Why construction contracts still fail at the basics despite increasing complexity

Even the most complex construction projects are often undone by overlooked fundamentals in contract design, risk allocation and communication.

In a UNSW webinar session, Stefan Fenk, Partner at Hall and Willcox, outlined how different delivery models shape responsibility, risk and project outcomes. He compared construct only and design and construct approaches, noting that construct only contracts benefit from fully developed designs and clearer pricing, but often create disputes where principals and contractors disagree on whether defects arise from design or workmanship.

Stefan contrasted this with design and construct models, where design and construction teams are integrated, enabling faster delivery and opportunities for innovation and value engineering. However, he noted that these contracts transfer significant design responsibility to contractors, with associated risk allowances typically built into pricing.

Stefan argued that the real pressure points lie in the fine print. Notification regimes designed to support communication are increasingly used as procedural barriers to claims, while standard form contracts are routinely amended in ways that create imbalance and inefficiency. He pointed to unrealistic expectations such as defect free completion and overly complex notice requirements as examples of drafting that can stall projects and escalate disputes. With major infrastructure demand rising and contractor capacity tightening, he suggested a shift towards more collaborative contracting models may reflect not just a trend, but a necessity in a constrained market.

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