Select and Prepare a Construction Contract - Assessment Resource Summary

This assessment resource summary provides information about the assessment type, unit details, assessment tasks, and student instructions for the unit CPCCBC4003A - Select and prepare a construction contract. It also includes a summary of the content, subject, course code, course name, and college/university.

Assessment Resource Summary
Unit Details CPCCBC4003A Select and prepare a construction
contract
Assessment Type
This is a summative assessment, which requires each
student to have adequate practice prior to undertaking this
assessment
This assessment has been contextualised for Building and
Construction, and must be undertaken in a real or
simulated Building and Construction environment
Assessment
Projects
Assessment 1 - 4
Written assessment
Assessment 5
(Written Assessment attached)
Last Modification Date September 2020 Verified By: Training Manager
Proposed Review Date September 2021 Approved by: CEO
Version no. OPIE-ACBC-V-082020

Unit Summary
This unit of competency specifies the outcomes required to select and prepare appropriate constructio
contracts, including the sections, clauses and conditions for low rise construction projects. The ability t
interpret complex documents, communicate clearly and succinctly and negotiate is essential skills.
This unit of competency supports the needs of builders, project managers, estimators and managers in th
building and construction industry responsible for selecting and preparing contracts for building work.

ASSESSMENT SUMMARY / COVERSHEET
This form is to be completed by the assessor and used a final record of student competency.
All student submissions including any associated checklists (outlined below) are to be attached to this cover sheet before
placing on the students file.
Student results are not to be entered onto the Student Database unless all relevant paperwork is completed and attached to
this form.
Student Name:
Student ID No:
Final Completion Date:
Course Title: CPC40110 Cert IV Building & Construction
Unit Code: CPCCBC4003A
Unit Title: Select and prepare a construction contract
Please attach the following documentation to this form: Result
S = Satisfactory
NS = Not Satisfactory
Assessment 1  Contract analysis attached S | NS
Assessment 2  Observation checklist attached S | NS
Assessment 3  Completed contract attached S | NS
Assessment 4  Observation checklist attached S | NS
Assessment 5  Written assessment attached S | NS
Final Assessment Result for this unit C / NYC
Student Feedback:
Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I also am aware of my appeal rights.
Name: ________________________________
Signature: ____________________________
Date: ____/_____/_____
Assessor Declaration: I declare that I have conducted
a fair, valid, reliable and flexible assessment with this
student, and I have provided appropriate feedback
Name: ________________________________
Signature: ___________________________
Date: ____/_____/_____
Entered into Student Management Database Date: Initials:
Administrative use only

Student Instructions
CPCCBC4003A – Select and prepare a construction contract
Metharom Construction (MC) plans to become a leading provider of housing construction and
renovation services in the South-East Melbourne area. The company's overall strategy will be
based on a continuing improvement process of setting objectives, measuring results, and
providing feedback to facilitate further growth and progress. They have been involved in large
scale construction for 3 years and are now branching out to residential housing.
You will be taking on the role of the administration manager, and your responsibilities
include: preparation of budget reports, analyse and evaluate expenses, improve current
policies and procedures regarding financing, create reports regarding financial issues and
policies, be accountable for and manage staff.
For more information regarding Metharom Construction, please see the appendices and
company policy documentation.
Assessment 1: Analyse two contracts and make observations in the form of a
written report. (Maximum of 750 words)
Metharom is beginning work on a project described in appendix A. The Accounts team are
trying to decide between two different contracts, and have come to you for guidance. Parts
of the two contracts are enclosed in appendix B.
You will need to read through and complete the following tasks for each contract:
a) Identify a minimum of 3 legal terms and explain their meaning in your own words
b) Define the meaning of a minimum of 3 words that are specific to building and
construction contracts
c) Explain Metharom’s liability
d) Identify what action by the client would breach the contract
Once you have analysed the contracts, choose which one is best suited to the situation.
Justify your answer.
(Maximum of 750 words)
Answer
a)
 Completion period is a term which is used to specify the time period which is required
to complete construction project in a proper and appropriate manner.
 GST: GST is a kind of tax which is imposed with the help of GST legislation which is a
taxation system act. This act is applicable to a supply of goods, services and
transactions related to real property, obligations or rights
 Provisional sum is a kind of an allowance which is majorly estimated by cost
consultant. In construction is a kind of fixed price construction contract that cannot be
priced by the contractor especially at the time of entering into the contract.
b)
 Base stage is one of those terms which is specific to building and construction
contract. This is a stage in which base walls, footing, base brickwork, stumps, piers,
columns, formwork and reinforcing for a suspended slab, concrete slab, bearers, joists
or flooring (as per the requirement of the construction) are ready for wall erection.

