Beyond the Standard Form – Why Your Security Clauses Might Be Leaving You Exposed in 2026
In the Brisbane construction landscape, the “standard form” contract is often treated as a safety blanket. However, as recent 2026 decisions in the Supreme Court of Queensland have highlighted, relying on unedited standard clauses for security and retention can be a multi-million dollar mistake.
At Roberts Litigation, we frequently see disputes where a party’s right to call on security is far more restricted—or far broader—than they initially realized. Whether you are a Principal looking to protect against consequential loss or a Contractor trying to freeze a drawdown, the nuances of your contract drafting are currently under the microscope.
The Myth of the ‘Settled’ Section 67J
For years, many in the industry operated under the assumption that Section 67J of the Queensland Building and Construction Commission Act 1991 provided a universal 28-day notice protection before any security could be used.
However, recent 2026 case law (such as Rawcorp Pty Ltd v MDP No 15 Pty Ltd) has reinforced a critical distinction that every Brisbane project manager needs to understand: Section 67J generally applies to debts and liquidated amounts—not necessarily to unliquidated damages.
If your contract is “bespoke” or has been heavily modified from the standard AS-form to include broad recourse rights, you may find that the statutory 28-day notice requirement does not apply to consequential loss claims.
Risk Allocation vs. Security
Modern litigation is shifting the view of security clauses. They are no longer just a pot of money for “proven” defaults; they are increasingly viewed by the Courts as risk-allocation devices.
In practice, this means:
- For Principals: If your clause allows recourse on a “claim” rather than a “proven entitlement,” you may be able to hold the funds while the underlying dispute is resolved—shifting the “cash flow pain” to the contractor.
- For Contractors: If you haven’t scrutinized the specific wording of your security clause, you may have unintentionally signed away your right to an urgent injunction to stop a drawdown.
The 2026 Checklist for Brisbane Construction Contracts
Before signing off on your next project in South East Queensland, consider these three strategic questions:
- Does the “Trigger” match your intent? Does the contract require a “debt due and payable,” or simply a “non-fraudulent claim”? The difference determines who holds the money during a two-year litigation battle.
- Is your Superintendent’s status clear? We are seeing an increase in disputes where the validity of a security call is challenged based on the Superintendent’s licensing or independence.
- Does your contract account for the 2026 Procurement Codes? With new codes of practice emerging from the Wood Commission of Inquiry, ensure your EBAs and subcontracts don’t inadvertently trigger non-compliance issues that could see you excluded from Government-funded work.
The Bottom Line
In construction, your contract is your first and last line of defense. In an environment where the Supreme Court is increasingly literal in its interpretation of “bespoke” clauses, “standard” is no longer enough.
If you are facing a dispute regarding a call on security, or if you are about to sign a contract for a major project, the time for “smart strategy and fast action” is now—not after the bank guarantee has been cashed.
About Roberts Litigation:
Based in the Brisbane CBD, Roberts Litigation is a specialist firm dedicated to resolving complex business and construction disputes. Our team provides decisive, result-driven representation for the Queensland construction and infrastructure sector.
