Analyzing Construction Contracts for CPCCBC4003A Project

This assignment, part of the CPCCBC4003A unit, focuses on selecting and preparing construction contracts. The student, in the role of an administration manager for Metharom Construction, analyzes two contracts, identifying legal and construction-specific terms, liabilities, and actions that constitute a breach of contract. The analysis includes defining terms like 'completion period,' 'GST,' and 'provisional sum,' as well as construction-specific terms like 'base stage' and 'practical completion stage.' The student explains Metharom's liabilities, such as completing projects on time and assuming responsibility for site injuries. Actions by the client that could breach the contract are also outlined, such as refusing payment or denying access to the site. The student then recommends the most suitable contract based on their analysis. The assessment also involves meeting with a potential client (assessor) to discuss legal aspects and assess the student's understanding of contract requirements and building legislation. This project aims to enhance the student's skills in contract analysis, legal understanding, and client communication within the context of building and construction.

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