 Practical completion stage is another term which is used specifically for building and
construction contract. This helps in identifying stages of work in which practical
completion of building or completion work will be attained in accordance with the
contract.
 Building log book is another term specifically used for building contract that states
building regulations which is issued by building owner about different kinds of services
to help and operate building properly.
c) Contractual liability means that one party is ready to pay for any kind of loss or damage
which is caused by another party. One of the main liabilities of Metharom is to complete
the construction project on time without any damage. If anyone at the construction site of
Albif House gets injured then they have to agree to assume liability of the person injured
and other kind of damage to the property. They will be liable to pay for both body injury
and property injury and pay for the damage as per the contract or agreement. Metharom
also has a liability that owner of Albif house should be harmless from any kind of loss or
damage to the property during construction time period. Metharom is also liable for
making any kind of required changes or resolve any kind of issue faced by them in terms
of construction during cooling off time period.
d) Actions by the client that would breach the contract are:
 When client refuses to pay for progress claim that has been specified under contract.
 When client fails to provide evidence of capacity to pay the amount that has been
specified within the contract.
 When client does not give Metharom uninterrupted access to or control of the land.
 When client takes final possession of the work before paying the final claim without
written consent of Metharom is one f the main point that would create breach of
contract.
 It is important for the client to pay payable amount which is due to be paid. If that
amount is not paid then it can also result in breach of contract.
Note:
The work you submit must be your own S tudents have the responsibility to maintain the highest ethical
standards of academic integrity in their work. Academic misconduct by students in examinations or in
other forms of assessment is un a cc eptable .
Prior to submitting an assessment, each student will be required to complete an a ssessment cover
sheet which will ask them to sign a declaration to say they have not plagiarised and t hat they have
read and understood the OPIE Plagiarism polic y.
All work submitted will be checked to ensure authenticity. Students found to have plagiarised will be
forced to re-submit the assessment and be required to pay the re-submission fee of $350 per unit of
competency and may be subject to disciplinary action.

Assessor’s Marking Guide: Assessment 1
Student Name:
Student ID No:
Final Completion
Date:
Unit Code& Title: CPCCBC4003A Select and prepare a construction contract
Identify and analyse the essential elements, sections and clauses of a business contract
Assessment Task 1 Performance Criteria
You will need to read through and complete the
following tasks for each contract:
a) Identify a minimum of 3 legal terms and
explain their meaning in your own words
b) Define the meaning of a minimum of 3
words that are specific to building and
construction contracts
c) Explain Metharom’s liability
d) Identify what action by the client could
void the contract.
Once you have analysed the contracts, choose
which one is best suited to the situation. Justify
your answer.
(Maximum of 750 words)
1.1. Various types of building and construction
contracts are identified and the appropriate
application of each type is analysed.
1.2. Essential terms and elements of a valid
contract are identified and analysed.
1.4. Rights and liabilities of parties under a
contract are identified and analysed
1.5. Common building contract terms and
procedures are identified and applied.
1.6. Circumstances that bring about a breach of
contract are identified and analysed.
2.1. A contract, appropriate for the type of
construction, is accurately selected.
1 In analysing the two
contracts, did the
student:
Date:
___________________
Comments
a) Identify a minimum of
three legal terms from
each contract and
explain their meaning
(6 terms total)
Student correctly identified three legal
terms: Yes No
Student correctly explained their
meaning: Yes No
b) Define the meaning of
a minimum of three
terms that are specific
to building and
construction, from both
contracts (6 terms
total)
Student correctly identified three
building and construction terms: Yes No
Student correctly explained their
meaning: Yes No

