6 December 2021
This resource explains:
This resource provides general information only. You may find this resource helpful if you are a Victorian homeowner and you want to make a claim against a builder, but you do not have a written building contract.
A contract is a legally binding agreement between two or more people to do certain things. A contract can be oral, written, implied through a party’s conduct or a combination of these. This means that you may have a contract with your builder even if it is not in writing.
A party oral, partly written contract is a contract which includes both written terms and terms that were agreed orally.
For example, if you hired a builder to renovate your kitchen and they verbally promised you they will complete the renovation in six weeks, this timeframe may form part of your contract even if it is not a term in your written renovation contract. Your contract would include both oral terms (i.e. the timeframe promised by the builder) and written terms (as contained within your written renovation contract).
A contract is made up of four essential elements:
First, there must be an offer by one party to do something.
For example, a builder could make an offer to you by sending you a quote acceptance form setting out a scope of works and price for you to sign.
Second, the offer must be accepted by the other party. Acceptance can be oral, written or by conduct.
For example, you could accept the builder’s offer by signing the quote acceptance form (written), telling the builder that you want to go ahead with the works set out in the quote (oral) or by paying the deposit (by conduct).
Third, each party must intend to enter into a legally binding agreement. Each party must intend to go through with the agreement, not just be thinking about it.
Fourth, both parties must provide consideration by agreeing to exchange something of value. In a typical building contract, the consideration provided by the builder is their materials, labour and skill to complete the works and the consideration provided by the homeowner is the money they pay for the works.
If the above elements exist, you are likely to have a contract with the builder even if you don’t have a written contract. If you are unsure whether you have a contract with the builder, you should seek legal advice.
Note that a contract may not be valid if either of the parties did not have capacity to enter the contract at the time of signing because, for example, they were underage, mentally impaired or not acting freely. Similarly, a contract is not enforceable if it is an agreement to do something that is illegal.
Where an agreement is between family members, the contract will not be enforced if it was never intended that the contract would be legally enforceable. Some things that would be considered where a contract is between family members are:
If your contract is with a family member, in addition to gathering evidence of the elements of a contract, you should gather any evidence (such as money paid, any written or signed agreements or communications) that proves you intended the agreement to be legally enforceable and binding.
If you want to pursue your builder for defective or incomplete work, you will need to first prove that you have a contract with the builder. This is easy if you have a written contract.
If you don’t have a written contract, you will need to prove that you have an oral or a partly oral and partly written contract by gathering evidence of the agreement reached between yourself and the builder.
The evidence should show that both parties agreed on the obligations and the terms of the agreement. For example, the works which the builder agreed to do, the price you agreed to pay and the deadline for completion.
Examples of evidence you can use to prove you have a contract with the builder
Once you have gathered the evidence, you should identify what each piece of evidence proves.
For example, a text message from yourself to the builder saying “Hello, I have paid the deposit of $5000 as you requested. I would appreciate if you could start work ASAP as I need the bathroom ready by end of year as we had discussed” could show:
You should aim to find evidence that you can use to prove each of the four elements of a contract listed above (i.e. offer, acceptance, intention, and consideration), as well as any evidence to prove the terms or details of your agreement that are the subject of the disagreement.
Evidence should be organised in chronological order so that it is easy to follow. You may also wish to set out the details of what the evidence shows so that, if asked, you may explain what the evidence is and how it is relevant. An example of how you could organise your evidence is shown below:
|DATE||EVIDENCE||WHAT THE EVIDENCE SHOWS|
|30 APRIL 2020||Voice mail||Builder agreed that he would finish the works by end of May|
|1 MAY 2020||Bank statement||I paid a deposit of $2000|
|9 MAY 2020||Text message from builder||Builder agreed to install dishwasher at an extra cost of $200|
You should keep copies of all correspondence with your builder and all documents that relate to the building works. You should also make a record of all important conversations you have with your builder. This will help you down the track if you decide to pursue a claim against your builder.
This resource was last updated on 6 December 2021. This is legal information only and does not constitute legal advice. You should always contact a lawyer for advice specific to your situation.