Construction contracts and conditions

The general conditions of contract approved and recommended for public construction in Victoria are specified in the Guide to Ministerial Direction No. 2 - Contractual Provisions for Public Construction.

These conditions have been developed or adopted for Victorian public construction on the recommendation of the Construction Contracts Advisory Panel, based on the principles outlined in Ministerial Direction No. 2. 

General conditions of contract for public construction must provide for:

  • allocation of risk to the party best able to manage the risk;
  • prompt and fair entitlement to payment;
  • requirement that the head contractor must provide the contract principal with proof of payment to subcontractors and suppliers;
  • co-operative approach to dispute resolution to minimise adversarial action; and
  • requirement to use standard subcontract conditions compatible with the head contract (where applicable).

Under the Victorian Building and Construction Industry Security of Payment Act 2002 contracts recommended or approved for public construction must not include:

  • 'pay when paid' or 'pay if paid' clauses in subcontracts; or
  • amendment of clauses relating to payment timing in standard subcontracts.

Forms of contract

The forms of contract specified in the Guide to Ministerial Direction No. 2 are suitable for construction contracting strategies such as:

  • major and minor construct only contracts;
  • design and construct contracts;
  • design only contracts; and
  • subcontractor engagements.

Special conditions of contract

Victorian public sector special conditions of contract for public construction projects have been developed by the Construction Contracts Advisory Panel to amend Australian Standard general conditions of contract.

Special conditions are revised from time to time to reflect changes in Victorian government policy and contracting practices. Refer to Practitioners Toolkit, which includes key documents, guidance and information relating to the Ministerial Directions and Guides, to view the current versions of the special conditions of contract.


Contact Construction Policy for more information about construction contracts, special conditions of contract and the model conditions of tender contact.

Reviewed 16/05/2018
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