c) Explain Metharom’s
liability under both
contracts
Did the student explain Metharom’s
liability satisfactorily under each
contract: Yes No
d) Identify what action by
the client would
breach the contract
Did the student explain what action
taken by the client would breach
contract, satisfactorily for each
contract: Yes
Please specify:
_______________________
_______________________
_______________________
_______________________
_______________________
_______________________ No
Result: Satisfactory | Not Satisfactory | Not Assessed
Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I also am aware of my appeal rights.
Name: _______________________________
Signature: ____________________________
Date: ____/_____/_____
Assessor: I declare that I have conducted a fair, valid,
reliable and flexible assessment with this student, and I
have provided appropriate feedback
Name: _______________________________
Signature: ____________________________
Date: ____/_____/_____
Administrative use only
Entered onto Student Management
Database ________________
Date Initials

ASSESSMENT 2 – STUDENT INFORMATION
This information is to be handed to each student to outline the assessment requirements
Assessment 2: Meet with the potential client.
You are to meet with the potential client (to be played by your assessor) for the project
discussed in assessment 1. They want to discuss the legal aspects of the build, and
decide whether to hire you or go elsewhere.
Your assessor will be looking for:
A. Knowledge of the requirements of accepting a contract
B. Understanding of whether the client is able to agree to the contract
C. Ability to legally justify the clients ability to agree
D. Familiarity with contract and building legislation

Assessor’s Marking Guide: Assessment 2
Student Name:
Student ID No:
Final Completion
Date:
Unit Code& Title: CPCCBC4003A Select and prepare a construction contract
Select an appropriate contract for the works to be undertaken
Assessment Task 2 Performance Criteria
You are to meet with the potential client (to be
played by your assessor) for the project discussed
in assessment 1. They want to discuss the legal
aspects of the build, and make a final decision
regarding whether to hire you.
Your assessor will be looking for:
 Knowledge of the requirements of
accepting a contract
 Understanding of whether the client is able
to agree to the contract
 Ability to legally justify the clients ability to
agree
 Familiarity with contract and building
legislation
1.3. Importance of identifying an intention to
create legal relations is analysed.
1.7. Legislative requirements are identified
and applied.
2.3. Requirements associated with an offer
and acceptance of a contract are accurately
identified and applied.
2.4. Capacity of the parties to form a binding
agreement in the form of a contract is
confirmed.
2.5. Factors associated with the parties'
consent to a contract are identified and
applied.
1.3)
it is extremely important to identify whether the client has intention of creating a legal
relationship by checking whether client intend to create an agreement to be subject to
contract law. It helps the person offering the agreement to understand whether in future
any kind of legal obligation can occur that may result in breach of contract or not. Until and
unless intention of party is to constitute an agreement which is enforceable to the law it is
not a valid contract.
1.7)
it is important to identify legislative requirements and apply them for a valid contract. It
helps in maintaining privacy and security of the contract. That can be accepted and is
valid.
2.3)
There are various requirements that are required to be known before accepting a contract
such as:
 Acceptance of offer is required to be communicated by both the parties. Offer cannot
be accepted silently.
 Offer given to the client is required to be accepted without any kind of modifications
otherwise it cannot be an offer acceptance it is termed as counter offer.
 Once offer has been accepted by client, they cannot revoke it
Acceptance of contract should be clear because if the person making an offer think that
offer has been accepted then it is an acceptance, even if the person did not accept it.
2.4)
there are various factors that helps in understanding whether to form a binding agreement in the

form of a contract:
 By checking whether client is bankrupt or not because if the client is bankrupt then
they are not able to agree to the contract.
 By checking whether the land belongs to the client or not because if the land belongs
to the client, they have the capacity of to form a binding contract.
 If client is under legal age of 18 years or are not mentally stable then also, they do not
have capacity of binding within a contract.
2.5
parties consent to a contract is identified and valid under following factors:
 Parties consent is valid if it is not made due to any kind of mistake because if there is
any kind of mistake then there is no consent.
 There is no misinterpretation or fraud as both of them can directly affect legal consent
of the party.

