SECOND PRIZE SCL(NZ) 2023 Essay Competition winner: Inflation in the construction industry: is a cost fluctuation clause the right solution?

The construction industry is highly susceptible to inflation - especially when the price of building materials and labour spiral out of control. This can lead to unwanted outcomes such as cost-overruns or an outward cancellation of projects. Given the current inflationary market conditions, it is important to understand how construction contracts handle the risk of inflation/price escalation. The essay highlights common issues that arise from the use of cost fluctuation clauses and explores various contract pricing models for alternative solutions.

Oscar Ji
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