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Give notice of each rise when the clause says, not at the final account

If your fluctuations clause makes notice a condition of payment, a rise not notified in time may never be paid, however well you prove it later. A short written notice each time a price moves takes minutes and keeps the rise in the claim.

Updated: . By Jack Butler-Kettle, Construction Claims Consultant.

Why it matters

The JCT options that adjust for the cost of labour and materials need written notice of each qualifying rise within a reasonable time. That notice is a condition of payment. Main contractors know this. At the final account, their first question about a fluctuations claim is where the notices are. A rise notified at the time is usually argued only on the figures. A rise first raised at the final account can be refused whole, whatever the invoices show. The notice itself takes minutes: what moved, when and by how much, with the supplier's letter attached.

How to do it

  1. Write the fluctuations notice rule into the job diary when the subcontract is signed: who to, how, and within what time.
  2. Send a short written notice each time a qualifying price or wage rate changes. Name the item, the date of the change and the new price.
  3. Attach the supplier's increase letter or the wage agreement, and keep proof of when the notice was sent and received.
  4. Record each notice against the rise it covers, so the final account can show a notice for every rise.

Example

Illustrative example. The scenario and figures are invented.

The facts

A mechanical subcontractor's JCT subcontract carries the labour and materials fluctuations option, and copper pipe rises three times during the job.

What happens

  1. Each rise is notified to the main contractor's quantity surveyor within 2 weeks, with the supplier's letter attached.
  2. The notices are logged in the job diary against each rise.
  3. At the final account the main contractor checks the three notices against the invoices.

The outcome

The £17,800 copper adjustment is agreed in full. On a sister job, where the same rises were first raised at the final account, £12,000 was refused because no notice was given.

To have this set up for you, see our Price Rise Loss Prevention service.