Is an unsigned building contract enforceable by the builder under the Home Building Act (NSW)?

Section 10(1)(c) of the Home Building Act (NSW) provides that a builder who contracts “in contravention of any provision [of the Home Building Act (NSW)] is not entitled to damages or to enforce any other remedy in respect of a breach of the contract…”.

In a recent case before the Supreme Court of New South Wales, the homeowner sought to avoid the obligation to pay the builder the contracted amount, based on the contract not having been signed.

Relevant facts

The undisputed facts between the homeowner and builder included that:

• there was a contract between them, which recorded the obligations of the parties in writing, sufficiently so that there was no dispute as to works required to be performed under the contract; and

• the contract was never signed, and therefore the builder never gave the homeowner a signed copy of the contract.

The homeowner argued that because the contract was not signed as required by section 7 of the Home Building Act (NSW), the builder could not enforce its entitlement to payment of the agreed contract price.

The homeowner argued that this was because section 10(1)(c) of the Home Building Act (NSW) provides that a builder who contracts in contravention of the Home Building Act is not entitled to damages or to enforce any other remedy in respect of a breach of the contract.

The Supreme Court of New South Wales upheld a decision of the NCAT Appeal Panel which found that an unsigned contract did not disentitle the builder to damages or other enforcement remedies.

The homeowner was ordered to pay the builder the sum of $105,517.09, being the total of two invoices that the builder relied upon as due in accordance with the terms of the contract.

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