Victorian Consolidated Legislation

Domestic Building Contracts Act 1995 - SECT 41

Ending a contract if completion time or cost blows out for unforeseeable reasons

41. Ending a contract if completion time or cost blows out for unforeseeable
reasons



(1) A building owner may end a major domestic building contract if-

   (a)  either-

   (i)  the contract price rises by 15% or more after the contract was entered
        into; or

   (ii) the contract has not been completed within 11/2 times the period it
        was to have been completed by; and

   (b)  the reason for the increased time or cost was something that could not
        have been reasonably foreseen by the builder on the date the contract
        was made.

(2) For the purposes of subsection (1), any increased time or cost that arises
as a result of a prime cost item or a provisional sum or that is caused by a
variation made under section 38 is to be ignored in calculating any price rise
or increase in time.





(3) To end the contract, the building owner must give the builder a signed
notice stating that the building owner is ending the contract under this
section and giving details of why the contract is being ended.

(4) The Director may specify that the notice is to be given in a form approved
by him or her13. If the Director does this, the building owner must give the
notice in that form.

(5) If a contract is ended under this section, the builder is entitled to a
reasonable price for the work carried out under the contract to the date the
contract is ended.

(6) However, a builder may not recover under subsection (5) more than the
builder would have been entitled to recover under the contract.

(7) Section 39 does not apply to this section.