Changing From A Fixed-Price To A Time-And-Materials Contract: Homeowners Beware

Homeowners entering into a fixed-price contract with a contractor for the building or renovation of their home, should be mindful of the contractual implications a change to payments on a time-and-material basis might entail. We see this occur sometimes as contractors, particularly small ones, find it difficult to carry construction costs under fixed price arrangements.

If the project is already underway, homeowners may feel pressured to agree to this or may come to agree on the basis of assurances made by the contractor that it will ensure speedier project completion. Often this is not the case and there are other things homeowners should know as well.

Some of the other potential disadvantages homeowners should be aware of, include: