What it does
The Construction Contracts (Former Provisions) Act 2004 (WA) (the Act) establishes a statutory framework to secure cash flow in the construction industry by regulating the content of construction contracts and providing a rapid adjudication mechanism for payment disputes. At its core, the legislation operates on three interlocking pillars: prohibition of certain unfair terms, implication of default terms where contracts are silent, and compulsory adjudication of payment disputes.
Part 2 Division 1 renders specific provisions void or modified. Section 9 declares ineffective any "pay if paid" or "pay when paid" clause that makes one party's liability to pay contingent on receiving payment from a third party. Section 10 caps payment periods at 42 days after a claim is made, automatically rewriting longer periods. Section 11 allows regulations to prescribe further prohibited terms. These prohibitions do not void the entire contract; s.12 preserves the remainder.
Division 2 implies terms from Schedule 1 where the contract lacks written provision on the topic. Schedule 1 cl. 1 requires variations to be agreed as to scope and price. Clause 2 entitles the contractor to a reasonable amount for performed obligations. Clauses 3 and 4 grant rights to claim progress payments at any time after performance. Clause 5 prescribes the content of a valid payment claim, including itemisation sufficient for assessment. Clause 7 requires a responding party to issue a notice of dispute within 14 days if rejecting or disputing a claim, and mandates payment of the undisputed amount within 28 days. Interest at the Civil Judgments Enforcement Act 2004 rate accrues on late payments (Sch. 1 cl. 8). Title to unfixed goods passes on payment or fixture (cl. 9), while cl. 10 imposes duties on insolvent principals to preserve the contractor's repossession rights. Retention money must be held on trust (cl. 11). Section 23 applies the and the Act's definitional sections to these implied terms.