Contract mistakes builders make before they sign

Most contract disputes are set up before anyone signs. A missed disclosure, a guessed provisional sum or a scope that leaves things out can cost you money however good the build is. These are the mistakes our sources keep coming back to, with the state named wherever the rule is state law.

1. Skipping a disclosure your state requires

In Queensland, the QBCC Consumer Building Guide must be given to the owner before signing for work priced at $20,000 or more. In a Buderim cost-plus job from 2018, the clients never received it. QCAT accepted they could withdraw from the contract, the builder could not claim the final invoice, and he had to refund over $28,000 above the costs he could prove.¹ The work itself was not the issue.

Do this instead: find out what your state requires you to hand over before signing. In Queensland, give the guide every time, even to experienced customers, and keep evidence such as an email, a signed receipt or a hard copy.

2. Signing without foundations data

In Victoria and Queensland, the builder must obtain foundations data before entering the contract: enough to design the footings and estimate their cost. Skip it and you cannot recover extra site costs that the data would reasonably have revealed. In either state, a variation or a rise and fall clause will not recover them.² Both states also warrant that provisional sums are calculated with reasonable care using the information available about the site.

A builder broker gives this example: a $2,000 pier allowance on a 330 square metre house sitting on up to 1.5 metres of uncontrolled fill. Engineering came back at $35,000.³

Do this instead: get the soil test and site information before you sign, and price provisional sums from it. New South Wales has no equivalent statutory duty on provisional sums, but contract and consumer law exposure remain.²

3. Letting the contract say something different from the salesperson

A builder tells a customer the average build time is 20 weeks, then hands over a contract allowing 365 days plus weather. In one North Queensland contract, open-ended delay notices left a family waiting nine months for a slab.³ Mismatches like these break trust and turn into disputes later.

Do this instead: read your contract the way the customer will. Make sure build times, inclusions and any promise like “energy efficient” or “turnkey” mean the same thing in the contract as they did in the sales meeting.

4. Writing a thin scope

In New South Wales (section 18B) and Victoria (section 8), statutory warranties require the work to match the plans and specifications in the contract. Queensland has an equivalent where plans and specifications form part of the contract. You cannot contract out of these warranties. A thin scope does not reduce what you owe; it removes your evidence of what was agreed.⁴ The scope is also the baseline every variation and progress claim is measured against. Leaving an item out is not the same as excluding it, and an unclear scope is read against whoever drafted it.

Do this instead: write a full scope with stated exclusions. Saying “excludes landscaping and driveway” protects you more than leaving them unmentioned.

5. Fixing a price with no protection

James Taylor, a custom home builder in south west Victoria, did fixed price work through the COVID price rises. Prices went up, the business lost money, and he says he was ready to declare bankruptcy. He now uses prime cost items, some cost plus jobs, and a progress payment schedule with more stages and clear triggers.⁵ A quantity surveyor who works in New Zealand and Australia says the most common way builders get caught on fixed price right now is having no escalation clause, and he wants at least 50% of the build price backed by subbie quotes at the point of contract.⁶

Do this instead: back your price with real quotes and check what price movement your contract allows. Rise and fall rules differ by state. Western Australia’s Home Building Contracts Act, for example, restricts them for contracts inside its value band.⁷

6. Assuming state protections cover every contract

Western Australia’s Home Building Contracts Act only covers contracts above $7,500 and below $500,000. Above the ceiling, the statutory requirements for a written contract, written variations, deposit limits and progress payment rules do not apply. The share of WA home building contracts under $500,000 fell from 94% in 2014 to 82% in 2024.⁷ A discussion paper proposes raising the band to $10,000 to $800,000, but it is not law.

Do this instead: if you build in WA and a contract sits above the ceiling, make sure the contract itself covers variations, deposits, payment triggers, defects liability and price movement.

7. Never reviewing the contract itself

Contracts drift out of date as laws and costs change. Lenders read your stage definitions, provisional sums and delay clauses closely, and some post-COVID special conditions have not held up in court.³

Do this instead: have a solicitor who knows construction review your standard contract and special conditions for enforceability on a regular cycle, and again after any change in your state’s law.

State	Rule before signing	Number to know
QLD	Give the Consumer Building Guide	Work priced at $20,000 or more
QLD, VIC	Obtain foundations data	Extra site costs not recoverable without it
NSW, VIC, QLD	Statutory warranties attach to plans and specifications	Cannot contract out
WA	Home Building Contracts Act value band	Above $7,500 and below $500,000

Read the contract the way a tribunal would. If a term is missing or vague, assume it will be read against you.

This is general information, not legal advice. Building contract law is set by each state and territory and differs between them. Check with your state’s building regulator and a construction lawyer before you rely on any of it.

Where to next

Once the contract is signed, getting paid depends on the claims process. Read Security of payment explained. For the scope issues that show up during the build, see Variation mistakes that cost you margin.

Footnotes

1. “Why the QBCC Consumer Building Guide Really Matters”, The Good Builder, 2025. https://thegoodbuilder.com.au/why-the-qbcc-consumer-building-guide-really-matters/ ↩

2. “The Soil Test Is a Legal Duty Before You Sign in Victoria and Queensland. New Research Shows What It Is Worth.”, The Good Builder, 2026. https://thegoodbuilder.com.au/the-soil-test-is-a-legal-duty-before-you-sign-in-victoria-and-queensland-new-research-shows-what-it-is-worth/ ↩ ↩²

3. “What Your Building Contract Is Telling Clients Before You Even Meet Them”, The Good Builder, 2026. https://thegoodbuilder.com.au/what-your-building-contract-is-telling-clients-before-you-even-meet-them/ ↩ ↩² ↩³

4. “The Scope of Works Is the Document Your Statutory Warranty Attaches To. Most Builders Treat It as Paperwork.”, The Good Builder, 2026. https://thegoodbuilder.com.au/the-scope-of-works-is-the-document-your-statutory-warranty-attaches-to-most-builders-treat-it-as-paperwork/ ↩

5. James Taylor, “Stop Signing Fixed Price Contracts Before You Beg Family For LOANS”, The Professional Builder (podcast), 2026. https://www.youtube.com/watch?v=R7sUdTHW05w ↩

6. Nick Clements, “If You Quote Jobs Like THIS You Will Run Out Of Cash”, The Professional Builder (podcast), 2026. https://www.youtube.com/watch?v=_o7LWHrTn00 ↩

7. “Western Australia Is the Only State That Caps Which Home Building Contracts Its Laws Cover. Nearly One in Five Now Falls Outside.”, The Good Builder, 2026. https://thegoodbuilder.com.au/western-australia-is-the-only-state-that-caps-which-home-building-contracts-its-laws-cover-nearly-one-in-five-now-falls-outside/ ↩ ↩²