Fixed price lump sum
A domestic building work contract can state a price that is fixed, but can also list items as being prime-costed or estimated and which may go up or down in price according to the actual acquisition price. There is normally a provision in the contract to vary the price according to agreed variations. These are generally variations that have been requested by the owner. A Fixed Price Lump Sum contract is the most widely used form of house building contract.
Rise and fall
A contract may contain a rise and fall clause and will also contain an agreed method of adjusting the costs to allow for fluctuations in labour and material costs during the construction period. Alongside the prices stated there must be words to the effect of ‘estimate only' or ‘this price may change'.
Rise and Fall contracts are very rarely used in the housing sector.
Cost-plus clause
Contracts that are cost-plus allow for the builder to charge for the actual cost of the work plus an agreed margin or percentage. In South Australia that percentage is limited to 15%.
Prime-cost items
The building contract may include the supply of particular items such as kitchen stoves or bathroom tiling up to a selected dollar value. The goods you select may exceed the nominated value and you may then be required to pay the additional cost plus a surcharge applied by the builder.
Provisional sums
Provisional sums are ‘best estimates' of building works that are to be contracted out during the building process. The provisional sums must be fair and reasonable estimates.
Copyright
Information on copyright for the Office of Consumer and Business Affairs website is provided on behalf of South Australia Central http://www.sacentral.sa.gov.au/site/page.cfm?u=60
Disclaimer
Information on the disclaimer for the Office of Consumer and Business Affairs website is provided on behalf of South Australia Central http://www.sacentral.sa.gov.au/site/page.cfm?u=61
Privacy
The South Australian Office of Consumer and Business Affairs (OCBA) is committed to protecting your privacy and the confidentiality of your personal information, consistent with the South Australian Government's Information Privacy Principles. If you would like to view the full privacy statement please visit: http://www.ocba.sa.gov.au/privacy.html
Webmaster
If you wish to provide feedback on the Office of Consumer and Business Affairs website please contact the Webmaster via email mailto:webmaster@agd.sa.gov.au
Accessibility
Information on accessibility for the Office of Consumer and Business Affairs website can be viewed at: http://www.ocba.sa.gov.au/accessibility.html
Information on copyright for the Office of Consumer and Business Affairs website is provided on behalf of South Australia Central http://www.sacentral.sa.gov.au/site/page.cfm?u=60
Disclaimer
Information on the disclaimer for the Office of Consumer and Business Affairs website is provided on behalf of South Australia Central http://www.sacentral.sa.gov.au/site/page.cfm?u=61
Privacy
The South Australian Office of Consumer and Business Affairs (OCBA) is committed to protecting your privacy and the confidentiality of your personal information, consistent with the South Australian Government's Information Privacy Principles. If you would like to view the full privacy statement please visit: http://www.ocba.sa.gov.au/privacy.html
Webmaster
If you wish to provide feedback on the Office of Consumer and Business Affairs website please contact the Webmaster via email mailto:webmaster@agd.sa.gov.au
Accessibility
Information on accessibility for the Office of Consumer and Business Affairs website can be viewed at: http://www.ocba.sa.gov.au/accessibility.html
