Prime Cost Items and Provisional Sums

Introduction

Prime Cost Items and Provisional Sums are common contractual allowances. Understanding how they operate is essential before signing.

Prime Cost Items

Usually allowances for supply items that have not yet been selected, such as fixtures and appliances.

Provisional Sums

Allowances for work where the exact scope or quantity is uncertain at contract signing.

Why They Matter

If actual costs exceed the allowances, the contract price may increase.

Reviewing Allowances

Ensure the allowances reflect the standard of finish you expect and ask how they were calculated.

Questions to Ask

Which items are allowances? Are the figures realistic? How will adjustments be calculated?

The key lesson

Prime Cost Items and Provisional Sums are allowances, not fixed prices. If the actual cost exceeds the allowance, you pay the difference - so whether the figures are realistic, and how any adjustment is calculated, depends on the wording of your own contract. If you are unsure how your allowances have been set, that is itself a reason to have the contract reviewed before you sign.

Before You Sign

This guide provides general educational information for South Australian homeowners. It is not personalised legal advice. The effect of any issue depends on the wording of your own contract, schedules, Special Conditions, plans, specifications and the facts of the project. A good builder and a well-understood contract should work together. Before committing to one of the largest financial transactions you may ever undertake, consider having the actual contract reviewed so you understand the obligations, notice requirements and consequences before they are tested on site.

Before You Build. One Signature. One Chance.