Are You Accidentally Liable? A Deed Lawyer's Guide to Executing Subcontractor Deeds and QBCC Contracts

Q: Can a site supervisor sign a supplier's credit application on behalf of the building company?

Under section 52 of the Property Law Act 2023 (Qld), a corporation may execute a document that is to have effect as a deed where it is signed by two directors, by a director and a secretary, by a sole director in defined circumstances, or by a lawfully authorised agent or attorney of the corporation. If your site supervisor has been validly appointed as the company's agent or attorney, their signature can legally bind the company. However, allowing field staff to execute trade agreements may increase the risk of the company assuming unbudgeted corporate liabilities without director oversight.

Q: Can a building company execute a deed without a common seal?

Yes, under section 127 of the Corporations Act 2001 (Cth), a company may execute a document without using a common seal if the document is signed by two directors, or a director and a company secretary. This mechanism provides a statutory safe harbour, which is why suppliers frequently demand this method for executing commercial guarantees and deeds.

Q: Do I need a signed variation form before doing extra work on a residential site?

Yes. Schedule 1B of the QBCC Act 1991 requires that variations to a domestic building contract be documented in writing and agreed to by the owner in writing before the work commences, subject to a limited defence for genuinely urgent work. Proceeding on an unsigned email instruction is, in most cases, highly likely to strip you of your statutory right to claim payment for the varied scope.

Q: Can a settlement deed for defective building work be signed electronically?

Yes, section 50 of the Property Law Act 2023 (Qld) expressly permits that a document that is to have effect as a deed may be in the form of an electronic document and may be electronically signed. While this allows for remote execution of settlement deeds, the enforceability of any exclusion clauses within that deed depends on drafting them narrowly, as you cannot contract out of QBCC statutory warranties.

John Merlo
14 hours ago
14 min read

Key Takeaways

Signing a subcontractor credit application without explicitly clarifying your capacity may expose you to personal liability for the building company’s debts.
Under the Property Law Act 2023 (Qld) (PLA), a company can electronically execute a deed, and a lawfully authorised agent or attorney may sign on the company's behalf—which may increase the risk of site staff inadvertently binding your company if their authority is not clearly confined.
Level 1 and Level 2 regulated contracts must be formally signed by both parties; relying on unverified electronic signatures can jeopardise the enforceability of your home building contract.
Proceeding with site variations on unsigned email instructions often violates Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), which is likely to strip the builder of their right to claim payment.

A plastering supplier has just refused to drop their sheets at your Gold Coast site until you sign and return their three-page commercial credit application. The materials are sitting on the truck, the framing is ready, and your supervisor is staring at you waiting for the green light. You need the materials now, so you quickly scribble your signature at the bottom of the supplier's form and email a photo of it back from your phone.

By simply signing that document without explicitly restricting your capacity, you may have just unknowingly executed a deed of guarantee, putting your personal assets—including your family home—on the line if the building company later disputes a defective batch of materials and withholds payment.

This article details how Queensland licensed residential builders must manage the execution of fast-paced site trade agreements, the strict statutory mechanics for binding deeds, and the rigid signature rules required to enforce QBCC regulated domestic building contracts.

The Site Trap: When a Credit Application Becomes a Personal Guarantee

Picture the scene: a supplier's credit application on the bonnet of a ute, the site waiting, and materials you need unloaded now. The pressure of project delays is intense, but scribbling a signature in the wrong box could inadvertently bypass the corporate veil and expose your personal assets to trade debt. This section provides the immediate procedural steps to execute the document safely and reject unexpected guarantee clauses before the materials are unloaded.

Separating Corporate Trade Debt from Personal Guarantee Liability

A commercial credit application typically contains two distinct legal mechanisms: a trade agreement designed to bind your company, and a personal guarantee clause attempting to bind you individually.

In Queensland construction procurement, the rule is simple but easily missed: sign as a director on the trade agreement, and the company carries the debt; sign the separate personal guarantee provisions in that same supplier application, and you carry it personally.

