About to sign a Building Contract? Read this first.

Signing a building contract is a major milestone and often an exciting one. But it’s also the point where most of the financial risk in a project is locked in.

Even when working with a builder you trust or have a good relationship with, it’s critical to approach the contract stage carefully. Good relationships don’t replace clear documentation. - AND TRUST US - We have seen a lot of money hungry lying builders out there. So, here are some tips that we have seen and learnt along the way and hopefully it'll assist you.

Here’s what to watch out for before you sign.

1. Treat the Contract as a Legal Document - Not a Personal Agreement

It’s common to feel comfortable signing when you know the builder or have had positive interactions leading up to the contract.

However, once signed, the contract stands on its own.

When reviewing your contract:

• Read it as if you don’t know the builder

• Assume the document - not conversations - is what will be relied on

• Make sure everything discussed is clearly written into the contract

Verbal assurances are bs.... especially when money is involved.

2. Is the Contract Price Actually Final?

“Fixed price” can be misleading if the scope isn’t fully defined.

Before signing, confirm:

• Exactly what is included in the contract sum

• Whether any items are listed as provisional sums or allowances

• What circumstances allow the price to change

If pricing is still described as “to be confirmed” or “subject to site conditions,” those costs are not fixed.

3. Provisional Sums and Allowances

Provisional sums are one of the most common sources of unexpected cost increases.

Pay close attention to:

• The number of provisional items included

• How they are described

• Whether the allowance amounts are realistic

If large portions of work haven’t been properly scoped or priced, ask why - and consider whether additional information should be obtained before signing.

4. Variation Clauses Matter More Than You Think

Variation clauses control how changes are priced and approved during construction.

Before signing, ensure:

• Variations must be priced and approved in writing before work proceeds

• The method for calculating variation costs is clearly stated

• Builder margins and administration fees are disclosed

Contracts that allow variations to be issued after work is completed expose owners to significant financial risk.

5. Site Conditions Shouldn’t Be an Afterthought

Items such as:

• Earthworks and site levels

• Stormwater and drainage

• Flood constraints

• Access limitations

should be assessed and documented early.

If these items are left vague or deferred, they often become costly variations later in the project. Early engineering input can significantly reduce this risk.

6. What Happens If Information Changes?

Drawings and documentation sometimes evolve - but the contract should clearly state how this is handled.

Check:

• Who bears the cost if drawings are updated or clarified

• Whether redesigns are treated as variations

• How incomplete documentation is addressed

A contract that shifts all risk to the owner for missing or unclear information should be reviewed carefully.

7. Timeframes and Delays

Review the clauses relating to:

• Construction start and completion dates

• Extension of time provisions

• What qualifies as a delay beyond the builder’s control

Unclear or broad delay clauses can result in extended build times with limited recourse.

Final Thoughts

Most costly building disputes don’t start on site -they start at the contract stage.

Even if you trust your builder, the contract must be reviewed as if that trust didn’t exist. Once signed, the document - not conversations, not intentions, not relationships -is what governs cost, time, and responsibility.

If pricing isn’t finalised, if variation clauses are vague, or if site conditions haven’t been properly addressed, those gaps don’t disappear. They resurface later as variations, delays, and unexpected costs.

A building contract should protect both parties - but only if it’s complete, and realistic from the start.

Taking the time to get it right before signing is one of the most important decisions you’ll make in your build.