What You Need to Know About Fixed Price Contracts

Fixed price contracts are a common agreement between builders and customers. This type of contract offers customers the assurance that they will pay an agreed upon rate, regardless of any potential changes within the scope of the project. But what happens if a builder wants to increase the price? Can a builder change a fixed price contract?

The short answer is yes.

A builder may vary the price of a fixed-price contract in certain circumstances such as when there is an unexpected rise in costs or there was an oversight in estimating or miscommunication between parties. In these cases, it is best for both parties to discuss how to move forward before any work begins on the project.

It's important to note that, although variations can be made, all changes must be agreed upon by both parties prior to the commencement of work. Additionally, all variations should be fully documented and supported with evidence before being approved by both parties. If either party does not agree with the proposed variation, then it can be disputed through arbitration or mediation processes.

Fixed price contracts are beneficial because they provide customers with certainty over their budget and timeline for completion; however, it’s important to understand that variations can and will occur throughout the duration of your project. It’s also essential that you maintain open communication with your builder throughout each stage of your project so that any changes are documented properly.

Overall, fixed-price contracts provide stability and peace of mind during construction projects.

However, it’s important to understand that variations may need to occur along the way due to unforeseen circumstances or cost increases beyond anyone’s control. By maintaining open communication between both parties throughout each stage of your project, you can ensure that any needed changes are handled promptly and respectfully while still keeping within your original budget parameters. With this knowledge in hand, you can confidently embark on your next construction project knowing exactly what to expect from start to finish!