Fixed price is not the same as final price
A fixed-price contract fixes the cost of the work described in the contract documents. It does not fix the cost of work that is not described there. The gap between those two things is where almost every building dispute starts.
Provisional sums and prime cost items
A provisional sum is an allowance for work that has not been fully scoped — site costs are the classic example. A prime cost item is an allowance for a product not yet selected, like tapware or floor coverings. Both are legitimate tools. Both are also the easiest way to make a quote look competitive while leaving the real number open.
Our position is simple: site costs should be priced from the soil report and survey before the contract is signed, and prime cost allowances should be realistic enough that you can actually buy something with them.
Variations
A variation is any change to the contracted scope. Under Victorian law it must be in writing, priced, and signed before the work proceeds. If a builder is comfortable doing variations verbally, that is worth knowing early.
The two clauses worth reading twice
- The rise-and-fall or price adjustment clause. Some contracts allow the price to move with material costs. Check whether yours does, and if so, what caps apply.
- The extension of time clause. Look at what counts as a claimable delay and how many days are allowed for weather. This is what determines whether the completion date on page one means anything.
Every Unik contract is a fixed-price contract with an itemised inclusions schedule, and we will walk you through both of those clauses line by line before you sign anything.