Signing as a director creates a contractual exposure for the corporate entity, meaning the supplier's primary recourse for unpaid invoices is against the building company itself. However, if a court interprets your signature block as endorsing the separate guarantee clauses, it opens a second door for the supplier—one that bypasses the company structure entirely and may allow them to pursue you personally, reaching straight to your own bank account and home. When formally executing personal guarantees, the law generally requires clear intention; however, courts may consider a single, poorly marked signature at the end of a bundled application as sufficient evidence that you intended to assume personal liability for the trade debt.

The Two-Director Safe Harbour Under Section 127

Section 127 of the Corporations Act 2001 (Cth) provides the standard statutory mechanism for a company to execute documents and deeds. Building companies can validly execute contracts and deeds without a physical common seal if the document is signed by two directors of the company, or a director and a company secretary.

Because this mechanism creates a statutory assumption that the document was properly executed, suppliers and subcontractors will frequently demand this specific execution method on their credit applications and deeds of guarantee. Complying with this procedural requirement ensures the corporate entity is undeniably bound to the trade agreement, which aligns with standard director duties builder company obligations regarding proper corporate governance and verifiable record-keeping.

What to Cross Out Before Returning the Subcontractor Application

To mitigate the risk of inadvertently assuming personal liability on site, builders must proactively mark up trade applications before returning them. While these defensive steps strengthen the argument that a court should view your signature strictly in a corporate capacity, their protective value depends on whether the supplier accepts the altered document or rejects it entirely.

Physically strike through the guarantee: Draw a clear line through any clause or separate page titled "Deed of Guarantee" or "Director's Guarantee" to visibly demonstrate your refusal to agree to those terms.
Specify your corporate capacity: Always write "For and on behalf of [Your Company Pty Ltd]" immediately next to your signature to establish that the execution of documents is strictly a corporate act.
Reject personal liability in writing: When emailing the signed application back from site, include a sentence stating you are agreeing to the trade terms solely on behalf of the company and explicitly rejecting the personal guarantee.
Check against regulator guidance: Review baseline governance expectations for the Execution of Documents (ASIC) to ensure your internal site procedures align with standard corporate execution practices.

The Property Law Act 2023: Can a Site Manager Now Bind the Company?

It isn't only your own signature that can put the company on the hook—under recent reforms, your staff's signatures now carry much the same weight.

Your focus shifts from your own signature to the daily actions of your site staff, who routinely sign delivery dockets, variation requests, and trade agreements. With recent changes to Queensland property law, a real question arises: could a project manager out in the field legally bind the company to significant financial liabilities, or even a deed, without formal director approval? This section clarifies the new statutory rules for electronic execution and details who actually has the legal authority to sign away the company’s money.

How Section 52 Governs Corporate Execution of Deeds

The PLA introduced a modernized statutory framework for how corporations can execute binding documents within the state. According to section 52 of the PLA, a corporation may execute a document that is to have effect as a deed, without using a seal, if the document is signed by two directors, by one director and one secretary, by the sole director of a proprietary company in defined circumstances, or by a lawfully authorised agent or attorney of the corporation.

In short, s 52 of the PLA largely mirrors the signatory model under the Corporations Act, but it expressly preserves a further route: a company may be bound where a lawfully authorised agent or attorney signs on its behalf. As outlined in the Property Law Bill 2023 — Explanatory Note, this state-level reform confirms and modernises the ways in which corporations can validly execute deeds and complex trade agreements. It is this agent-or-attorney pathway—rather than any new "single officer" rule—that a builder must manage carefully, because authority delegated to a commercial manager or project director can bind the company without the signatures of its statutory directors.

