This article was written by Nancy Wang Principal Solicitor at W & G Lawyers.
A couple sits across the desk from us with a set of architect’s drawings, a builder they like, and a decision to make. The builder has offered two ways of contracting. Under the first, the builder will name a price and stand behind it. Under the second, the builder will charge whatever the work actually costs, plus a margin of 15 or 20 per cent, and has provided an “estimate” that looks reassuringly close to their budget. The builder prefers the second, and says it is fairer because nobody pays for risk that never materialises.
We see this conversation more often than we used to. Volatile material prices, trade shortages and the collapse of several well-known Queensland builders have made contractors reluctant to commit to fixed prices, and cost plus contracting — once reserved for bespoke or uncertain projects — is now being proposed for ordinary suburban homes. This article explains how Queensland law treats the two contracts differently, and why the choice matters more than most homeowners appreciate.
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