Risk & Liability
What does “limitation of liability” mean and why does it matter?
It caps how much you can be sued for. Without it, exposure is unlimited. Quantum caps at 100%
What are ideal payment terms for a construction contract?
Upfront payment, 30 days or 30 days EOM depending on industry
What is an EOT and why is it important?
It protects you from LDs for client-caused delays. Quantum ensures EOT covers client and authority delays.
What’s the danger of accepting “head contract applies”?
You inherit unseen risks. Quantum ensures only relevant clauses apply and subcontract terms take precedence.
What is the main purpose of a written contract review before signing?
To identify commercial risks such as unfair liability, payment delays, and scope gaps before they cause loss.
Why should consequential loss be excluded?
Consequential loss includes indirect losses like profit loss. Quantum ensures mutual exclusion so both sides cover only direct, measurable losses.
Why is retention a cashflow risk?
Clients often hold it too long and you lose a portion of each progress claim. Quantum limits it to 5%, releases half at PC, and never accepts over 10%.
What are Liquidated Damages (LDs)?
Pre-agreed penalties for delay. Quantum caps them at 10% and makes LDs the sole remedy for delay.
Why do we avoid personal director’s guarantees?
It puts personal assets at risk
Why is it risky to start work before the subcontract is signed?
You’re exposed to all the client’s standard terms without negotiation. If problems arise, you have no defined cap on liability, no agreed payment schedule, and no formal variation rights.
Why is excluding the Proportionate Liability Act risky?
It makes you liable for others’ mistakes. Quantum never agrees to exclude it, especially in WA and NSW.
When can clients set off payments?
Quantum requires written notice and a meeting before deductions.
How do you claim delay or disruption costs?
Keep daily logs, photos, and written proof and submit your claims within the notice period. Quantum ensures payment for demonstrated actual costs.
Why are re-warranty periods dangerous?
It restarts your obligations indefinitely. Quantum caps it at 12 months, no re-warranty period.
What’s the commercial difference between “time is of the essence” and “reasonable time” clauses in a subcontract?
“Time is of the essence” makes timing a critical condition — miss it, and you’re in breach. “Reasonable time” gives flexibility if delays are minor or excusable. Quantum pushes to remove “time is of the essence” unless it’s mutual and balanced with EOT rights.
What’s the risk with one-sided indemnities?
You end up covering client mistakes. Quantum makes indemnities mutual and proportionate to fault.
How does SOPA adjudication fit into disputes?
It’s a fast track for unpaid claims. Quantum includes Senior Rep meetings before SOPA to protect relationships and cashflow.
How should variations be handled?
Submit a notice within 5 days, agree cost and time impacts. Quantum sets a 15% markup and ensures EOT plus cost recovery.
Why do urgent protection clauses need to be included?
They can force unpaid extra work. Quantum allows them only if costs are recoverable and confirmed in writing.
Why does Quantum prefer LDs (liquidated damages) as the sole remedy for delay instead of allowing general damages?
It caps the client’s recovery and stops them from claiming additional or unpredictable losses. It creates commercial certainty — you know your maximum exposure.
If the client insists on unlimited liability “for all losses,” what’s the commercial workaround Quantum teaches?
Tie liability to insurance limits or the contract value, whichever is higher. It maintains fairness while still showing accountability.
A client withholds payment citing “quality issues.” What’s Quantum’s commercial strategy?
Demand written notice and evidence, then invoke the dispute or adjudication process immediately. Never stop submitting valid claims — pressure the process, not the relationship.
Your site team forgets to issue a variation notice within 5 days. The client refuses payment. What can you do?
Provide evidence of direction, cost, and benefit to the project to justify a late claim.
What’s the hidden danger in “order of precedence” clauses?
If the head contract outranks your subcontract, their terms overrule your negotiated protections. Quantum always ensures the subcontract has precedence.
If a subcontractor had to pick one clause to negotiate first — which one delivers the greatest protection to profit and why?
Limitation of Liability. It defines your maximum financial risk under the whole contract. You can survive bad pricing or minor claims — but without a liability cap, one dispute can wipe out your business.