28 Years in the Making: The New AS4000:2025 Explained
Same, same but different – the long-awaited AS4000:2025 is released.
The new Australian Standards AS4000:2025 General Conditions of Contract is here, replacing it’s 28-year-old predecessor, AS:4000-1997.
The AS4000 Contract is the foundational document used for construction contracts in Australia.
The new version of the contract is clearer and has been updated to reflect current legislation, industry practice and drafting practices. In this article, Senior Associate, Michaela Jenkin, highlights some of the key changes.
What has changed?
- Legal Updates
Since it has been 28 years since the AS4000 was last updated, the AS4000:2025 now includes the following clauses to reflect legislative changes since 1997.
- GST – there is now a clause included to address GST liability and allow for the creation of recipient created tax invoices.
- Insolvency – the existing clause has been updated to ensure compliance with the changes to the relevant insolvency laws over the last 28 years.
- PPSA – the PPSA was established in 2009. Accordingly, AS4000:2025 now includes a clause to deal with the registration of security interests.
- WHS – the AS4000:2025 is now updated to allow the contractor to be appointed “Principal Contractor” under WH&S laws. This aligns with the WH&S law changes since 1997.
- The following changes to the AS4000:2025 have been made to reflect industry practice and to address common amendments made by contracting parties to the AS4000:1997. It is envisaged that these changes will help reduce contract negotiation time as parties will no longer have to draft amendments dealing with these gaps in the AS4000 contact.
- The Formal Instrument of Agreement is now included as a part of the same document as the General Conditions of Contract. This makes the contract easier to administer.
- The language of the AS4000:2025 has been modernised to reflect the changes in legal drafting since 1997.
- Practical Completion can now occur before a certificate is issued. This change reflects case law developments and industry practice.
- Dispute Resolution now includes an option to use a Dispute Avoidance Board in addition to litigation, arbitration, mediation and expert determination. This gives the parties greater flexibility when seeking to resolve disputes.
- Security can now be retained post-termination where there is a dispute resolution process on foot. This reflects industry practice.
- Changes to bills of quantities and provisional sums are now clearly linked to variations under the contract.
- Confidentiality provisions are updated to include standard carve-outs to obligations of confidence.
- There are clearer notice obligations and assessment procedures.
- The Contract now allows for electronic communication.
Where to from here?
Even though it is the first revision in 28 years, substantively the changes are fairly limited, with the Technical Committee electing to maintain the same risk allocation as in the 1997 contract. Accordingly, at Enterprise Legal, we recommend that the AS4000 should not be used in its unamended form, but rather, adapted through the use of specially-tailored special conditions for your project. At EL, we have developed our own ‘enhanced’ Special Conditions to accompany AS4000, customised for both principals and contractors. We have developed these Special Conditions based on our team’s extensive experience working in both front-end construction and project development, as well as construction disputes.
Users of the Australian Standard contracts should also be aware that the new AS4000 supersedes the AS2124-1992 General Conditions of Contract, which was often used as an alternative to AS4000 for construct only projects. This means that AS2124 should no be used as it is no longer considered the most up-to-date or relevant. Additionally, Standards Australia has proposed to revise further documents in the AS4000 suite (being the AS4902-2000 General Conditions of Design and Construct and the AS4901-1998 Subcontract). Follow our socials for further updates or book an appointment with Michaela to discuss how our team can assist with your next project.
