Contracts
What is a provisional sum in a building contract?
Short answer
A provisional sum is an estimated amount for a specific item in your contract where the exact final cost isn't known at signing - commonly used for site costs, landscaping, or council fees. You're invoiced for the actual cost at the end, so provisional sums can go up OR down. Watch for provisional sums that hide items which should be fixed.
The longer answer
Contracts also use "prime cost" items - a specified budget for a selection like a bathtub or oven. Difference: PC items are for items you choose from a supplier catalogue; provisional sums are for site-specific work whose extent is unknown.
Red flag: a builder using provisional sums for things they should be able to fix-price (like a driveway of known width, or standard connections). Always ask "why is this a PS not fixed?" and get the range they expect the actual to land in.
Building contracts can be full of hidden traps and confusing jargon. In this episode, we break down the five clauses that trip up most homeowners - covering prime costs, provisional sums, payment schedules, special conditions, build time frames and utility connections.
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