2 In meeting with the
potential client, did the
student:
Date:
___________________
Comments
a Communicate clearly with
the client
Did the student communicate clearly
with the client: Yes No
The student demonstrated this by: Sharing information Actively listening (looking at
the person speaking,
nodding head, not
interrupting, etc.) Using questioning to
identify/confirm
requirements Understanding the topic Understanding the client’s
point of view Providing additional means
of communication Responding to concerns in
detail, using specific
references Other
Please specify:
______________________
______________________

b Have knowledge of legal
capacity
Did the student have knowledge of
what is needed to accept a contract: Yes No
The student showed knowledge of: Inability to agree to a
contract if bankrupt Inability to agree to a
contract if under 18 Having undue influence over
the other contractual party Lack of mental capacity Other
Please specify:
_____________________
_____________________
c Determine whether the
client is able to agree to
the contract and justify
their answer
Did the student determine whether
the client was able to agree to the
contract: Yes No
The student determined that:
____________________________
____________________________
____________________________
____________________________
d Show knowledge of
legislation
The student demonstrated
knowledge of legislation to a
satisfactory level: Yes No
The student demonstrated this by:
____________________________
____________________________
____________________________
____________________________

e Write business letter to
CEO
Student submitted business letter to
CEO clarifying their decision to
allow contract to be signed: Yes No
Copy of letter attached Yes No

Result: Satisfactory | Not Satisfactory | Not Assessed
Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I also am aware of my appeal rights.
Name: _______________________________
Signature: ____________________________
Date: ____/_____/_____
Assessor: I declare that I have conducted a fair, valid,
reliable and flexible assessment with this student, and I
have provided appropriate feedback
Name: _______________________________
Signature: ____________________________
Date: ____/_____/_____
Administrative use only
Entered onto Student Management
Database ________________
Date Initials

ASSESSMENT 3 – STUDENT INFORMATION
This information is to be handed to each student to outline the assessment requirements
Assessment 3: Complete a construction contract. (Maximum of 1000 words)
In consultation with the documents provided in the appendices, complete the contract by:
a) Writing a contract termination process
b) Calculating rise and fall amounts (using the formula from the appendices) and
applying it to the project cost to produce a final cost
c) Creating a payment schedule that includes approximate dates of payment
d) Implementing a process for the builder to apply for an extension of time.
e) Listing the site accommodation, and services required for the building work
Along with the documents from the appendices that you believe make up part of the
contract.
Contract Termination process
To terminate contract refers to ending project contract prior to being fully
performed by parties. Prior to parties performing all their respective obligations which are
required under contract, the duty of performing these obligations cease to exist. Effect of
termination is of discharging the contracting parties from the underperformed obligations
in a contract. Liabilities of the parties are not affected for breach of contract due to
termination that occurred prior to the termination. Despite of fact that future obligations for
performing under the contractual terms are extinguished, parties may pursue the claims
for damages under common law and provided in the termination provisions contained
within a project.
Process for termination
There are various methods of termination of contract. The mostly commonly used
process for termination is by negotiating the termination process with the parties involved
in the contractual; agreement.
At the first provisions related to the termination of contract in the agreement and
contract sop made between the parties has to be considered. The termination should go
by that method and for the reasons cited.
Considering the provisions of terminations negotiating with the parties about the
reasons of termination and what the consequences it will bring to both parties. Parties
may also identify legal ground for terminating the contract or under common law.
The termination should be caused correctly by providing proper notice of the
reasons for termination. After receiving the response from other party it is obligatory to
provide proper response on notice.
Contract could be terminated by negotiation between parties agreeing at end date
for termination of the contract or by termination by the contract who has not received the
services in the manner required.
Calculation of rise and fall amount and application to the project cost for producing
final cost
Rise and fall are seen in the estimated cost of the contract due to variations in
prices of materials and cost of labour which can cause the estimated contract price to
deviate and for which provisions for the rise and fall is made by the contractor.
Rise and fall
Building = 30% of cost

Materials = 45% of building cost
Overheads = 12%
Profit = 13%
Existing Variable cost
Estimate price 100000
-Profit 13000
-Overheads 12000
=Variable cost 75000
Rise and fall 12.50%
Estimated price due to rise and fall
Rise (12.5%) fall (12.5%)
Estimated Price 100000 112500 87500
Labour 30000 33750 26250
Materials 45000 50625 39375
Overheads' 12000 13500 10500
Profits 13000 14625 11375
Rise and fall in contract labour cost
Variable labour cost 30000
add: Rise 3750
Contract labour cost 33750
Variable labour cost 30000
less : fall -3750
Contract labour cost 26250
Rise and fall in materials cost
Variable materials cost 45000
add: Rise 5625
Contract material cost 50625