The Hidden Danger of Single-Officer Electronic Signatures

Expert insight: While Queensland law now permits a company to be bound by a deed signed electronically by a lawfully authorised agent or attorney, residential building companies risk severe financial exposure if site staff inadvertently bind the corporate entity to onerous supplier terms under a delegated authority that was never properly confined. The real trap is that the risk rarely announces itself at the point of signing — it surfaces months later when a supplier's account goes into dispute and the credit terms are pulled out and read properly for the first time.

In practice, the exposure builds quietly. A supervisor "just gets the account open" so the next delivery lands, taps through a supplier's portal on a tablet, and the terms that come attached include a director's guarantee, an interest-on-default clause, or a set-off provision that reaches across every project the builder runs with that supplier.

Under section 127 of the Corporations Act, a supplier dealing with directors expects two signatures and tends to scrutinise who is signing. Under s 52 of the PLA, a company can also be bound where a lawfully authorised agent or attorney signs on its behalf, so a supplier may accept a single delegated signature and the natural friction that used to slow these things down can fall away. Fewer signatures means fewer chances to catch a bad clause before it binds.

The controls that hold up are the boring ones. Put authorised officer status in writing and keep it narrow — name the individuals, cap the dollar value they can commit, and state expressly that credit applications and any document headed "deed" or "guarantee" are excluded from their authority. Then tell your suppliers who your authorised officers actually are, in writing, so a supervisor's signature sits outside the authority the supplier was ever told to rely on. Authority you have never communicated externally is far harder for a supplier to lean on later.

Getting ahead of this is far cheaper than cleaning it up. A short conversation to draft a one-page authorised-officer policy now costs a fraction of defending a supplier's guarantee claim later—if you need help putting those internal execution controls in place, that is the time to speak to us.

Defending Against Ostensible Authority Claims by Subcontractors

Warning: If a subcontractor consistently relies on your site supervisor’s signature for major variations over the course of a build, the company may be legally bound to pay those variations even if the supervisor lacked actual internal authority to approve them. The doctrine of ostensible authority means that if the builder’s conduct leads a trade to reasonably believe the manager is authorized to sign off on a subcontractor dispute builder Queensland resolution, a tribunal is likely to enforce the agreement against the company.

To mitigate this risk, builders must enforce rigid, written boundaries regarding who is permitted to execute financial agreements, as failure to do so can severely weaken any defence against a subcontractor's payment claim. Advice from the Queensland Law Society (QLS) often underscores that consistent internal protocols are necessary to prevent field staff from inadvertently creating binding corporate liabilities.

Strict Signature Rules for QBCC Regulated Contracts

The risk does not stop at your suppliers—it follows you into your homeowner contracts. Before you send out a QBCC regulated contract via standard electronic signature software to lock in a new build, one question matters most. Before turning the first sod, you need absolute certainty that your chosen method of execution strictly complies with the regulator’s demands, ensuring the contract is actually enforceable when you issue that critical first progress claim. This section outlines the rigid statutory execution requirements for domestic building work.

Level 1 and Level 2 Contract Execution Demands

Under Schedule 1B of the QBCC Act, a regulated domestic building contract is only fully compliant when it is reduced to writing, dated, and formally signed by both the licensed builder and the homeowner.

The same rule runs through the whole framework. Section 13 of Schedule 1B to the QBCC Act mandates that a level 1 regulated contract must be in writing and signed by both the builder and the owner. Section 14 extends the identical signature and writing requirements to level 2 contracts. In practice, the defects that sink these contracts are mundane rather than dramatic. The recurring culprits are:

The undated signature page: the contract is signed but nobody enters a date, leaving a gap that undermines compliance.
The spouse who is on title but never signed: one owner signs while the other, equally registered on title, does not.
The handshake start: work commences on a verbal agreement, and the contract is signed only after the job is already underway.

Where a couple owns the land jointly, get both signatures — a contract signed by one of two registered owners is a recurring source of grief when the relationship later fractures mid-build. It is also worth remembering that the compliance obligation and the penalty exposure fall on the builder, not the owner, so a homeowner who benefits from a defective contract has little incentive to fix it and every incentive to raise it when a payment dispute arises. Failing to strictly adhere to these execution demands means the contract fails to comply with the Schedule 1B framework, leaving the builder exposed to regulatory penalties and rendering the foundational agreement structurally defective before site possession even occurs.

