Contractor agreement, carpentry package

Independent contractor agreement

A builder engages a carpentry business for one house. The interesting clause is not the price, it is the table that writes down who controls the work, because that is what decides whether this is a contract at all.

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This agreement is made on 8 September 2026 between Bellbird Build Co Pty Ltd, ABN 29 118 660 447, builder licence 341220C, of 8 Waratah Street, Wollongong NSW 2500, called the Principal, and J. Marsh Carpentry Pty Ltd, ABN 55 630 112 984, licence 402118C, of 12 Farmborough Road, Unanderra NSW 2526, called the Contractor.

The Contractor runs its own business, carries its own insurances, quotes its own price and works for other builders. This agreement does not make anyone an employee, a partner or an agent of the Principal.
The Contractor and its workers are not entitled to annual leave, personal leave, redundancy pay, notice of termination or any other employee entitlement from the Principal, and none accrues under this agreement.
The Contractor may carry out the work through its own employees or subcontractors, provided the Principal is told in writing who will be on site, each holds the required licences, and the Contractor remains responsible for their work.
The table below records the arrangement the parties have actually agreed. It is written down because the label on a contract counts for far less than how the work is really carried out.
Wall and roof framing, roof battens, eaves and fascia, external cladding, hanging of windows and external doors, internal linings, doors, architraves, skirting and robe fitout for the two storey dwelling at 41 Beaton Avenue, Figtree NSW 2525, to the approved plans revision C.
On site from 21 September 2026, with carpentry practical completion by 18 December 2026. Wet weather and delays caused by other trades extend those dates by the days actually lost, recorded on the site diary at the time and not reconstructed later.
The Contractor and everyone it brings on site holds a current construction induction card, signs in each day, wears the required protective equipment and leaves the work area clean at the end of each day.
The contract sum is $70,000 plus GST, payable by the five stages in Schedule 1. A stage becomes payable when the work in it is complete and the Principal has inspected it, not when it is nearly complete.
The Contractor invoices on completion of each stage, quoting the stage number and the site address. The Principal pays within 14 days of a correct invoice, in line with the security of payment timeframes that apply in New South Wales.
No variation is payable unless it is priced and accepted in writing before the work is done. A verbal instruction from the site supervisor is not an approved variation, and neither is a marked up drawing without a price.
The Principal holds 5 percent of each stage payment, released 90 days after carpentry practical completion, or earlier once any defect listed under clause 8 is rectified.
The Contractor is registered for GST, quotes its ABN on every invoice and is responsible for its own income tax, GST and the tax of anyone it engages. The Principal does not withhold tax from payments under this agreement.
A principal must pay superannuation where a contract is wholly or principally for a person to provide their own labour. This contract is not: it is priced by stage, the Contractor supplies plant and materials, and the Contractor may delegate the work. If the position is later determined differently, the parties will meet the obligation as required by law and adjust the remaining stage amounts.
Certificates of currency for the first three covers are given to the Principal before the Contractor first attends site, and again at each renewal. Work stops if a policy lapses, and time lost that way is not an extension of time.
The Contractor supplies all hand and power tools, nail guns, compressors, laser levels and scaffold to three metres. The Principal supplies the structural timber, cladding, linings and fixings, delivered to site, and any scaffold above three metres.
The Contractor checks each delivery against the order before use and reports damage or shortfalls the same day. Materials cut wrongly through the fault of the Contractor are replaced at the cost of the Contractor.
A safe work method statement is provided for each high risk activity before it starts, covering at least work at height, powered plant and voids in the floor structure. Work does not begin on that activity until the statement is on site.
The Contractor reports every injury, near miss and property damage incident to the site supervisor on the day it happens, and takes part in the investigation that follows.
Either party may stop work that is unsafe. Nobody is penalised for stopping work on safety grounds, and stopped time is treated as a delay rather than a breach.
The Contractor rectifies defective or non conforming work at its own cost within ten business days of written notice, or sooner where the defect holds up another trade.
The Contractor remains responsible for defects in its work for 12 months from carpentry practical completion, which does not limit any longer statutory warranty that applies to residential building work.
Either party may end this agreement on seven days written notice. The Contractor is paid for stages completed and for a fair proportion of the stage in progress, assessed jointly on site.
The Principal may end this agreement immediately for a serious safety breach, for work carried out without the required licence, or if an insurance policy required by clause 5 lapses and is not reinstated within two business days.
The Contractor may work for other builders during this agreement, provided the program dates in clause 2.2 are met.
Notices go by email to the two signatories. This agreement may be varied only in writing signed by both parties, and a variation to the work follows clause 3.3 instead.
The parties meet on site within five business days of a dispute being raised in writing. If it is not settled there, either may use the adjudication process available for construction payments. The laws of New South Wales apply.
The Contractor may not assign this agreement or the right to be paid under it without the written consent of the Principal. Subcontracting part of the work under clause 1.3 is not an assignment.
This agreement and Schedule 1 are the whole agreement for this package. They replace the quotation dated 26 August 2026 and anything said on site before signing, including any allowance discussed but not written down.
This agreement may be signed in counterparts and by electronic signature. A photographed or scanned signature page emailed to the other party has the same effect as an original.

