Commercial Negotiations
Negotiate the Terms That Actually Matter
Negotiation of construction and consultancy agreements across Australia, focused on risk allocation and a workable deal
A good negotiation is not about winning every clause. It is about putting each risk where it can be managed, and settling the terms that decide how the deal performs.
Christopher Larcos advises on the negotiation of building and consultancy agreements. As a solicitor who is also a registered architect, he knows how a contract plays out once the work starts, so the terms he pushes on are the ones that will matter on site, not just on paper.
The result is a contract both sides can live with, reached without stalling the project or souring the relationship it depends on.
The same work applies once a project is running. A payment, variation, delay or defects claim can often be settled by negotiation while the job continues, and that is usually the quickest and least damaging route. It works best when the contractual and statutory positions are established first, so the negotiation proceeds from a known position and no deadline is lost while talks are on foot.
What negotiation advice covers
Building contract negotiations
Negotiating ABIC, Australian Standard and bespoke building contracts, and the special conditions that carry the deal.
Consultancy agreements
Negotiating consultant appointments and Client Architect Agreements, from the fee and scope to liability and copyright.
Risk allocation
Placing each risk where it can be managed and insured, rather than simply pushing it across the table.
Deal-focused advice
Practical advice on the terms that matter, so a negotiation reaches a workable contract without stalling the project.
Negotiating a claim in progress
Settling a payment, variation, delay or defects claim by negotiation while the project is still running, with the contractual and statutory positions worked out first.
How Does a Construction Contract Negotiation Run?
A negotiation needs a clear sequence, so commercial priorities are translated into agreed wording without losing track of connected terms. If the first task is to understand the contract as a whole, start with a contract review.
Set the commercial brief
Confirm the project, the proposed contract and each party’s priorities. Separate genuine deal-breakers from terms that can move if the overall allocation remains workable.
Build the issue map
Map the payment, scope, programme, risk and liability issues, then identify which positions depend on one another. This helps reduce the risk that a concession in one clause undoes protection elsewhere.
Prepare the markup or counter-draft
Put the proposed position into the contract language, with changes that can be compared and answered. The markup records the deal being offered rather than leaving it in correspondence.
Set negotiating positions
For each material issue, define the preferred position, the acceptable landing point and the reason for it. That keeps the negotiation directed to project risk rather than clause-by-clause point scoring.
Resolve connected terms
Work through dependencies together: scope with price, extensions of time with delay exposure, and indemnities with insurance. A term is not settled if a connected clause still contradicts it.
Settle an execution-ready version
Consolidate agreed changes, close out drafting notes and confirm the schedules and incorporated documents. The result should be one clean version ready for the parties’ execution process.
Where the engagement requires fresh drafting rather than negotiating an exchanged document, see contract review and drafting. Project-specific amendments to a standard form may instead be dealt with through building contract special conditions.
Which Terms Decide the Deal?
The priority depends on the project, but most construction negotiations turn on three connected groups of terms rather than isolated clauses.
Payment, scope and change
Price only makes sense against a defined scope and a workable process for variations. The negotiation should align claim timing, valuation, approval and records so changes do not become unfunded work or unexpected cost.
Time, delay and termination
Programme obligations, extensions of time, delay exposure and termination rights need to operate together. Notice requirements and time bars should be proportionate to the project and capable of being administered in practice.
Liability, insurance and IP
Indemnities, liability limits, insurance obligations and intellectual property rights should reflect the risk each party can control, the cover actually available and how designs or project material will be used.
Common questions
What do you help negotiate?
Christopher advises on the negotiation of construction and consultancy agreements: building contracts and their special conditions, consultant appointments, and the risk, payment and liability terms within them. The focus is on the handful of terms that decide how a deal actually performs, rather than arguing every clause.
When should I get advice on a negotiation?
As early as possible, while the terms are still open. Once positions are set or a contract is signed, the room to move is gone. Advice at the point where terms are being exchanged is where it changes the outcome, and it is far cheaper than dealing with the consequences of a term you accepted without advice.
Do you negotiate consultancy agreements as well as building contracts?
Yes. As a registered architect, Christopher understands consultant appointments from the inside, and he negotiates them alongside building contracts. That includes Client Architect Agreements and the developer-side appointments consultants are asked to sign, where the negotiable terms are often the ones that matter most to the practice.
How do you approach risk in a negotiation?
By focusing on who can actually manage each risk, and pricing the rest. A good negotiation does not simply push risk onto the other side; it puts each risk where it can be controlled and insured, which produces a contract that holds up when the project is tested. Special conditions are often the tool that gives effect to what is agreed.
Can a claim be settled by negotiation once the project is already running?
Often it can, and it is usually the quickest and least damaging route. A payment, variation, delay or defects claim can be negotiated to a commercial settlement while work continues, which preserves a working relationship that formal proceedings tend to end. What makes it work is doing the analysis first: establishing what the contract and the applicable security of payment legislation actually give each side, so the negotiation happens from a known position rather than a guessed one. Statutory rights are not given up by negotiating, but their deadlines keep running, so they need to be protected while talks are on foot.
Keep reading
Contract Review
Understand a contract in full before you negotiate or sign it.
Have a contract reviewed before signingAustralian Standard Contracts
The standard forms most negotiations start from: AS 4000, AS 2124 and the rest.
Australian Standard contract adviceClient Architect Agreements
Negotiating the agreements architects use with their own clients.
Client Architect Agreement adviceCredentials
- Dual-qualified solicitor and registered architect
- 40+ years in the construction industry
- Adjudicator across five Australian jurisdictions
- Fellow of the Australian Institute of Architects (FRAIA)
- Former NSW & Queensland Editor, Building & Construction Law Journal