30.01.2014

New NZS Construction Contracts

For ten years NZS 3910:2003 was the form of construction contract most commonly used in New Zealand.  However, following industry feedback, NZS 3910:2003 has now been superseded by three new building and civil engineering contracts:

  • NZS 3910:2013 – Construction (Construction contract)
  • NZS 3916:2013 – Design and Construct (D&C contract)
  • NZS 3917:2013 – Fixed Term (Fixed Term contract)

The last in this trilogy became available on 28 January 2014, while the others were published in October 2013.

The splitting of NZS 3910:2003 into three separate standards provides more tailored general conditions for the different types of contracts and procurement arrangements that feature in the New Zealand construction sector.  Their publication follows feedback from the industry and lessons learned from NZS 3910:2003.

The new standards are easier to follow, contain new guidelines (that no longer have contractual status), have a more comprehensive tick-box type table for the Special Conditions, and include additional standard form documents (to save parties developing their own).   They also introduce some new terminology.

Among the substantive changes, the payment system has been simplified and contains different time periods, the method of calculating the price in cost reimbursement contracts has been set out more clearly and there is greater certainty about responsibility for arranging insurance and paying the deductibles.  The conditions are aligned with the Construction Contracts Act 2002 (as amended to date).

Standards New Zealand says the new contracts “reflect a fair risk allocation between the parties”.  While some parties will want to re-allocate risk in different ways for certain projects, overall, the need for Special Conditions should be significantly reduced.

These contracts are likely to become the default choice for most construction projects of any significance in New Zealand.  And their publication is timely given the anticipated spike in construction activity over the next decade.  Construction and engineering firms, and particularly those responsible for contract negotiations, should familiarise themselves with the changes.

Please click on pdf for a more detailed discussion of the key features of each new standard:[1]

For more information, or to discuss any aspect of construction law, please contact:

Nick Gilliesnick.gillies@heskethhenry.co.nz or +64 9 375 8767

Christina Bryantchristina.bryant@heskethhenry.co.nz or +64 9 375 8789

or other members of the Hesketh Henry Construction Law Team

 


[1] Unless otherwise stated, capitalised terms are defined terms in the applicable standard.
Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
Kerry
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

Related Articles / Insights & Opinion

UK Court of Appeal rules that that courts can order parties to engage in ADR: Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416
The England and Wales Court of Appeal (EWCA) has held that in certain circumstances, the courts can order parties to engage in alternative dispute resolution (ADR) or stay proceedings to allow the par...
24.07.2024 Posted in Construction & Disputes
Health and Safety Tiles
Updated Guidance: IOD and WorkSafe release ‘Health and Safety Governance – A Good Practice Guide’
While we wait with bated breath for the outcome in the prosecution of former Ports of Auckland CEO, Tony Gibson, officers’ duties are very much at the forefront of everyone’s mind. Section 44 of t...
23.07.2024 Posted in Employment & Health & Safety
Knowing your limits: High Court confirms liability caps in engineering consultancy agreements are consistent with Building Act duties
Design errors in a construction project can result in millions of dollars in loss.  Standard form consultancy agreements typically limit the amount that can be recovered for such errors.  The cap on...
09.07.2024 Posted in Construction & Disputes
glenn carstens peters npxXWgQZQ unsplash
Sender beware – how private are digital workplace conversations?
Following on from the recent Official Information Act request for correspondence between Ministry of Justice employees, employees may be wondering how private their online conversations with colleague...
04.07.2024 Posted in Employment
Concrete pillars impressive
TCC confirms Slip Rule limits in Adjudications
The Technology and Construction Court (TCC) has confirmed the narrow parameters of the ‘slip rule’ in the UK, which allows adjudicators to amend their determination to correct for any clerical or ...
02.07.2024 Posted in Construction & Disputes
Scots rule standard notification clause was condition precedent
In a warning for contractors, a Scottish Court has ruled that a standard form notification clause was a condition precedent to recovering time-related costs (TRCs) (FES Ltd v HFD Construction Group Lt...
01.07.2024 Posted in Construction
rape blossom
Anticipatory Repudiatory Breach and the Date of Default: Ayhan Sezer v Agroinvest
The decision in Ayhan Sezer v Agroinvest [2024] EWHC 479 (Comm) clarifies that where there has been an anticipatory repudiatory breach of contract, the “date of default” is the date of the breach ...
25.06.2024 Posted in Trade and Transport
SEND AN ENQUIRY
Send us an enquiry

For expert legal advice, please complete the form below or call us on (09) 375 8700.