Can my builder increase the price for my fixed price building contract?
When you sign a fixed price building contract, you expect certainty — the agreed price should cover the whole job. However, there are circumstances where the contract sum can rise or fall, even under a “fixed price” arrangement. Understanding these situations can help you avoid surprises and disputes with your builder.
Variations
One of the most common reasons the contract price changes is due to variations. If you request changes to the original plans or specifications (for example, upgrading finishes, changing layouts, or adding new work), the builder is usually entitled to charge extra. Similarly, if unforeseen site conditions arise that require additional work, the contract may allow the builder to claim extra costs.
Prime Cost Items and Provisional Sums
Many building contracts include Prime Cost (PC) items and Provisional Sums (PS).
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PC items are allowances for things like tiles, appliances, or fixtures where the exact selection hasn’t been made. If your chosen items cost more than the allowance, the total contract price will increase.
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PS are estimates for work where the scope or cost is uncertain, such as excavation or landscaping. If the actual cost is higher than the estimate, the builder can adjust the final price accordingly.
Legislative and Regulatory Changes
If government fees, levies, or regulatory requirements change after you’ve signed the contract, some contracts permit the builder to pass those extra costs on to you. It’s important to read the contract carefully to see whether this applies.
Time-Related Costs
Delays not caused by the builder — such as owner variations, late approvals, or adverse weather — may also give the builder a right to claim additional costs, especially if the contract includes provisions for extended time or increased labour/material costs.
Key Takeaway
A fixed price building contract doesn’t always mean the price is set in stone. Variations, PC items, PS allowances, regulatory changes, and time-related costs can all affect the final sum. Before signing, make sure you understand these clauses and get advice so you know exactly when your builder can charge more — and when they cannot.
👉 If you’re about to enter into a building contract, or if your builder is trying to increase the price, contact Twomey Dispute Lawyers. Our construction law team can review your contract, explain your rights, and protect you from costly surprises.