Identity Verification for Electronic Contract Signing

Expert insight: Many QLD builders mistakenly believe that standard electronic signatures—like a typed name or a basic DocuSign mark—on a residential building contract automatically comply with the strict writing requirements of Schedule 1B of the QBCC Act. The problem is not usually whether an electronic signature is legally capable of binding someone — it generally is — but whether you can prove this homeowner applied that signature with the intention to be bound.

The dispute you should plan for is the one where the owner, facing a progress claim they do not want to pay, simply says "that is not my signature" or "I never agreed to that version". If all you can produce is a typed name in a box, you are relying on the owner's honesty, which is exactly what has already broken down by the time you are in a payment fight.

This is where the execution platform earns its keep. A typed name proves almost nothing on its own; what carries weight in a tribunal is the audit trail sitting behind it — the email address the link was sent to, the IP address, the timestamps, and any identity step the signer had to clear before signing. Keep the completion certificate the platform generates, not just the signed PDF, because that certificate is often the document that actually answers the "prove it was me" challenge.

A practical habit that helps: send the signing link to an email address you have independently confirmed belongs to the owner, and avoid letting one party forward the document around to sign on another's behalf. If a spouse signs for a spouse "to save time", you have quietly reintroduced the same authenticity gap you were trying to close.

While the Queensland Building and Construction Commission (QBCC) requires strict compliance, ensuring your electronic execution platform captures adequate verification data is a critical evidentiary factor when enforcing the agreement.

The Payment Risk of Improperly Signed Variations

Warning: Proceeding with site variations based solely on a verbal instruction or an unsigned email is, in most cases, highly likely to strip you of your right to claim payment for that extra work. Schedule 1B requires that a variation be put in writing and that the owner agree to it in writing before the variation work commences, subject to a limited statutory defence where the work is genuinely urgent and it is not reasonably practicable to document the variation first. If you bypass this procedural trigger without falling within that narrow exception, QCAT's discretion to award payment is generally limited, and you can usually expect to bear the financial loss for the undocumented scope changes.

Executing Settlement Deeds for Defective Work: When to Engage a Deed Lawyer

You have finally negotiated an end to a painful defect dispute with a difficult homeowner, and a draft settlement deed is sitting in your inbox ready to sign. After months of stress, you need absolute certainty that once this document is executed, the homeowner cannot circumvent the release and drag the company back into the tribunal six months later. This section details how to validly execute a settlement deed to permanently quarantine your liability.

Formally Binding the Homeowner to the Release

To properly bind a homeowner to a defect settlement, the deed must be executed in accordance with Queensland's modern property law framework.

When resolving a residential defect dispute, a settlement deed can now be validly executed in an electronic format and electronically signed by all parties under the updated Queensland property law framework. Section 50 of the PLA expressly states that a document

that is to have effect as a deed may be in the form of an electronic document and may be electronically signed. This procedural mechanism streamlines the closure of site disputes, allowing you to secure the homeowner's binding signature remotely. However, while electronic execution is valid, if you have concerns about the homeowner's future intentions, you should get legal advice to ensure the release is robustly drafted to withstand future tribunal scrutiny.

The Limits of Exclusion Clauses in Defect Deeds

While an exclusion clause within a settlement deed is designed to extinguish all future claims regarding the specified defect, its enforceability depends heavily on specific, narrow drafting.

These release provisions may create a separate exposure channel if drafted too broadly. Because builders cannot contract out of the non-excludable statutory warranties mandated by the QBCC Act, attempting to insert a blanket waiver against all future latent defects is likely to fail if challenged. Courts and tribunals have scrutinized similar clauses where the release attempts to override these statutory consumer protections. Consequently, the clause's effectiveness turns on restricting the release exclusively to the specific, identified items that were the subject of the settlement, rather than attempting to shield the builder from unrelated future warranty claims.

