Head contract
A head contract is the principal contract between the owner and the head contractor (builder) for the whole works; its obligations flow down to subcontracts.
Ask Chalkline about this →A head contract is the principal contract for a construction project: the agreement between the owner (the principal) and the head contractor (the builder) for the whole of the works. It sits at the top of the contractual chain. Every subcontract the builder enters, with trades, suppliers, and sometimes consultants, sits beneath it and is a separate agreement. Do not confuse the head contract (the document) with the head contractor (the party who signs it as builder).
The head contract matters to everyone below it because of flow-down. Obligations the builder owes the principal under the head contract, the program, the quality standard, insurance, WHS, and defects liability, are passed down to subcontractors through flow-down clauses in the subcontracts. A subbie can end up bound to terms set in a contract they never saw, which is why a subbie quote pack should make the relevant head-contract obligations visible rather than burying them in a one-line flow-down reference.
On residential jobs the head contract is usually a standard-form domestic building contract (HIA or MBA). On larger or design-involved jobs, a consultant’s agreement may be novated into the head contract so the builder takes over the design contract. Under the Security of Payment Acts, the party engaged directly by the principal is the “head contractor”, a position that carries its own obligations such as retention trust accounts on large projects.
Also known as: Principal contract, main contract, prime contract.
Category: Contracts / Building contracts.
Related
See also
References
- NSW Building and Construction Industry Security of Payment Act 1999 (verified 2026-05-30)
- HIA: Contracts Online (verified 2026-05-30)
Last updated: 2026-05-30. Verified: 2026-05-30. Quarterly review for currency.