What do 1987, 1998, 2003, 2013 and 2023 all have in common? They are all years in which Standards New Zealand published a revision of NZ’s most used standard form of construction contract, NZS 3910 Conditions of contract for building and civil engineering construction.
On 28 November 2023, Standards New Zealand published the 2023 edition of NZS 3910 (2023 Standard). In the first instalment of our “Getting to know New Zealand’s new standard form construction contract” series on the 2023 Standard, we summarise and highlight what we see as the Top 10 things you need to know about the 2023 Standard, which are:
• The Purpose
• Engineer’s role split
• Target Price
• Duty of Care
• Provisional Sums
• Final Account
• Off-site Materials Agreement
• Fault-based Contractor indemnities
• Cap on Contractor’s liability
• Dispute Resolution
The stated purpose of the development of the 2023 Standard is to ensure the contract is widely accepted and fit for purpose, limits the need for special conditions, improves understanding of contracts and that risk is allocated fairly.
Overall, we agree the 2023 Standard heads in the right direction in terms of risk allocation and aligning the industry standard form with current market conditions. For example, the 2023 Standard includes greater real-time contract involvement between the parties including additional management plans, reporting, mutual early notification obligations, and prompt resolution of matters before disputes may arise.
We anticipate that some parts of the 2023 Standard will receive further focus from principals, contractors and other users, including in the areas we’ve identified in our overview.
Whether you’re a principal, contractor, consultant, or simply considering the use of these terms for your construction contract, our series on the 2023 Standard will provide insight on some of the considerations to make when utilising the new standard form contract. However, we advise obtaining legal advice applicable to your specific circumstances.
In the next instalment of our series on the 2023 Standard we will consider the roles of the Independent Certifier and the Contract Administrator, who assume the roles previously undertaken by the "Engineer to Contract". If you would like to receive this and further instalments of our series, please let us know us at [email protected].
If you would like to learn more about how our expert lawyers at MinterEllisonRuddWatts can assist you in relation to any of the above, have inquiries about our 2024 training sessions on the 2023 Standard, or would like help developing your precedent special conditions of contract for use with the 2023 Standard, please don't hesitate to get in touch with one of our key contacts or to email us at [email protected].
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