Provisional Sums: Closing A Loop Hole

Potential problems can arise in relation to provisional sums clauses in commonly used Standards Australia construction contracts such as AS4000, AS4300 and AS4902. Principals must be careful to amend contracts to reduce their risks.

Provisional sums for certain items of work or equipment in a construction contract are estimates only, and do not represent a maximum limit for that item of equipment or work. This is because it is not possible to accurately predict the cost of those items or work at the time of entering into the contract, or it is uncertain as to whether items of work will be required.

The most commonly used Standards Australia construction contracts (e.g. AS4000, AS4300 and AS4902) each contain clauses that deal with provisional sums in a similar fashion (see clause 3 of AS4000, clause 11 of AS4300 and clause 3 of AS4902).