Each amount is exclusive of GST and is subject to the 5 percent retention in clause 3.4. Stage 5 is not payable until the site is cleared of offcuts and packaging and the defects list has been walked with the site supervisor.

Signed by both parties. The Contractor confirms that its licence, insurances and induction cards are current as at the date of signing.

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Section by section

What each section is for, so you can keep the ones you need and drop the rest.

Cover
Names the package, the site, both businesses and the date the contractor first attends site.
Parties
Legal names, ABNs and builder and trade licence numbers, which matter here because working unlicensed ends the contract immediately.
Nature of the arrangement
Independent business, no employee entitlements, a right to delegate with notice, and the reason the classification is written out.
Classification table
Six factors with what this contract actually provides for each, from who controls the method to who pays for rework.
Scope and program
The carpentry package trade by trade, the start date, the completion date, and how weather and other trades move those dates.
Payment
A contract sum split into stages, invoicing and payment timing, written variations only, and a five percent retention.
Tax and superannuation
GST registration and no tax withheld, then the superannuation test spelled out with the facts that answer it and what happens if that changes.
Insurance
Four covers, who holds each and the minimum, plus the rule that a lapse stops work rather than pausing the clock.
Tools, plant and materials
What the contractor brings, what the builder supplies to site, and who pays when material is cut wrong.
Work health and safety
Safe work method statements before high risk activities, same day incident reporting, and a right to stop unsafe work without penalty.
Defects
Ten business days to rectify at the contractor's cost, and a twelve month defects period that does not cut across statutory warranties.
Schedule of stage payments
Five stages with the finished state each describes and its amount, totalling the contract sum before GST.

What makes this document work

It writes down how the work is really done

Six rows covering control, hours, delegation, tools, how the money is calculated and who carries the risk of rework. Naming someone a contractor decides nothing; this table is the part that would be read.

Money is tied to inspected stages

Five stages, each payable when the work is complete and inspected rather than nearly complete, with five percent held back for ninety days past carpentry practical completion.

Insurance is a condition of being on site

Certificates for three covers before the first attendance, work stops the day a policy lapses, and the time lost that way is explicitly not an extension of time.

Questions people ask

What makes someone a contractor rather than an employee?

The substance of the arrangement, not the word used. Whether the person controls how the work is done, can delegate it, supplies their own tools, is paid for a result rather than for time, and carries the risk of fixing their own mistakes.

Does a builder pay superannuation for a contractor?

Sometimes. Where a contract is wholly or principally for a person to supply their own labour, the superannuation guarantee applies even though the person invoices with an ABN. Pricing by result and supplying plant is what moves a contract away from that.

What insurance should a trade contractor hold?

Public liability, workers compensation for anyone it employs, and personal accident cover for a working director who is not covered by a workers scheme. Contract works and home building cover normally sit with the builder.

Is it better to pay a trade by the hour or by stage?

By stage, where the work can be described as finished states. It puts the risk of a slow week on the contractor, gives the builder something to inspect before paying, and removes most of the argument about a timesheet.

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