Rise-and-Fall and Materials Costs

A companion guide explains what a rise-and-fall clause is. This guide focuses on how material cost movements in particular can flow through to the amount you pay.

Material increases can be passed on

Rise-and-fall clauses commonly allow the builder to pass on increases in the cost of materials between signing and construction. If steel, timber or other prices rise, you may pay the difference.

The clause may not be symmetrical

If prices fall, you may not automatically receive the benefit. Read whether the mechanism works both ways.

Look for triggers, formulas and caps

Understand what evidence of a cost increase is required, whether a formula or index applies, and whether there is any cap on the total adjustment.

Timing amplifies exposure

Long periods between signing and commencement increase the chance of material-cost movement. Delay before commencement can shift that risk to you.

Budget for the exposure

If part of the price genuinely remains variable, model that risk before signing rather than assuming costs will hold.

Questions to ask before signing

Can material cost increases be passed on to me?

What evidence is required? Is there a cap?

Does the clause work both ways if prices fall?

Does delay before commencement change the position?

The key lesson

A fixed price can still move with materials costs. Know precisely how material increases are calculated and whether any limit applies before you commit.

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.