct, finance or operate a major project.

  • Construct Only

    A contract between a Principal and a Contractor whereby the Contractor is engaged to carry out only construction work. The Principal engages Consultants to design the project, and provides the completed design to the Contractor. The Contractor bears no responsibility for design and gives no warranty as to fitness for purpose.

  • Construction Management

    A form of procurement by which the Principal enters into direct contracts with specialist trade contractors, which are managed by the construction manager. The Principal pays the cost of these contracts as well as a management fee to the construction manager. The construction manager usually oversees and monitors the whole of a construction project, from the tender process to the design phase to the actual construction of the works.

  • Construction Program

    A statement in writing of the major activities of Works under a Contract and the dates, times, sequence and links between activities undertaken by the Contractor. (See also Gantt Chart)

  • Constructional Plant

    Machinery and equipment used to carry out construction work but does not include any apparatus permanently fixed to the site.  See also Contractor's Equipment.


  • Constructive Acceleration

    When a Contractor decides to accelerate to meet the Date for Practical Completion due to a failure by the Principal to grant the Contractor an Extension of Time. The decision to accelerate is a commercial decision to incur costs of Acceleration to avoid liquidated damages. In the United States, Contractors have long been able to claim their costs of constructive acceleration where a Principal refuses to grant a legitimate Extension of Time and a recent case in the United Kingdom suggests that Contractors might be entitled to constructive acceleration costs. There has not been an Australian case in which a Contractor has recovered the costs of constructive acceleration purely on that basis. However, there have been a small number of Australian cases in which where the Principal's refusal or failure to grant the Extension of Time was found to be a breach of the Contract and the Contractor was reimbursed for the cost of the Acceleration Costs in the form of damages for breach of Contract.

  • Consultancy Agreement

    A contract for the engagement of a Consultant, whereby the Consultant agrees to perform specified services for a fee.

  • Consultants

    Independent entities or persons engaged to give professional or expert advice in a construction project. They include Architects, Engineers, surveyors and specialists such as environmental experts.

  • Contamination

    The presence in, on or under land of a substance at a concentration above the concentration at which the substance is normally present, and where that presence presents a risk of harm to human health or any other aspect of the environment.  (State based legislation may apply, for example  section 5, Contaminated Land Management Act 1997 (NSW))

  • Contingency Sums

    An amount included in a Contract Sum as part of a Tender or estimate to cover unplanned work or other unforeseen costs.

  • Contra Proferentem Rule

    A legal rule that in the event of ambiguity, particularly in relation to exemption and exclusion clauses, a clause in a Contract will be interpreted against the party who prepared or drafted and was intended to benefit from, or relied on the clause.

  • Contract

    For a contract to be legally enforceable, certain requirements concerning its formation must be satisfied.: (a) the parties must intend to create legal relations; (b) there must be an offer by one party and an acceptance by the other party; (c) there must be certainty of agreement; (d) there must be Consideration; and (e) the parties must have capacity to enter the contract (eg be of certain age, mental capacity).

  • Contract Administration

    The process of interpreting and applying the specific provisions of a Contract. It is usual for the Principal to appoint a person to fulfil this role, as well as keeping informed of the progress of the Works and liaising with each party if disputes arise. (See also Architect, Administration Manager, Contract Administrator, Superintendent.)

  • Contract Administrator

    See Superintendent.

  • Contract Documents

    All documents forming part of the Contract. May include schedules, Contract Drawings and Specifications, and Tender documents.

  • Contract Drawings

    Drawings describing the work to be performed.

  • Contract Sum

    The price the Principal agrees to pay a Contractor for the performance of Works. A Contract Sum may be varied during the course of the Contract as a result of a Variation of the Works or other entitlement (eg delay costs). Also known as Contract Price.

  • Contract Works Insurance

    Insurance which covers risk of damage to all work that the Contractor is contracted to execute and which usually expires on Practical Completion.

