You quoted a house frame in August. The contract is signed, the slab goes down in January, and the timber order has jumped since you did the sums. Nobody is going to pay you for the difference unless the paperwork already says so.
That’s the real question behind pricing in a rising market. It isn’t “how do I add a bit extra”. It’s “what can I legally write into the quote, and what do I do when I wear the increase anyway”.
Key takeaways
- A signed fixed price is usually fixed. Your own cost rises are generally your problem, not the client’s.
- Allowance items are your pressure valve. Prime cost items and provisional sums can move the price, but only in the way the contract says.
- Rise and fall clauses are state specific, and badly written ones get thrown out.
- Shorten quote validity and lock supplier prices the day the job is accepted.
- If you do wear it, cover the gap with cash flow, not by skimping on the build.
Can you put the price up after the quote is accepted?
Mostly no. A fixed price domestic contract is a promise. A general “costs went up” letter isn’t a variation. Under a standard fixed price contract, the price moves in only a few ways:
| How the price can move | What it needs |
|---|---|
| A variation (client changes the scope) | Written, priced and signed before the work, on domestic jobs in NSW, Queensland and Victoria. See our unpaid variations guide. |
| Prime cost and provisional sum adjustments | The items have to be listed in the contract, with the allowance and how any extra is worked out. |
| A rise and fall (cost escalation) clause | Only where your state allows it and the clause is clear. |
| Latent conditions or approvals | Whatever your contract provides, such as rock, council changes, or an extension of time. |
If you’re a subbie, the same logic applies up the chain. Your quote to the builder is the contract. If it says “fixed price, valid 30 days” and you start in month three, you’ve probably eaten the difference.
How do prime cost items and provisional sums protect you?
These are the most underused tools on small builds. Use them for things you honestly can’t price yet, not to hide a thin margin.
- Prime cost (PC) items are things the client hasn’t selected: tiles, tapware, appliances, light fittings. The allowance covers supply and delivery.
- Provisional sums cover work you can’t fully scope at signing, such as site works, retaining or landscaping. They usually include labour.
The state rules are strict about how they’re written. Consumer Affairs Victoria says the contract must list prime cost and provisional sum items with a cost breakdown, including estimated quantities and unit costs. If you plan to charge more than your actual cost increase, the contract has to state how the extra is calculated and the exact amount. A provisional sum must be a reasonable estimate, with a reasonable allowance for things like access and transport. Give the client a copy of the invoice or receipt as soon as you can.
In NSW the Fair Trading home building contract for work over $20,000 has its own clauses for provisional sums, prime cost items and variations. In Queensland, the QBCC has a guidance statement on prime cost and provisional sum items, and the allowances need to be a reasonable estimate. A padded or lowballed allowance is a dispute waiting to happen.
The common mistake: putting a cheap PC allowance on tiles so the headline price looks sharp, then arguing with the client when they choose the tiles they actually want. Set allowances at a realistic current price, and write down the margin you’ll add on any excess.
Can a builder use a rise and fall clause in your state?
It depends where the job is, and the rules are moving. Check your regulator before you copy a clause from an old contract.
| State | What we found | Where to check |
|---|---|---|
| South Australia | CBS says that without a rise and fall clause the price can’t be increased for changes in the builder’s costs, and a price that may change carries a “THIS PRICE MAY CHANGE” warning. | SA Consumer and Business Services |
| Victoria | Under the rules we found, escalation clauses were tightly restricted. The Victorian Government announced in 2025 that escalation clauses would be allowed on domestic work priced at $1 million or more, with price increases capped at 5 per cent, and consumers could cancel if costs rise by more than 15 per cent or timelines blow out by more than 50 per cent. CAV notes the Domestic Building Contracts Amendment Bill 2025 passed Parliament on 11 September 2025. | Consumer Affairs Victoria, Victorian Building Authority |
| Queensland | A rise and fall style clause has to be clear. In Perera v Bold Properties [2023] QDC 99, a clause letting the builder lift a $645,370 fixed price to its “current base price” was held void for uncertainty. | QBCC, a construction lawyer |
| NSW | Price adjustments sit in the contract’s variation and allowance clauses. Don’t assume you can add your own escalation wording. | NSW Fair Trading |
I haven’t confirmed when each Victorian change starts, so check the current rules before relying on them. The pattern across the states is the same: a vague clause that lets the builder pick the number is the one that fails.
For commercial work and subcontracts, the parties have far more freedom. A subbie quote can say “materials price valid 14 days, subject to supplier increase”. That’s a contract term, not a favour, so get it into the quote and the subcontract before you start.
How should you word a quote so the price holds?
