The reforms to Victoria’s security of payment laws commenced in April 2026.
These laws introduce a significant shift in how time bar provisions will operate in construction contracts.
A move away from strict contractual enforcement
Time bars have long been a cornerstone of construction contracts. They typically require contractors to give notice of claims (such as extensions of time, variations, or delay costs) within a prescribed period, failing which the entitlement is lost.
The Victorian reforms directly target these provisions. They introduce a statutory regime that allows certain time bars to be declared “unfair” and therefore unenforceable in a dispute.
This is not a minor adjustment. It represents a policy shift away from strict contractual compliance and towards a fairness-based assessment of notice provisions.
These reforms specifically cover “notice-based time bar provisions”: clauses that make an entitlement to payment, an extension of time, or release of performance security contingent on giving notice.
When will a time bar be considered unfair?
Under the proposed laws, a time bar may be declared unfair if it meets either of two key criteria:
- it is not reasonably possible to comply with, or
- compliance would be unreasonably onerous.
This introduces a degree of subjectivity that has not previously existed in Victoria’s regime.
For example, a clause may be unfair where the time for giving notice expires before the contractor could reasonably become aware of the relevant event. In practice, this often arises where contracts tie notice periods to when an event occurs, rather than when it is discovered.
Similarly, a provision may be unfair if it imposes excessive administrative burdens within a short timeframe. For instance, requiring detailed substantiation, repeated updates, or extensive documentation that is disproportionate to the claim.
Broad discretion for decision-makers
It also matters who can determine whether a time bar is unfair.
The power extends to adjudicators, arbitrators, and even expert determiners. Given the anticipated increase in adjudication under the new regime, this sharply raises the likelihood that time bars will be scrutinised in practice.
If a provision is declared unfair in a particular dispute, it has no effect in relation to that entitlement.
A principal may lose the ability to rely on a time bar to defeat a claim, even where the contractor has clearly failed to comply with contractual notice requirements.
A broader context: expanding claimant rights
These time bar reforms sit within a broader overhaul of the security of payment regime, which expands the types of claims that can be pursued and strengthens adjudication as a dispute resolution pathway.
The reforms are designed to improve cash flow and increase the use of adjudication in Victoria. This means more disputes will be determined quickly, and often by adjudicators who will also have the power to disregard unfair time bars.
That means time bars may no longer provide the same level of protection they once did, particularly in fast-moving payment disputes.
There’s a difference between common law waiver and estoppel, and the statutory restrictions on notice-based time bars. At common law, a principal may lose the right to rely on a time bar through its own conduct, where waiver or estoppel is established. The legislation, by contrast, may render certain notice-based time bars ineffective regardless of the parties’ conduct.
Even if no waiver or estoppel arises, a contractual time bar may still be unenforceable to the extent it is inconsistent with the statutory protections.
What does this mean in practice?
For principals, the reforms introduce real risk. A strategy that relies heavily on strict time bar compliance to manage claims exposure may no longer hold.
For contractors, the changes provide an opportunity. Claims that might previously have been defeated on technical notice grounds may now proceed, particularly where compliance was difficult or unreasonable.
However, contractors should not assume time bars are irrelevant. The provisions are not automatically void, and must be challenged and declared unfair.
Practical steps
Both principals and contractors should take proactive steps now.
First, review standard form contracts and template agreements. Time bar clauses should be reassessed to ensure they are reasonable, achievable, and proportionate. Overly aggressive provisions are more likely to be challenged.
Second, reconsider contract administration practices. Even if time bars may be weakened, timely and well-documented notices remain important to preserving claims and managing disputes.
Third, avoid relying solely on time bars as a defence strategy. Parties should consider alternative legal and factual grounds to support their position in a dispute.
A shift that cannot be ignored
By introducing a fairness test for time bars, the reforms reduce the certainty of strict contractual enforcement and increase the role of discretion in dispute resolution.
For industry participants, time bars will still matter, but they will no longer be absolute. Those who adapt their contracts and processes early will be best placed to manage the risks (and opportunities) these reforms present.
