A contractor’s guide to construction contract reviews

By

Josh Krissansen

Last Updated Aug 20, 2026

By

Josh Krissansen

A construction contract review is the examination of the rights, obligations, and risk allocation in a construction contract. 

On a commercial project, an unreviewed variation clause, payment term, or time bar costs the contractor margin the moment an event tests it, and that cost lands during delivery rather than at signing.

This article covers when to review a contract, who runs the review, what to escalate to a lawyer, and the clauses that carry the most risk under Australian standard forms, so you can hold the positions that protect your margin.

What a construction contract review is

A construction contract review is the process of reading through each clause in a project to determine what your rights and obligations are, and how risk is allocated. 

Two reviews run in parallel.

A lawyer runs the legal review, while a contracts administrator or commercial manager runs the commercial and operational review. That in-house review is what this article covers, as it decides what the delivery team resolves on its own and what gets escalated.

Security of Payment obligations apply over the top of the contract regardless of its wording, so a good review reads the contract against the applicable state or territory Act.

Contract reviews don’t just happen before the project starts (though this is the most common and formal review); they’re undertaken at various points throughout the life of a project.

When to review the contract throughout the project lifecycle

Contracts should be reviewed at all points where a decision or a deadline depends on what a clause says. Five points recur on most commercial projects. Here’s what to look for at each stage:

1. Tender:

   At tender, read the contract to price risk accurately and to lodge your qualifications before you commit to anything. This is the only point where you can still reshape the terms, so anything you accept here you carry for the rest of the job.

2. Mobilisation:

   At mobilisation, read the contract to build your commercial registers and confirm the notice regime before works start on site. The notice deadlines only protect you if they are captured before the first event that triggers one.

3. Variations:

   When a variation is instructed or even foreshadowed, read the valuation and notice provisions straight away. Both the basis you will be paid on and the window to claim are set by the contract, and the window starts running from the instruction, not from when you get to it.

4. Progress claim dispute:

   When a progress claim is disputed, review the contract for payment terms and the Security of Payment timing before the response deadline passes. Miss that deadline and the amount claimed can become payable regardless of the merits.

5. Changed or latent site condition:

   When site conditions change, read the risk allocation for changed conditions before you absorb the cost. Whether that cost is claimable depends on wording you need to know before you commit resources to the work, not after.

Who performs a construction contract review?

Three roles are involved in a formal construction contract review:

1. The contracts administrator runs the first-pass commercial review.
2. The commercial manager owns the risk positions that the review produces.
3. The project manager owns the programme and delivery consequences of what the terms require.

Operational questions such as notice timing, register setup, valuation method, and administration of the payment schedule are resolved in-house.

Any legal questions should be escalated to a lawyer. Clause enforceability, unusual indemnities, novel risk transfer, and the structure of securities and guarantees all carry consequences the delivery team is not positioned to sign off on.

The line between legal and operational questions comes down to the consequence of the clause. An interpretation question that changes your legal or financial position goes to a lawyer. An administration question about how to run a clause you already understand stays with the delivery team.

What you find in a contract review should feed project controls

A contract review shouldn’t end as a document that sits in a folder. What you find only matters if it reaches the people who run the job day to day.

It's one thing for the contracts administrator to know the contract bars an EOT claim unless notice is served within a set period. It's another for the site team to know it, and to have a process for meeting that notice period when a delay actually hits.

If the finding stays with the reviewer, a delay comes, the site team manages it on the ground, and the notice window passes before anyone lodges. The entitlement was in the contract, and the review caught it, but none of that matters, because the people on site never knew the clock was running.

Getting the review to feed the work comes down to two actions. 

The first is where you keep findings. 

Record each one against the workflow it governs rather than in a standalone review summary, so notice deadlines sit in the variation and EOT registers and payment response times sit in the progress claim cycle. Filed that way, the obligation is in front of the person who has to act on it, at the point they act, instead of in a report they never open.

The second is when those findings are handed over.

Hand them to the delivery team as the job goes from tender to delivery, in writing, against the registers. The contracts administrator who ran the review holds the detail on where the risk sits, but they are often moving on to the next tender by the time the site team hits the event. 

High-risk clauses to check for in Australian standard forms

AS 4000, AS 2124, AS 4300, and AS 4902 allocate risk in ways that favour the principal in a handful of predictable places. These are the clauses where that allocation costs the contractor money if it goes unchecked.

• Variation valuation

  Check how a variation gets priced when there is no agreed rate for the work. Look at whether the superintendent can value it unilaterally, and whether the contract caps the margin you can recover.
  
  These forms often let the superintendent set a rate you never agreed to, so an instructed variation you assumed was profitable can come back valued below your cost. 

• Extension of time and time bars

  Confirm the notice period for claiming an EOT and the exact event that starts the clock.
  
  Under these forms, your entitlement is conditional on serving notice within the stated period, so a delay claim with genuine merit is forfeited entirely if the notice is late. The strength of the underlying claim makes no difference once the bar has passed, which is why the notice trigger is the first item to pin down.
  

• Liquidated damages

  Check the daily rate and confirm it reads as a genuine pre-estimate of the principal's loss rather than a penalty. Then read it against your EOT entitlement, because the right to claim time is your only protection against liquidated damages running on a delay that was never within your control.

• Superintendent's role

  Identify where the superintendent acts as the principal's agent and where the contract requires them to act independently, particularly when certifying.
  
  Certification and valuation decisions made in the wrong capacity are open to challenge, so you need to know which hat each function calls for.
  

• Scope and inclusions

  Confirm the scope described in the head contract matches the scope passed down in each subcontract, clause by clause.
  
  Where the head contract wording is broader than the subcontract it flows into, the head contractor absorbs the work neither party priced. That gap stays invisible until the event it covers happens, and by then both contracts are signed, and you carry the difference alone.
  
  Find where the head contract obliges you to more than your subcontracts oblige your subcontractors, and close it before you execute the subcontract.

A construction contract review is not a one-time check

The value of a construction contract review comes from running it whenever an event tests a clause, from tender through to the final progress claim, not just once before signing. Read the contract at those moments, get what you find to the people running the job, and the entitlements it contains become ones you can actually hold

Written by

Josh Krissansen

107 articles

Josh Krissansen is a freelance writer with two years of experience contributing to Procore's educational library. He specialises in transforming complex construction concepts into clear, actionable insights for professionals in the industry.

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