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New York Construction Law Blog

How to handle a change in material costs

Posted by Karl Silverberg | Apr 08, 2024 | 0 Comments

As a contractor, you typically consider the cost of materials when charging a client to make a profit from a project. However, the price of the materials you need can increase before the project ends, which can lead to disputes between you and the project owner.

So, how can you avoid such disputes?

Discuss it in your contract

You can avoid disputes related to a change in material costs from the word go by including provisions in your agreement. With an economic price adjustment clause, you can state the steps to be taken if material costs increase and who will be responsible for the extra expenses.

The uncertainty of future costs is a contributing factor to many disputes in the construction industry, especially in longer-duration projects. While you cannot avoid it, you can prevent its risks.

Consider prefabricated construction 

Manufacturing and assembling building components usually generates waste, which translates to a loss of money. Thus, if you are experiencing a rising cost of materials, consider prefabricated construction

This way, you receive goods manufactured off-site; all you have to do is assemble them. You will only pay for the materials used to make the components – you don't need to pay for excessive materials that may end up in a dumpster.

Embrace technology

Technology can substantially benefit contractors. With different platforms, you can closely monitor inventory, schedule supplies, stay updated with market conditions and communicate with everyone involved in the project.  

Some platforms can even allow you to estimate how much materials you need to complete a project and so on. Therefore, technology can considerably benefit your project, whether or not material costs increase.

If you are in dispute with your client regarding a change in material costs, learn more about your case to determine the best way forward.   

About the Author

Karl Silverberg

Karl Silverberg Contact Me: (631) 778-6077 Email me Practice Areas: Construction Law Biography Prior to law school, Mr. Silverberg worked as a professional engineer, and has eight years of experience working as a structural engineer on public sector transportation projects. Mr. Silver...


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