Covid price increases to fixed price contract after work almost completed
Anonymous user 09/03/2024 - 3.24 PM
Hi,
We have had an extension done at our house. Very happy with the work completed to date, just some final bits & pieces to do with the painting and decorating inside. Some hard landscaping to complete as well after we move back in.
Fixed price contract was agreed end of last year, and now the work has been done the contractor is saying that the material price increases has meant he has lost money on our job and wants to pass some of that cost over to us.
We have a great relationship and planning to have a sit down to discuss the extra project costs he is proposing. Wanted to get an understanding about how reasonable his request is both legally and ethically. No allowance for material cost changes in contract.
Advice or experience appreciated
Are you a tradesperson and able to answer this question?
Hi
I understand you feel like you are in an uncomfortable situation at the moment but due to the last 18 months its impossible to stand by a fixed price for any project that was priced 6- 12 months ago .
Material prices and availability have caused alot of problems.
All I can say is be fair and sort something out between yourself and your contractor as its not fair for anyone to loose out ! But unfortunately this is where we are .
There is no way I could honour a fixed price I quoted last year as material costs have been blown out the water .
Just talk and come to a fair conclusion .
It is uncomfortable but you will both have to give a bit .
Thats fair in my opion.
Not what anyone wanted but just the way its happened.
Answered24 August 2021
31
Anonymous user
Hi,
Yes I agree. Prices have probably gone up over 30% minimum even this year. Timber goes up week in week out. We as contractors try our best to stick to our agreed price but sometimes things like prices we can't control. The actual rise in costs over the past year or so will be your contractors profit margin gone so I'm sure you will find a happy medium.
Cheers, Ross
Answered17 September 2021
1
Anonymous user
A fixed price contract is something that not many self employed builders adopt, although it is something that i do whenever possible because of the confidence and reassurance that it gives the clients. I don't know of any tradesman that hasn't been stung on numerous occasions in the last year and a half by price increases. On a small job its a bit of a take it on the chin scenario, however with extension and building projects that last months being notorious for hemorrhaging money anyway, the stakes are higher and the losses can be also.
Depending on the wording of your contract i reckon it is down to your sense of what is right and what you think his final product is worth.
