Fluctuations in construction contracts


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Construction expert
Practice notes
Brexit

Fluctuations in construction contracts


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Construction expert

Practice notes
Brexit
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What are fluctuations?

Fluctuations provisions are clauses in construction contracts that allow the contract sum to be adjusted to take account of changes to the price of labour, materials and other costs throughout a construction project.

By way of example, if a contractor tenders on the basis of prices current at the time of tender, and then inflation results in the cost of procuring the works increasing during the project, the contractor bears that cost. Where there are no fluctuations provisions in the building contract the contractor is deemed therefore to have taken account of inflation and the risk of any inflationary increases in its pricing. On the other hand, where there is no fluctuations clause, if prices go down, a contractor could benefit from the reduced costs.

Where fluctuations clauses are included in a construction contract, the contractor could be entitled to be reimbursed some or all of any additional costs caused by rising prices. Calculating the increased cost may be achieved by using an index based formula, or by using a published list of market prices for

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United Kingdom
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Fluctuations definition
What does Fluctuations mean?

Some standard form contracts contain provisions which entitle the contractor to an addition to the contract sum to take into account of differences in the cost of labour and material between the tender date and the time when the work is actually done. These provisions must be excluded if the employer and contractor wish to agree a fixed price.

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