The price is wrong?
27 August 2026
Perera v Bold Properties (Qld) Pty Ltd [2023] QDC 99
Through the construction industry’s profitless boom, builders leaned heavily on special conditions in building contracts to combat the impact of rising costs. A decision of the Queensland District Court has given them good reason to question whether those price increase clauses do the job.
Barlow KC DCJ found a special condition permitting a unilateral increase to a fixed price building contract to be void, on three separate bases.
Background
In August 2022, Mr and Mrs Perera entered into a new home contract with Bold Properties (Qld) Pty Ltd for a fixed sum of $645,370. They had earlier paid a non-refundable deposit to secure that price.
The build did not commence by the anticipated start date. The builder then advised that, because of increased materials costs, it intended to lift the contract price by roughly $51,000. It relied on special condition 7, which reserved to the builder a right, at its sole discretion, to increase the contract price to the builder’s current base price for that house type if commencement had not occurred by the anticipated start date.
The owners did not want out of the contract. They wanted their house built at the agreed price, and applied to the Court for a declaration that the special condition was void.
His Honour agreed, on every ground advanced.
1. Void for uncertainty
The special condition purported to allow the builder to change an essential term of the contract without reference to any criteria. There was nothing to fix or confine what the increased price would be. The effect of the clause was therefore uncertain, and the clause was void.
Short of implementing a properly drafted rise and fall mechanism tied to objective criteria, it is difficult to see how a builder avoids an uncertainty problem in a clause of this kind. A discretion exercisable at the builder’s sole election only makes it worse.
2. Non-compliance with the QBCC Act warning
Section 14(6) of Schedule 1B of the Queensland Building and Construction Commission Act 1991 (Qld) requires a domestic building contract to carry a warning on the first page of the contract schedule, briefly explaining the circumstances in which the contract price may change.
Special condition 7 was not captured by that warning. The failure was sufficient, on its own, to invalidate the special condition.
The reasoning does not stop at escalation clauses. Any clause capable of changing the contract price that is not picked up by a compliant first page warning is exposed to the same argument, which puts a great many standard form contracts in the frame.
3. Unfair term under the Australian Consumer Law
As a kicker, the special condition was also found to be an unfair term under the Australian Consumer Law. It was not reasonably necessary to protect the builder’s legitimate interests.
What this means
For builders, the message is that a price increase clause is not a safety net simply because it is in the contract. If the clause does not tie the increase to objective criteria, and if the front page warning does not properly account for it, the builder may be left holding a binding fixed price contract in a rising market. That is precisely where Bold Properties ended up.
For owners facing a mid-build price increase, the clause relied on is worth examining closely before the increase is paid or the contract is abandoned.
Either way, the fix is at the drafting stage, not at the point the increase is demanded.
If you are a builder, developer or homeowner dealing with a price escalation clause, a disputed variation or any other building contract issue, Clutch Legal can help. We also review standard form contracts and special conditions before they are used. Contact our solicitors on (07) 5370 8842 or via email at hello@clutchlegal.com.au