The next price shock is coming. Is your contract ready?

The quote is not the finish line

A fixed price can feel safe until fuel, steel or timber jumps and the job is already signed. The real risk is not the first number you wrote down, but the terms that lock that number in. If the paperwork is loose, a rising market can turn a busy job into a thin one very quickly.

That is why the first review should happen before signature. Business.gov.au says a written quote becomes a binding contract once accepted, and it should clearly set out the work, payment terms, dates and quote expiry. If those basics are missing, the quote can do more harm than help.

Put a price review in the contract

For longer jobs, ask for a clear fee review clause before you sign. Business.gov.au says long term contracts can include a clause to review the fee if business costs increase. For a contractor, that means naming the pressure points up front, such as fuel, steel, timber or freight.

Keep the trigger simple and the process written. Business.gov.au also says contract changes are best put in writing and signed by both parties. Spell out what evidence is needed, who can request the change and how the revised price takes effect. That reduces arguments later because the process is already agreed.

Source: Official guidance

Shorten the time your quote stays open

A long quote window can leave you exposed to a market that has already moved on. If the start date is uncertain, shorten the expiry date so you are not carrying old pricing for an open ended period. Business.gov.au recommends including a quote expiry date, along with clear payment terms and work dates.

This matters most when a client wants you to hold the price while they decide. Treat that as a fresh commercial decision, not a favour. If the hold period is too long, you may be underwriting the customer’s delay while you absorb the cost rise. A shorter validity period keeps the risk where it belongs.

Track materials before they hurt your margin

You do not need a complicated system to stay on top of price movement. Keep a simple register of fuel, steel, timber and any other major inputs, with the date, supplier, rate and expiry. Business.gov.au says businesses should review prices regularly and whenever costs or market conditions change.

Use that register before every tender and again before signing. If the allowance is already stale, reprice the job, narrow the scope or walk away. That is not overcaution. It is how you stop a known increase from becoming a future dispute over who should wear it.

Review every contract before you sign

Before signature, compare the draft contract with the quote, the supplier assumptions and the variation process. Look for clauses that quietly change payment timing, remove your ability to review pricing, or shift extra cost risk back to you. If the documents do not match, fix them now while you still have leverage.

This week, pick one live tender and pressure test it against current input prices. Tighten the quote expiry, add a clear review clause and make sure any variation process is in writing. If you want help checking the file before you sign, contact CRP today about dispute resolution. CRP coordinates independent qualified professionals and can help you tighten the paperwork before the job starts. This is general information only, not legal or financial advice.