Nothing fancy. Just clear:
- Put an expiry date on the quote. 14 to 30 days on a materials heavy job is common. After that, you requote.
- Name the big ticket materials. Timber, steel, bricks, roofing, windows. State what’s included and the allowance if it’s an allowance item.
- Separate what you can’t price. Use PC items and provisional sums, set at a realistic current price.
- State the start date assumption. If the job slides because of weather, approvals or the client, say what happens to the price.
- Keep a written trail. Send a variation in writing for every scope change, and keep supplier quotes on file.
None of that is legal advice you need to be scared of. It’s the same paperwork a good chippie keeps on the ute dash.
What do you do the day a quote is accepted?
The window between acceptance and purchase is where margin leaks.
- Order or lock the long lead items (frames, trusses, windows, steel) as soon as the contract is signed.
- Ask your supplier for a price hold in writing. Many will hold a quote for a set period, especially for a bulk order.
- Check the delivery date, not just the price. A price hold means little if the stock is three months away.
- Work out the deposit you can take. Our guide on builder deposit limits by state shows how much you can ask for up front on domestic work.
If buying early means paying early, see buying building materials in bulk for when it pays and how to fund it.
Example: a two person carpentry crew in Geelong
Example (invented business, round numbers): A two person carpentry crew quotes a $250k extension in August: frame, roof, lock-up and fixing. The quote is valid for 30 days. The client signs in week four, and the frame goes up in January.
The crew priced $40k of timber and framing materials at August prices. By the time they order, the supplier’s new quote is $44k. There’s no escalation clause, and the contract is fixed price. The $4k gap comes straight out of margin.
Here’s how the crew could have done it differently:
| Step | What they do | What it changes |
|---|---|---|
| At quote | Valid for 14 days, not 30. | Less time for prices to move before acceptance. |
| At signing | Order frame and trusses the same week and get the supplier to hold the price. | Locks the biggest number early. |
| In the contract | Tiles and fixtures as PC items at a realistic price. | The client carries the difference if they choose something dearer. |
| After signing | Send a written variation if the client changes the scope. | Extra work is paid for, not absorbed. |
Locking the timber early means paying a deposit or the full invoice well before the first progress payment. If the crew doesn’t have $40k sitting there, that’s where a short term loan makes sense: borrow against property you already own, or use an unsecured cash flow loan if you’ve been trading 6+ months, then repay it from the early progress claims. It’s one tool for one gap, not a way to fund a job that was underpriced from the start.
What if the price is locked and cash is short?
First, check whether you actually have a claim:
- Is the item a PC item or provisional sum with an allowance you can exceed?
- Did the client ask for anything that counts as a variation?
- Is there a valid escalation clause in the contract?
If the answer to all three is no, the increase is yours. Don’t cut quality or delay payments to your own subbies and suppliers to cover it. That creates a bigger problem down the track, particularly if a progress claim gets disputed.
Instead, put numbers on the gap and decide how long you need the money for. A few weeks of materials funding until the next progress payment is a very different need to a six month shortfall. If you own a home or other property with equity, the construction equity calculator gives you a rough idea of what you could use. If you don’t, building materials finance and cash flow loans for tradies are the two to look at first.
Want a quick read on which suits your job? Check your options here.
Which funding fits which materials gap?
| Situation | Likely fit |
|---|---|
| Lock a big timber or steel order before the price moves | Short term loan secured against property you already own, or building materials finance |
| Cover the extra cost of an order already in, until the next claim | Unsecured cash flow loan, based on business bank statements |
| Bigger shortfall across several jobs | Second mortgage or bridging loan against property with equity |
Our loans run from $20,000 to $5 million for business and investment purposes. Secured loans sit over property you or a guarantor already own, never over the finished value of the build, and no financials are needed for those. Bad credit and ATO debts are considered. Funding can happen in as little as 24 hours once the valuation and documents are in, and terms are typically 1 to 12 months. For unsecured loans you’ll need an ABN and at least 6 months of trading, and some are approved and funded within hours.
Price it right, then cover what you can’t control
You can’t control the timber merchant. You can control the quote date, the clauses, the allowance items and how fast you lock the order. Do those and most of the pain goes. Where a gap is still left, it’s a cash flow problem, and cash flow problems have fixes.
If you’re staring at a materials bill that landed before the claim did, we deal with that every week. Enquiring takes about 60 seconds, and asking doesn’t touch your credit file, since there’s no credit check when you first enquire. We don’t send your details to a pile of lenders, so your phone won’t light up with strangers. A real person who understands building looks at your job and calls you back.
Fill the form in accurately: what you need, what it’s for, the property value if you have one and what’s owed on it. That lets us match the right option first time.