Variable material cost 45000
less : fall -5625
Contract material cost 39375
Payment Schedule including date of payment.
The payment schedule provides the date and basis on which payment will be
received from the client. Construction company will receive the payment on the basis of
percentage of completion of construction deducting the amount which has been already
received from client. The date of provides the estimated date on which the given
percentage of work is supposed to complete. Payment schedule for project is given below
stating the amount and date of payment.
Payment Schedule
Starting Date 15/9/2020
Estimated Price 100000
Amount Date
Based on completion %
On 20% completion 20000 2/11/2020
On 50% completion 30000 10/1/2021
On 75% completion 25000 2/3/2021
On 90% completion 15000
15/04/202
1
On 100% completion 10000 1/6/2021
Implementation of process for builder to apply extension of the time.
Extension of time refers to postponement of Finish date. Construction contracts
provides generally for the extension of time when the delay is not due to fault of
contractor. When it becomes apparent that there is likely to be delay that requires
extension of time.
Process of applying extension time
Contractor has to give written notice to contract administrator identifying relevant
events that has caused delay requesting extension of the time by presenting reasons and
referencing relevant clause allowing the request.
The request for extension of time should consist clear issues causing delays,
activities from project affected by the delay, exact time requested specifying the working
days, estimates illustrating delay issues, recommendations top contract administrator and
alternative actions for preventing further delays
Letter for EOT is assessed by contract administrator before the approval or
rejection. If the letter for request of extension is approved the change order is issued. The
project will be considering the time extended by the administrator for completing the
project and ensures that work is completed in the given time period.
Listing site accommodation and the services required for building work
Construction site for the accommodation must have facilities for carrying out
various activities for the business. It is essential that the site accommodation offices

attractive, comfortable and versatile and also secure and robust. The site accommodation
are generally temporary in the nature which will there for only the construction works,
which will be prefabricated, construction from the modular or portable buildings.
List of the site accommodation
 Accommodation for the site managers and the workers staying at night
 Meeting space in the building
 Storage place for the site documentation
 Site office
 Workers room
 Rest Room
Services required for the building work.
The building services are required for completing the building work.
There are various services required in the building such as
Mechanical services
 Energy supply such as electricity, gas and the renewable resources
 Lifts and Escalators
Electrical services
 Voltage systems, distribution boards
 Communication and telephone lines
 Lightning protection
 Building automation
 Fire protection and detection
Public health services
 Drainage of the waste water systems
 Plumbing solution for the supply of water
Maximum of 1000 words.

Assessor’s Marking Guide: Assessment 3
Student Name:
Student ID No:
Final Completion
Date:
Unit Code& Title: CPCCBC4003A Select and prepare a construction contract
Prepare the contract
Assessment Task 3 Performance Criteria
In consultation with the documents provided in the
appendices, complete the contract by:
f) Writing a contract termination process
g) Calculating rise and fall amounts (using the
formula from the appendices) and applying it
to the project cost to produce a final cost
h) Creating a payment schedule that includes
approximate dates of payment
i) Implementing a process for the builder to
apply for an extension of time.
j) Listing the site accommodation, and services
required for the building work
Along with the documents from the appendices that
you believe make up part of the contract.
Maximum of 1000 words.
2.2. Range of documents that collectively
make up a contract is accurately identified
and prepared.
3.2. Factors leading to the termination of a
contract are defined, analysed and
assessed during the preparation of the
contract.
3.3. Contract rise and fall amounts are
accurately calculated during the
preparation of the contract.
3.4. Schedule of progress payments is
assessed and included in the preparation
of the contract.
3.5. Processes for applying for extensions
of time are included in the preparation of
the contract.
3 In completing the
contract, did the
student:
Date:
___________________
Comments
a) Write a contract
termination process Student wrote contract
termination process which