  • Contractor

    The builder who carries out the construction work under a Contract. A contractor may engage Subcontractors under separate Subcontracts to carry out portions of the work, in which case the Contractor is commonly known as the main Contractor. (See also Builder).

  • Contractor’s Equipment

    Constructional Plant but does not include any apparatus permanently fixed to the site.

  • Contractor’s Program

    A statement in writing of the major activities of Works under a Contract and the dates, times, sequence and links between activities undertaken by the Contractor. Also referred to as Construction Program.

  • Contributory Negligence

    Where a plaintiff by its negligence contributed to its own loss. Contributory negligence is not a complete defence to a negligence claim, but operates only to reduce the defendant's liability to the plaintiff.

  • Conversion

    The intentional use of goods or personal property (chattels) without lawful justification in a manner inconsistent with the rights of an owner.

  • Copyright

    A bundle of rights possessed by the owner of copyright in a work, including the exclusive right to copy, publish or transmit the work online, or to authorise others to do so. An intellectual property right (other examples of intellectual property rights include patents, rights in circuit layouts, registered designs, trademarks and any right to have confidential information kept confidential). Copyright is regulated in Australia by the Copyright Act 1968 (Cth). Copyright applies only to something physical and tangible such as a drawing, diagram, plan, model or building, all of which are examples of 'works' under the Copyright Act 1968.

  • Cost Overrun

    Where actual development costs exceed allocations or predicted development costs in the project budget.

  • Cost Reimbursement Contract

    A Contract that provides for a Contractor to be paid only for its costs of carrying out the Works.

  • Cost-Plus Contract

    A Contract where the Contractor is paid the actual cost of work undertaken, plus a percentage over and above those costs on account of margin and preliminaries. These contracts can be used when the total amount payable to the Contractor cannot be determined at the time of entering into the Contract, or the scope of work is unknown, and the Principal takes the risk of that cost. The use of Cost-Plus contracts is regulated by domestic building legislation in many States.

  • Costs Order

    A court order against the unsuccessful party in litigation to pay all costs incurred in the proceedings by the successful party. What is to be included in the costs is at the discretion of the court but will generally include the successful party's legal expenses and other related costs.

  • Costs to complete

    An analysis of acquisition costs, construction costs, finance costs and other costs on a periodic basis (usually monthly and against the project budget) to ascertain how much has been spent on works and how much remains to be spent before a project achieves practical completion.

  • Counter-Claim

    A claim by a Defendant against a Plaintiff, raised in response to, but not in defence of the Plaintiff's primary claim.

  • Critical Path

    In programming a construction project or any inter-related set of activities, required tasks are linked together in chains of 'dependencies' which reflect the sequence in which they must be done (such as first laying foundations, then building the walls, then painting). The sequential chain which will take longest to finish is the critical path and is used to estimate the time within which Practical Completion can be achieved.

  • Cross liability

    A cross liability clause in an insurance policy requires the insurer to accept the term 'insured' as applying to each insured person as if a separate policy of insurance has been issued to each insured person so that the policy responds to liability from one insured to another. Cross liability clauses can also be important where one insured causes his/her policy to become void (but not the whole policy).

  • Cross-Claim

    A Defendant may bring a cross-claim against a Plaintiff or third parties in an action before the court. A cross-claim should be pleaded in the existing action if it arises out of the same facts or transactions as the Plaintiff's claims. A Defendant's cross-claim against a third party need not be related to the subject matter of the Plaintiff's claim. A third party to the proceedings can also bring a further cross-claim against the original Defendant and/or the original Plaintiff. (See also Counter-claim)

  • Cross-indemnity

    A cross indemnity clause requires two or more contracting parties to indemnify each other for loss or damage arising out of similar breaches or circumstances. For example, the cross indemnity clause may require the Principal to indemnify the Contractor for claims for personal injury caused by a person for whose conduct the Principal is responsible, with a reciprocal indemnity from the Contractor to the Principal requiring the Contractor to indemnify the Principal for claims for personal injury caused by a person for whose conduct the Contractor is responsible.