A builder’s entitlement to increase the agreed contract price depends on the terms and conditions of the contract. Standard building contracts do not, generally, include a term allowing the builder to increase the contract price, however some building contract will contain special terms and conditions which may allow the builder to increase the contract price.

You should always review the contract before you sign it to make sure you understand what the builder can and cannot do. If your builder proposes to increase the contract price contrary to the terms and conditions of the contract, you should consider negotiating with the builder, where possible, as to a reasonable price increase, if there is no agreement as to the price increase, you may consider mutual termination of the contract.

You should seek legal advice before agreeing on a price increase or taking steps towards termination as there could be significant financial and legal consequences.

HomeBuilding Pty Ltd (formerly known as Hammond & Simonds Pty Ltd ABN 61 162 746 929) v Cappello & Anor [2023] NSWDC 338. https://www.caselaw.nsw.gov.au/decision/18a3e5800aa2a79503c671ef 

If you are a homeowner or builder and require assistance with your building contract, the Commercial Litigation Team at Adams & Partners Lawyers can help you. Contact us on (02) 4721 6200.

Written by Malik Anne

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