P

Used in performance-based contracts where a party takes a share liability to pay an amount should the project fail to meet set targets.

A corporation that has a controlling interest in another business or company.

A secondary agreement between a Parent Company and a party to a principal agreement whereby the performance of obligations and/or liabilities of another party (eg the Contractor) arising under the principal agreement are the subject of a Guarantee. (See Performance Guarantee)

A rule of evidence that excludes the use of non-contractual materials (for example, conversations, prior correspondence) in determining the meaning and legal effect of words in a written contract. The rule is relevant to matters being heard in a court of law. There are exceptions to the rule.

A circumstance whereby a party (eg the Principal) retains or assumes rights to possess or occupy a portion of land or premises the subject of an agreement.

See Alliancing.

Two or more persons carrying on a business in common with a view to sharing profits. Generally, partners are jointly and severally liable for debts and obligations incurred in the course of the partnership business. A partnership has no legal personality separate from its members.

Costs incurred by a party to litigation in enforcing or defending their rights.

A defect that exists in project Works that are able to be ascertained or identified by making reasonable enquiries or investigations at the time of Practical Completion. (See Defect and Latent Defect)

A provision of a contract that makes the liability to pay money owing, or the due date for payment of money owing, contingent or dependent on the payment by a third party.

A claim made by a party (eg Contractor) for a payment due under an agreement (eg Progress Payment or Final Payment). The term 'payment claim' has a specific meaning under the Security of Payment Legislation.

A written response to a payment claim identifying the amount of the payment (if any) that the respondent proposes to make. It may include the calculations used to arrive at the amount of payment to be made, and may also indicate why that amount is less than the amount claimed. The term 'payment schedule' has a specific meaning under the Security of Payment Legislation.

A standard form of contract developed on behalf of the Property Council of Australia that is intended for use in non-residential building, engineering, construction and staging of projects. PC-1 purports to address the criteria of project financiers in particular.

'Persons conducting a business or undertaking' (PCBU).  A person upon whom a primary duty of care is imposed for the purposes of WHS legislation.

The 'Peak' or 'Prevention' Principle derives from the decision in Peak Construction (Liverpool) Ltd v McKinney Foundations Limited (1971) BLR 111. Where a party to a contract has been prevented from fulfilling its contractual obligations as a result of the conduct of the other party then the preventing party cannot insist upon strict contractual times for performance. Where the principle applies, time in the contract is set at large and is replaced by whatever is reasonable in the circumstances. The principle has important limitations. See further Gaymark Investments Pty Ltd v Walter Construction Group Limited (1999) 16 BCL 449; Turner Corporation Limited v Co-Ordinated Industries Pty Ltd (1994) BCL 202 at 212; Peninsula Balmain Pty Ltd v Abigroup Contractors (NSW CA) (2002) 18 BCL 322; and Spiers Earthworks Pty Ltd v Landtec Projects Corp Pty Ltd (No 2) [2012] WASCA 53.

Involves or inflicts punishment. A liquidated damages clause in a contract will be penal if it punishes the contractor for its breach, rather than providing the principal with compensation in the form of a genuine pre-estimate of damages.

A punishment imposed for an infraction or breach of a rule, law or a performance condition in a contract. For example, parties may agree that penalties apply for late payment or for delays in the completion of work.

A written guarantee or pledge by a person to guarantee the performance obligation of another (eg to properly complete construction or comply with the terms of a Contract). If there is a failure to perform then the bonding party will make good up to the amount of the bond. (See Insurance Bond, Guarantee, Performance Guarantee and Bank Guarantee)

A form of security provided by a party (typically the parent company of the Contractor) in favour of the Principal to guarantee the contractor's performance under the contract if the Contractor defaults.  (See also Deed of Guarantee, Undertaking and Substitution and Bank Guarantee).

Contractual performance criteria, especially in relation to projects for the supply or delivery of Infrastructure, plant or equipment. Such criteria are useful for determining whether Works produced by a Contractor conform with the terms of the Contract.

An Act that deals with security interests over personal property. The PPSA was introduced in 2009 to replace approximately 70 pieces of existing legislation throughout Australia that regulated security interests in personal property. The PPSA became effective on 30 January 2012. The PPSA introduces the Personal Properties Securities Register which provides a single national noticeboard of security interests in personal property. See Personal Property Securities Register.

A national online register of all personal property that has security interests registered against it. The PPSR acts as a noticeboard rather than as a definitive record of security interests in personal property. It is not a register of title or ownership of personal property. The Insolvency and Trustee Service Australia is the Australian Government agency responsible for administering the PPSR.

A plan of an area of land under the Torrens system of land that depicts the extent to which the land has been or is proposed to be divided into separate registrable allotments.

Documents to be filed in court that state a party's case in litigation. (See Statement of Claim and Defence)

The on-site construction requirements for plumbing and drainage associated with all classes of buildings which is contained in Volume Three of the National Construction Code (NCC).

A PMSI is short for 'Purchase Money Security interest' which is a special category of security interest under the PPSA. A Purchase Money Security Interest is defined in section 14 of the PPSA. Subject to strict registration requirements, a PMSI has 'super priority' over other types of security interest under the PPSA.

The Contractor’s right to sufficient access, use and control of a site to enable the commencement of works.

An agreement between a public agency and a for profit organisation. The skills and assets of each sector may be shared and the risks and rewards associated with the delivery of a Service and/or Infrastructure may also be shared.  Also known as a PFI - Private Finance Initiative.

A 'PPS Lease' is an interest in personal property that is deemed to be a security interest under the PPSA. 'PPS Lease' is defined in section 13 of the PPSA. A PPS Lease may include certain leases or bailments of goods depending on the term of the agreement, type of goods and the business practices of the lessor/bailor.

