The material cost adjustment clause is often included in fixed-price contracts in the construction industry. The application of such a clause allows the contractor to pass on to their client any increases in material costs that occur during the course of the project. <\/p>\n\n
When building or renovating a property, disputes often arise due to disagreements over the amounts claimed as additional costs. Although a fixed-price contract aims to establish a fixed price for the execution of a construction project, the contractor may still claim additional costs from the client. <\/p>\n\n
The definition can be found in article 2109 of the Code civil du Qu\u00e9bec<\/em>:<\/p>\n\n \" Where the price is fixed by the contract, the client shall pay the price agreed, and may not claim a reduction of the price on the ground that the work or service required less effort or cost less than had been foreseen. Similarly, the contractor or the provider of services may not claim an increase of the price for the opposite reason.<\/p>\n\n\n\n Unless otherwise agreed by the parties, the price fixed by the contract remains unchanged notwithstanding any modification of the original terms and conditions of performance. \"<\/p>\n<\/blockquote>\n\n It is also possible for the parties to agree otherwise and make changes to the agreed contract along the way. Attention<\/u><\/strong>: Even if your written contract clearly bears the title \u201cFixed-price contract\u201d and the contractor's discussions and representations indicate that it is a fixed price, you should read the contract carefully and pay attention to the price adjustment clauses.<\/p>\n\n Although your contract may contain other types of price adjustment clauses, in this article we will only discuss the material cost adjustment clause. The application of such a clause allows the contractor to pass on to the client any increases in the cost of materials that occur during the course of the project. <\/p>\n\n However, it is important to note that the contractor must justify this increase; it cannot result from negligence on their part. They must therefore demonstrate that they have checked with their suppliers in advance regarding the cost of materials, their availability, and the period for which the price is guaranteed. In addition, this increase must be unforeseeable. <\/p>\n\n\n
There are two types of fixed-price contracts:<\/h3>\n\n
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The material cost adjustment clause<\/strong><\/h2>\n\n
Tips to remember:<\/strong><\/h2>\n\n