included details for
termination by owner Student wrote contract
termination process which
included details for
termination by builder
b) Calculate the rise and
fall amounts, and apply it
to create a final price Student correctly calculated
the rise and fall amount Student correctly applied rise
and fall amount to final price
c) Did the student create a
payment schedule Student provided payment
schedule which included
dates of payment
d) Create a procedure for
the builder to apply for
an extension of time
The student created a satisfactory
procedure for the builder to apply for
an extension of time: Yes No
e) List the site
accommodation and
services required on-site
Did the student list the required site
accommodation and services: Yes No
These included: Site office Meal room Lockers Toilets Electricity Gas Water Phone First aid facilities Other
Please specify:
________________________
________________________
Result: Satisfactory | Not Satisfactory | Not Assessed

Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I also am aware of my appeal rights.
Name: _______________________________
Signature: ____________________________
Date: ____/_____/_____
Assessor: I declare that I have conducted a fair, valid,
reliable and flexible assessment with this student, and I
have provided appropriate feedback
Name: _______________________________
Signature: ____________________________
Date: ____/_____/_____
Administrative use only
Entered onto Student Management
Database ________________
Date Initials
Assessment 4: Role-play a contract approval meeting.
Meet with a legal consultant (your assessor) to ensure that legislative requirements have
been met by the contract. You need to discuss your contract with the consultant and look for
feedback.
Your assessor will be looking for:
 Application of the Domestic Building Contracts Act 1995
 Workplace appropriate language
 Understanding of the builder’s obligation under the contract
ASSESSMENT 4 – STUDENT INFORMATION
This information is to be handed to each student to outline the assessment requirements

Assessor’s Marking Guide: Assessment 4
Student Name:
Student ID No:
Final Completion
Date:
Unit Code& Title: CPCCBC4003A Select and prepare a construction contract
Assessment Task 4 Performance Criteria
Meet with a legal consultant (your assessor) to ensure
that legislative requirements have been met by the
contract. You need to discuss your contract with the
consultant, and look for feedback on how to improve.
Your assessor will be looking for:
 Application of the Domestic Building Contracts
Act 1995
 Workplace appropriate language
 Understanding of the builder’s obligation under
the contract
1.7 Legislative requirements are
identified and applied.
3.1 Expert advice is sought as
required in the preparation of the
contract.
3.6 Final contract is prepared in
consultation with relevant personnel
and in accordance with the accepted
processes of the organisation and
legal requirements.
1.7
If the contract is of more than $10,000 then Domestic Building Contracts Act 1995 is
applicable to it and as this contract is of $280,000 estimated then it directly falls under
Domestic Building Contracts Act 1995. As per the facts this act is not applicable to multi-
apartment developments or to developers. This act is only applicable to contraction of
homes.
3.1
While preparing a contract an expert advice is required for preparation of contract as
expert helps in identifying legal terms and conditions that are required to be included
within the contract. They also help in providing guidelines for development of breach or
termination of contract terms. Expert also helps in providing a proper way or manner
though which communication of contract offer and acceptance can be made. They also
provide guidance for general conditions of what is required to be done in anticipated
situation. In this situation expert will provide their expert advice about acts under which
contraction will be done.
3.6
Acceptance process of organization and legal requirement: for this obligation of business
under the contract are verified such as:
Metharom will be providing their original registration number and name under which it is
registered to the client in order to confirm that they can legal make this offer and will be
bound under all the legislative requirements.
Development of legal contract with legal requirements will help in binding Metharom under
contain terms and condition which will not allow them from making any kind of illegal term
and condition for construction project.
Metharom will also be required to include cooling period of at lest 1 year so that any kind
of issues or defects within that time period will be required to be fixed by them.
Metharom will be liable for taking responsibility of people working under them and if any
kind of incident occurs then they will be liable to take care of physical damage as well as
property damange.

