The Problems With Handshake Contracts In The Construction Industry

By 25th July 2018News

The ABC is this week reporting on the problems of handshake contracts, late payments and non-payments in the construction industry.

Construction lawyer Kylie Howell was interviewed on ABC radio Brisbane last week, saying people in the industry needed to think twice about sealing a deal with a handshake:

“Part of the problem is that people think there’s a level of trust in the industry and things are often done with a simple handshake. Unfortunately for the head contractor entering into that arrangement and the subcontractor agreeing to do the work … you are breaking the law [in Queensland] with a handshake contract.”

A number of Tradies called into the station to detail their experiences:

 

“Two or three months can roll by and the invoice isn’t paid and it’s the same story all the time. Some people don’t want to pay as they think that because you’re a tradesman they can get away with it.”

— Adrian, west of Brisbane

“As a tradie you are at the bottom of the rung, many of my mates have gone down for $10,000 and there’s nothing they can do as they’re unsecured creditors.”

— Shannon from Jimboomba

“I would hate to think about the amount of money I would be owed. You could lose $100,000 easily without even blinking.”

— Peter from Brisbane

Although contracts are encouraged, there can be instances when one party still refuses or fails to pay. Subtractors sometimes felt like they couldn’t apply pressure to be paid in fear they wouldn’t receive further work.

Original article:

https://www.abc.net.au/news/2018-07-25/how-to-be-paid-as-subcontractor-pitfalls-of-handshake-contracts/10029206