After 28 years and an extensive review process by the Standards Australia Committee MB-010, including public consultation, the Australian Standard General Conditions of Contract, AS4000, has finally been updated. The updated AS4000 can be accessed here AS 4000:2025 | Standards Australia Store.
As foreshadowed in our previous article, Have your say on the new AS4000-2024, the amendments to AS4000 are not radical. As the brief to MB-010 did not extend to changes to risk allocation, the current allocation of each party’s obligations and entitlements remains the same and the practice of amending the contract to alter risk allocation will likely continue.
Key changes which have been included in the AS4000 following public consultation:
- a new provision allowing the Principal to appoint the Contractor as Principal Contractor under the relevant work health and safety or occupational heath and safety legislation;
- an additional provision in the Security clause requiring the release and return of all Security as soon as practicable after the resolution of all Disputes where the contract has been terminated; and
- the addition of some definitions such as ‘Electronic Document’ and ‘Public Holiday’.
Key additions and changes which have been included in the new AS4000 generally:
Formal Instrument of Agreement (FIA)
The AS4000 now includes a simple standard FIA for ease of execution but maintains the option for parties to constitute the contract without using an FIA, such as by a letter of acceptance.
New legislative provisions
Provisions have been added to address legislative obligations under the Personal Property Securities Act 2009 (Cth) and A New Tax System (Goods and Services Tax) Act 1999 (Cth), neither of which existed when the original AS4000 was drafted in 1997. However, the contract does not deal with any security of payment legislation given it differs amongst the states and territories.
Dispute resolution
A complete overhaul of clause 42, Dispute Resolution, provides more options for parties and clearer avenues for dealing with disputes. Under the updated drafting, the parties will select a dispute resolution regime in Annexure Part A, which will determine which dispute resolution options apply. The options include negotiation, mediation, arbitration, expert determination (with the option to make it interim binding or final and binding) and appointing a dispute avoidance board.
If the parties do not select these options, then a default position of negotiation and then litigation will apply.
Email notice
Provision for notices under the contract to be provided via email have been included.
Deed of Novation
A pro forma deed of novation for novating subcontractors to the principal has been included as Annexure Part D.
Guidance notes
Guidance notes have been inserted for some items in the Annexure Part A. For example, in Item 28 regarding liquidated damages, there is a note that specifying damages as “$Nil” or Zero is likely to result in no liquidated or general damages being payable. Specifying “N/A” or “Zero” could lead to uncertainty and should be avoided. It is also noted that liquidated damages are not a taxable supply for GST purposes.
In addition to the specific amendments listed above, the following drafting updates have been made throughout the AS4000:
- the adoption of consistent language for time periods with the use of ‘as soon as practicable’, rather than various other terms;
- the use of ‘must’ instead of ‘shall’; and
- including all defined terms in clause 1, rather than spread throughout the contract.
For ease of use, the major changes to the updated AS4000 are listed in the preface. Now that the revised AS4000 has taken effect, Standards Australia has proposed to revise further documents in the AS4000 suite such as the AS4902-2000 General Conditions of Design and Construct and the AS4901-1998 Subcontract. We also note that the new AS4000 supersedes the AS2124-1992 General Conditions of Contract, so companies and government entities which use that contract will need to look for alternatives as it is no longer a current standard.
