HOME BUILDING CONTRACTS ACT 1991 - SECT 13

HOME BUILDING CONTRACTS ACT 1991 - SECT 13

13 .         Rise-and-fall clause prohibited

        (1)         A builder must not enter into a contract that contains a rise-and-fall clause.

        Penalty: $10 000.

        (2)         A rise-and-fall clause in a contract is void.

        (3)         In this section rise-and-fall clause means, subject to subsection (4), a provision under which a price stipulated for the performance of home building work may change to reflect changes in the costs of labour (including related overhead expenses) or materials, or both, to be incurred by the builder.

        (4)         A provision of a contract is not within the definition in subsection (3) by reason only that it allows a builder to increase the stipulated price to reflect further costs actually imposed on or incurred by the builder —

            (a)         as a direct consequence of a written law of the State or the Commonwealth; or

            (b)         on account of an increase in any tax, duty or other charge imposed under any such law after the date of the contract; or

            (c)         by reason of a delay in the commencement of home building work beyond 45 working days after the date of the contract being a delay —

                  (i)         that is caused solely by the failure of the owner to comply with a condition imposed on the owner by the contract, including a condition to the effect that the owner produce satisfactory evidence of the owner’s ability to pay the contract price or of the owner’s title to the land on which the work is to be performed; or

                  (ii)         that occurs without any failure on the part of either the owner or the builder to comply with his or her obligations under the contract.

        (5)         Where subsection (4)(c) applies the consequences to, and the rights and remedies of, the parties are as set out in clauses 4 and 5 of Schedule 1.