A defensible release is a narrow one: it names the specific defects being settled, ties the waiver to those identified items alone, and steers clear of any blanket wording that tries to override the statutory warranties. If you are drafting a deed to conclude a significant site failure, have a deed lawyer or Queensland building and construction lawyers pressure-test the release before you sign—it is the difference between closing the dispute for good and inviting the homeowner back into the tribunal.

Conclusion

When that plastering supplier’s truck rolls up to your site and the driver hands you a commercial credit application on a clipboard, the pressure to just sign it and get the materials unloaded is immense. But as this article highlights, executing that document without explicitly defining your corporate capacity can inadvertently bypass the building company's structure, exposing your personal assets to the supplier if a payment dispute arises.

You now know that under the Property Law Act 2023, staff who hold a delegated authority as the company's agent or attorney can potentially bind the company to deeds by electronic signature without director approval, and that the QBCC enforces rigid signature requirements under Schedule 1B before any residential contract or variation can be safely relied upon for payment. Execution is not just admin—it is the moment financial liability is crystallised.

Your immediate next step should be to audit your site's standard operating procedures. Implement a rigid internal policy that explicitly dictates which specific managers are authorised to electronically execute trade agreements and variations, ensuring your corporate risk is actively managed before the next delivery truck arrives.

FAQs

Can a site supervisor sign a supplier's credit application on behalf of the building company?

Under section 52 of the Property Law Act 2023 (Qld), a corporation may execute a document that is to have effect as a deed where it is signed by two directors, by a director and a secretary, by a sole director in defined circumstances, or by a lawfully authorised agent or attorney of the corporation. If your site supervisor has been validly appointed as the company's agent or attorney, their signature can legally bind the company. However, allowing field staff to execute trade agreements may increase the risk of the company assuming unbudgeted corporate liabilities without director oversight.

What happens if I sign a credit application without specifying my corporate capacity?

If you sign a document containing a guarantee clause without explicitly restricting your signature to a corporate capacity, a court may interpret this as an intention to be personally bound. This interpretation is likely to open a second door for the supplier, allowing them to pursue your personal assets for the company's unpaid trade debts. Always write "For and on behalf of" your company next to your signature.

Does an electronic signature make a QBCC residential building contract valid?

An electronic signature can be valid, but Schedule 1B of the QBCC Act 1991 requires that level 1 and level 2 regulated contracts must be in writing and dated and signed by or on behalf of each party. The enforceability of the contract often turns on whether your execution software adequately verifies the homeowner's identity; basic typed signatures may fail this evidentiary test if the owner later denies signing.

Can a building company execute a deed without a common seal?

Yes, under section 127 of the Corporations Act 2001 (Cth), a company may execute a document without using a common seal if the document is signed by two directors, or a director and a company secretary. This mechanism provides a statutory safe harbour, which is why suppliers frequently demand this method for executing commercial guarantees and deeds.

Do I need a signed variation form before doing extra work on a residential site?

Yes. Schedule 1B of the QBCC Act 1991 requires that variations to a domestic building contract be documented in writing and agreed to by the owner in writing before the work commences, subject to a limited defence for genuinely urgent work. Proceeding on an unsigned email instruction is, in most cases, highly likely to strip you of your statutory right to claim payment for the varied scope.

Can a settlement deed for defective building work be signed electronically?

Yes, section 50 of the Property Law Act 2023 (Qld) expressly permits that a document that is to have effect as a deed may be in the form of an electronic document and may be electronically signed. While this allows for remote execution of settlement deeds, the enforceability of any exclusion clauses within that deed depends on drafting them narrowly, as you cannot contract out of QBCC statutory warranties.

This guide is for informational purposes only and does not constitute legal advice. For advice tailored to your specific circumstances, please contact Merlo Law