4 In meeting with the legal
consultant, did the
student:
Date:
___________________
Comments
a Show knowledge and
application of the
Domestic Building
Contracts Act 1995.
Did the student show knowledge of
the Domestic Building Contracts Act
1995: Yes No
The student demonstrated
knowledge of: The prohibition of arbitration
clauses Builders being unable to
seek more than the contract
price Builder must provide a copy
of the contract to the
building owner Fixtures and fittings are
included in the contract
price Only registered builders can
enter into a domestic works
contract Contracts must contain a
warning if the price will vary Cooling off periods must be
included Other
Please specify:
_____________________
_____________________
b Use workplace
appropriate language
Did the student use appropriate
language while participating in the
meeting: Yes No

c Show understanding of
the builders obligations
under the contract
Did the student show knowledge of
the builders obligation under the
contract: Yes No
The student showed this by
explaining that: The builder must provide
warranties The builder must have a
current registration The builder must not ask
anything illegal of the client The builder is required to fix
defects Oversight of the safety of all
personnel The builder is required to
have work inspected
throughout the duration of
the building works Other:
Please specify:
____________________
____________________
Result: Satisfactory | Not Satisfactory | Not Assessed
Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I also am aware of my appeal rights.
Name: _______________________________
Signature: ____________________________
Date: ____/_____/_____

Assessor: I declare that I have conducted a fair, valid,
reliable and flexible assessment with this student, and I
have provided appropriate feedback
Name: _______________________________
Signature: ____________________________
Date: ____/_____/_____
Administrative use only
Entered onto Student Management
Database ________________
Date Initials

ASSESSMENT 5 – WRITTEN ASSESSMENT
Student Name: ______________________________________________________________
Student ID No: ______________________________________________________________
Date: ______________________________________________________________
Please refer to the instructions below regarding completing this assessment
Written Assessment
This is a closed book written assessment. In the time allocated, you are to answer all of the following
questions. Make sure you:
 Print/Type Clearly
 Answer all questions
 Use a black or blue pen if typing. Assessments written in pencil will not be accepted.
 Ask your assessor if you do not understand a question. Whist your assessor cannot tell you the
answer, he/she may be able to re-word the question for you
 Do not talk to your classmates. If you are caught talking, you will be asked to leave and your
assessment will not be marked.
 Do not cheat or plagiarise the work of others. Anyone caught cheating will automatically be marked
Not Yet Competent for this unit. There are NO EXCEPTIONS to this rule.
Questions
1 What four elements must a contract contain in order to be legally binding?
Four elements that a contract must contain in order to be a legally binding contract are:
 An offer
 An acceptance
 An intention to create a legal relationship
 A kind of consideration.
2 Give one reason why a contract may be invalid, despite the elements listed above?

Contract might still be invalid if despite of elements listed above if :
 If it temps or attracts someone to commit a crime or is illegal
 Someone who has entered the contract or is entered by someone who is not capable enough like
is a minor or is bankrupt.
3 Explain the term ‘cooling-off period’.
Cooling off period can be defined as a time period which is required to be passed parties involved
within a contract before someone can do something or before an agreement becomes final. It is a
time period which s given to parties involved in a contract so that they can decide whether they want
to enter into the contract or not. Once a contract is signed, 14 days cooling off period is given to both
the parties so that if they want to change their mind set then they will be given time to change their
mind set.
4 What is an implied warranty?
Implied warranty can be defined as a kind of legal term for the assurances. It can be oral or written
that helps in explaining whether a product is fit for the purpose for which it has been produced and is
merchantable. It is as per the expectations of an ordinary buyer. These warranties are stated by state
law not be federal law.
5 What is a defect liability period?
Defect liability period is also known as defect notification period. It is a period when construction is
completed and accepted. It is a period where contractor is responsible for fixing any kind of issue or
defect that arises in the infrastructure. Mostly, this period is of 1 year.
6 Who are volume builders?
Volume builders mainly contract homes in communities that are developed and has a master plan
(mostly communities that are located in fringe suburbs of Melbourne) where land is quite cheap and
has plentiful supplies. They can build hundreds or thousands of homes per year. Volume builder
mostly deliver same size homes for less money
7 Explain the term ‘occupancy permit’.