That stage in the carrying out of work under a construction Contract when the Works are substantially complete (save for minor Defects or omissions) and reasonably capable of being used for their intended purpose. The requirements for practical completion are usually specified in the agreement. Also referred to as substantial completion.

See Advance Payment Bond: A bond issued to the Principal by a Financier at the request of a Contractor to secure any Advance Payment made by the Principal.

A bond issued to the Principal by a financier at the request of a Contractor to secure any advance payment made by the Principal. Aslon known as an Advance Payment Bond.

Precommissioning refers to any testing, checking and other works specified in the Contract to be carried out by the contractor in preparation for commissioning.

The bidder or tenderer selected by the principal following a tender process. The preferred bidder is invited to enter into a contract for the Works or Services the subject of the Tender.

These are the steps required for work to go ahead or be properly completed but do not form part of the work. The costs of preliminaries include temporary works, utilities, setting-out, testing materials, supervision, cleaning, removal of rubbish, handover and repairs during the defects liability period.

Prior to an Arbitration the parties are entitled to meet with the Arbitrator to discuss preliminary or interlocutory issues. Challenges to the appointment of the particular Arbitrator can be brought during these conferences.

A legal principle deriving from the decision in Peak Construction (Liverpool) Ltd v McKinney Foundations Limited (1971) BLR 111 whereby if a party to a contract has been prevented from fulfilling its contractual obligations due to the conduct of the other party, the preventing party cannot enforce strict adherence to contractual times for performance.  The prevention principle is closely aligned to the principle that no party may benefit from its own breach of contract.  It is often considered in the context of determining a party's contractual entitlement to liquidated damages.

A list setting out each item of material or work required for construction and the type, cost per unit, estimated quantity and estimated total price of each item, submitted by the contractor to the superintendent or by the subcontractor to the head contractor. The 'priced bill' is used in establishing the price of the variations to the contract and to determine progress payments.

An item to be supplied under a construction agreement, usually for materials for a stated price. (See Prime Cost Sum and Provisional Sum)

An amount included in the overall contract price specifically relating to a Prime Cost Item.

The party for whose benefit the project is to be constructed. Also known as Proprietor, Owner, Developer, or Employer.

A person or company appointed to be responsible for the management and control of a workplace for the purpose of a construction project and meeting  occupational health and safety requirements of a construction site, as required by the relevant State or Territory WHS and OHS legislation.

Often a defined term in standard construction contracts (eg AS4300-1995), this term is frequently used to define the documents which form part of the contract and to set out, amongst other things, the purpose for which the Works are intended.

The legal rules protecting a person's right not to disclose certain documents to a court. Common illustrations of privilege include legal professional privilege, without prejudice privilege and privilege over documents created for the purposes of litigation.

The general legal principle that only those persons who are parties to a contract may enforce it.

The rules relating to integrity, fairness and honesty in a procurement process.

A contract that operated during the pre-award phase of a procurement process as a separate contract between competitive tenderers and the tender inviter. In contrast, the main contract that is awarded to the successful tenderer when its bid is accepted.

A policy of insurance taken out in relation to loss or damage caused by a person or persons acting in breach of its duty to act in a professional capacity.

A certificate generally issued by the Superintendent or the Certifier, to the builder and the principal, which certifies the amount of work completed and the amount for which the builder is entitled to payment from the principal.

A claim made by the builder seeking payment of money from the principal proportionate to the amount of work completed to date. Progress claims are frequently made on a monthly basis.

A payment of money made by the Principal to the builder in response to the builder's Progress Claim.

A package of documents compiled for the purpose of defining the objectives, design parameters, plans and specifications, budget or other matters relating to a project.

A group of stakeholders in a project assembled to monitor and control issues relating to project planning and/or implementation such as scope variation and development, defect issues and general progress of works.

The method of constructing or supplying the Works or Services relating to a project. There are many different types of project delivery methods. Examples include construct-only contracts, design and construct contracts, design, construct and finance contracts and construction management contracts.

A Project Manager can either be: (a) the person who is employed by the contractor and has authority and responsibility for conducting the project and meeting project objectives (also often known as the Project Director); or (b) the person or company engaged by the principal to administer a number of the principal's responsibilities under the contract.

See Delay and Disruption Costs: Extra costs incurred by the Contractor as a result of interruption or reduced efficiency in performing the Works, which are recoverable if permitted by the Contract or at common law. These costs may include such things as the hire of plant or unproductive labour.

A form of Estoppel in which a promise has been made from one party to another and the other party has relied on that promise to their detriment. This doctrine is designed to stop parties making promises and denying they were made.

An organisation dedicated to lobbying for and supporting the interests of persons and businesses engaged in the property sector.

The Court's apportionment of a plaintiff's loss or damage between concurrent wrongdoers. The liability of a wrongdoing party for a claim will be limited to an amount that reflects the proportion of the damage or loss that a court considers just having regard to the extent of that party's responsibility for the damage or loss.  Proportionate liability is the opposite of joint and several liability, where one wrongdoing party can be found to be liable for the whole of the damage or loss, notwithstanding that they are only partially responsible for it. It is codified in various legislation across Australia.

A sum representing an estimate of the cost of items of work included in the Contract Sum for which the builder does not wish or is unable to provide a definite price. The contract will include a procedure for valuing the builder's entitlement for performing the work if the principal elects to proceed with it.

Third party liability insurance that generally covers bodily injury or death of persons and/or property damage.

Generally refers to minor items of incomplete works or defects.