When Contractual Certainty Matters – Lessons from Alorra v Bloc

The recent decision in Alorra Piling (NSW) Pty Ltd v Bloc Constructions (NSW) Pty Ltd [2025] NSWSC 1324 is the third in a recent series of cases highlighting a recurring theme in construction disputes: uncertainty about whether a construction contract exists and, if so, what its terms are.

Like the earlier decisions in Kumar v Frankies Cranes and Bettar Holdings v RWC Brookvale Investment, this case involved arguments over contract formation and the application of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA). In all three cases, the absence of clear, executed contractual documentation created fertile ground for litigation.

The Dispute

Alorra Piling (NSW) Pty Ltd (Alorra) claimed payment under SOPA for piling works on a Newcastle apartment project, while Bloc argued that the only binding document was a deed executed with a different Alorra group entity. The Court was asked to determine who the contracting parties were, how the contract was formed and what its terms were.

The Court’s Findings

The Court held that a construction contract existed between Bloc and Alorra, primarily on the terms of Alorra’s earlier quotation and subsequent conduct. While both parties had expressed an intention to formalise the agreement, negotiations for a formal subcontract were abandoned. Bloc directed work, Alorra performed it and Bloc made payments – conduct that objectively demonstrated an agreement.

The Court rejected Bloc’s argument that the deed with Alorra Pty Ltd constituted the construction contract. The deed served a very specific and limited purpose: it was not intended to be the main construction contract but rather a financial arrangement to facilitate an advance payment. It lacked essential terms such as price and did not contain mutual promises to perform or pay for work.

Similarly, unsigned scope of works documents and draft subcontracts were insufficient to establish binding terms.

Why This Matters

This case reinforces a critical lesson: uncertainty about contract formation and terms can lead to costly disputes. While the Court ultimately found a contract existed, the absence of a signed agreement left key issues – such as timing and risk allocation – open to interpretation. The judgment also underscores the importance of licensing compliance under the Home Building Act 1989 (NSW). If a contractor is not properly licensed for the work performed, they may lose the right to claim under SOPA – even if the work was completed and accepted. The Court noted that Bloc was conscious of its obligations not to engage unlicensed subcontractors and that Alorra’s licensing status was a factor in determining it as the contracting party.

The Broader Pattern

Together with Kumar and Bettar Holdings, Alorra illustrates how fundamental principles – intention to create legal relations, clarity of parties and agreed terms – remain recurring issues in construction law. In each case, litigation could have been avoided through clear, executed contracts.

Key Takeaway

In construction projects, particularly under SOPA, do not rely on informal arrangements or assumptions. Ensure:

• The correct entity is named and licensed.
• All essential terms – including scope, price, timing – are documented.
• The contract is signed before work commences.

Clear documentation is not just best practice; it is risk management.

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