Changes to contracts

A provisional sum as described in the Domestic Building Contract Act is an estimate of the cost of carrying out particular work. The estimate includes the cost of supplying any materials needed for the work. An estimate is required if, after making all reasonable enquiries, the builder cannot give a definite amount for the item at the time the contract is entered into.

For example, when estimating for earthworks and excavation at the beginning of a job, the builder can work out a fairly good estimate of the amount of money required for the job without knowing what is actually under the ground. However, it is impossible to be absolutely certain about the final costs as it is based on rates. If the total volume in M³ of rock excavated was greater than the estimated amount, then the increase in cost is based on the rate stipulated in the contract.

Any difference between the provisional sum listed in the contract and the actual cost is paid by the client. This in effect changes the contract price.