occupancy permit is a kind of permit which is issued by the appropriate local governing bodies in
order to establish that property purchased by the buyer is suitable and appropriate for habitation by
meeting certain health and safety standards. This certificate is issued by local authorities in order to
certify that house or building is fit to be used and has been constructed as per the approved plan and
in compliance with major or important local laws. It is one of the most important responsibility of
developer to obtain occupancy permit or certificate once the building or house is readily constructed
by adhering relevant code, laws and regulations.
8 What is the contract law definition of a defect?
A defect is a law that exits if the safety of product is not as per the entitled expectations of a person
then. It can also be said that if a work I not done under or asper the requirements specified in
construction contract then it is termed as defect. In order to assess defect, it is important to check
construction contract requirements so that what is required to done and fulfilled by the contractor can
be checked and evaluated.
9 How does transparency in communication improve client/contractor relations?
Transparency in communication can help in bringing improvement within relationship between client
and contractor in many different ways: it helps the contractor in making their clients understand what
they can expect form them. It can help both the parties to understand their roles and responsibilities
and reduces possibilities of misunderstandings. Not only this, but if there is transparency within
communication them satisfaction level of clients is enhanced and contractor can fulfil maximum
number of requirements of clients in a proper manner which eventually helps in development of a
strong relationship between client and contractor.

10 What is a contractual relationship?
Contractual relationship is a kind of relationship that involves land contracts, deeds, or when title or
possession transferring is done. It is a kind of legal document between contracting parties with the
help of an offer, acceptance to an offer and valid considerations. This contract is a kind of oral and
written agreement which is legally enforced between two or more individuals which is legally
enforceable and contain one promise or an offer that further helps in binding a relationship between
both the parties bind within a contract.
11 Explain why ethics are relevant to a contractual relationship.
Contractual relationship is a kind of legal binding documents that are only valid if it based upon an
ethical framework so that all the parties involved within a contract can fulfill their legal obligations.
Ethics are relevant to contractual relationship as it helps in binding all the parties involved in a
contract legally.
12 When can an Australian Building Industry Contract Major Works - 2008 contract be used?
Australian Building Industry Contract Major Works – 2008 can be used for industrial and
commercial projects throughout Australia except in Queensland where some unique special
conditions are included within the contract that are required. This contract must be administered by
registered architect.

13 Compare and contrast AS4000 and AS2124 contract standards.
 Both AS4000 and AS2124 contract standards deals with EOT standards quite differently.
 Contractor is granted an EOT for compensable cause under AS 4000 whereas in AS 2124
contractor is required to pay extra cost as a reason of delay
 Under AS 4000 if contractor fails to reach practical completion by the date for practical
completion, they will automatically become indebt to principal for liquidated damages
14 What are 4 things that a home improvement contract should contain?
 Licenses and registration are required to be included in which: name and license number of
contractors, name and registration number of home improvement salesperson is required to be
included.
 Contract time in which start and end date should be included
 Contract price in which final contract price which is required to be pad should be included with
important terms and conditions.
 Termination clauses are also important to be included that helps in specifying reason on the
basis of which contractor or homeowner can leave the job without penalty
15 What are three examples of works that require a ‘major domestic building contract’?
 When there is a need of including information from commercial construction contract.
 When domestic building contract is more than $10,000. For example: a pre-construction contract
worth $4,000 and the main contract worth $7,000. In such cases contracts are not separated.
 When there are special requirements to be included within the contract because of which price of
contract increases more than $10,000.
END OF WRITTEN ASSESSMENT
Before you hand in your written assessment, make sure that you:
1. Re-check your answers and make sure you are happy with your responses
2. Have written your Name, Student ID Number, and Date on the first page
Student Declaration: I declare that the work
submitted is my own and has not been copied or plagiarised
from any person or source.
Name: ________________________
Signature: ________________________
Date: ____/_____/_____
ASSESSOR USE ONLY
Assessor: I declare that I have conducted a fair, valid, reliable
and flexible assessment with this student, and I have provided
appropriate feedback
Name: ________________________
Signature: ________________________
Date: ____/_____/_____

In the written assessment, did the student: Satisfactory: Comments:
Did the student answer all questions correctly?
(Please note which questions were answered
incorrectly, if applicable).
 Yes  No
If ‘no’ to the above, did you identify gaps in the
student’s understanding and knowledge?
 Yes  No
If ‘yes’ to the above, what arrangements have
been made for reassessment?
 Yes  No
Please add any further comments about this assessment on the Assessment Cover Sheet.