Price escalation has a limit you can calculate

What to look at

• A base price list attached, dated
• A named public source for the revised rates
• A ceiling on the total escalation

How to check it yourself

If the agreement allows the price to move with material rates, it needs three things to be checkable: the base prices it moves from, a published source for the new rates, and a cap. Without all three, ask for a fixed price instead and accept a higher one - a number you can plan against is worth more than a lower one you cannot.

Where this comes from: Kolo review of Kerala construction quotations and agreements (established trade practice)

More construction agreement checks before you sign

• Agreement check passed
• Contractor background verified
• Site handover checklist agreed
• Worker-welfare rules applicability checked
• GST treatment understood before signing
• The payment schedule keeps money back until the end
• The agreement does not contradict itself
• GST is stated, and you know who pays it
• You know who you are contracting with
• Foundation extras cannot be open-ended
• Curing is the contractor's job, in writing
• The arbitrator is not chosen by the contractor alone
• There is a warranty, and it has a length
• Worker safety stays with the contractor
• Signing for a stage does not sign away everything after it
• There is a way to settle a dispute short of court
• Cancellation terms are not written by one side
• Nobody else builds your house without you knowing
• No blank spaces, no missing dates
• Money goes to the company, not to a person
• You can ask where the money went
• Delay has a consequence for both sides
• The quotation is attached to the agreement
• Force majeure is not a blanket excuse

The whole stage: Construction agreement checks before you sign