Top 5 tips for cost escalation clauses in construction contracts

Cost escalation clauses, interchangeably referred to as rise and fall clauses, have been a major topic of conversation in the construction space and appear to be a crucial answer to the uncertainty facing builders when it comes time to try to price jobs. It became increasingly common for projects that were initially profitable to eventually become unprofitable, primarily due to significant increases in variable costs like materials and labour from the time of pricing to project completion. Cost escalations clauses appear to be the solution to this problem as they allow you to claim for these increased costs. Over a series of articles, we have explained:

• what to do if a builder attempts to increase the price of a build contract (https://rcrlaw.com.au/builder-increases-prices-under-contract/);