Under what circumstances can lump sum contract adjust the contract price?

In the process of project implementation, if the price changes, the adjustable unit price contract can be used to adjust the unit price. Adjustable unit price contract is also called variable lump sum contract. The contract price is based on drawings, regulations and specifications, and calculated at the current price, and the tentative contract price including all engineering tasks and contents is obtained. According to the pricing method of contracted projects, construction project contracts can be divided into fixed-price contracts, adjustable-price contracts and cost-plus-expense contracts.

The meaning of adjustable price contract: a contract in which both parties agree on the method of adjusting the contract price in the special terms. This is a relatively fixed price. During the execution of the contract, when the cost of labor and materials used increases due to inflation and other reasons, the total contract price can be adjusted accordingly according to the contract. Of course, the cost changes caused by engineering conditions such as design changes and engineering quantity changes can also be adjusted. Therefore, the risk of unforeseen factors such as inflation is borne by the owner. For the contractor, the risk is relatively small, but for the owner, it is not conducive to its investment control, and the risk of breaking through the investment increases. The contract unit price can be adjusted, which is generally stipulated in the project bidding documents. The unit price signed in the contract can be adjusted according to the terms agreed in the contract, such as the price change during the project implementation. When bidding or signing some projects, due to some uncertain factors, the unit prices of some sub-projects are tentatively set in the contract. When the project is settled, it will be adjusted according to the actual situation and the contract unit price agreed in the contract to determine the actual settlement unit price.

What is lump sum contract?

Lump sum contract, as an atypical contract, means that according to the construction contents and relevant conditions stipulated in the contract, the amount payable by the owner to the contractor is a specified amount, that is, a clear total price. Lump sum contract is also called lump sum contract, that is, according to the requirements and conditions of construction bidding, when the construction content and related conditions remain unchanged, the total price paid by the owner to the contractor remains unchanged.

To sum up, in the process of project implementation, when the price in lump sum contract changes, the contract price can be adjusted, and the unit price can be adjusted by using the adjustable unit price contract. It should be strictly implemented in accordance with relevant national laws and regulations.

Legal basis: Interpretation of People's Republic of China (PRC) and the Supreme People's Court on the Applicable Law in the Trial of Construction Contract Disputes Article 32 If the parties have disputes over the project cost, quality, repair costs and other specialized issues, and the people's court deems it necessary to make an appraisal, it shall explain to the party with the burden of proof. If a party fails to apply for appraisal after explanation, fails to pay appraisal fees or refuses to provide relevant materials, it shall bear the legal consequences of not providing evidence. If the party who bears the burden of proof in the proceedings of first instance fails to apply for appraisal, fails to pay the appraisal fee or refuses to provide relevant materials, if the people's court considers it necessary to apply for appraisal in the proceedings of second instance, it shall handle it in accordance with the provisions of Item 3, Paragraph 1, Article 170 of the Civil Procedure Law.