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The Pennsylvania Code website reflects the Pennsylvania Code changes effective through 52 Pa.B. 7348 (November 26, 2022).

61 Pa. Code § 46.4. Fixed price construction contract.

§ 46.4. Fixed price construction contract.

 (a)  Definition. The term ‘‘fixed price construction contract,’’ when used in this section, shall mean any construction contract, either in written or paragraph form, containing a bid price which has been accepted, which bid price cannot be altered, modified or withdrawn by either of the parties to the contract, unless the context clearly indicates otherwise.

 (b)  Contracts which are not fixed price contracts. Contracts which are not fixed price contracts shall conform with the following:

   (1)  A contract containing provisions providing that the owner may, by written order, direct a contractor to perform certain additional work or services or make changes or alterations in the work or omit work or services, or providing that the contractor shall receive cost plus a fixed percentage for any additional or extra work, is not a fixed price contract.

   (2)  A construction contract containing a provision substantially similar to any one of the following is not deemed to be a fixed price construction contract:

   Example 1. If the manufacturer’s price to the Builder for the basic house and other materials is increased prior to delivery thereof to the Builder, the Builder may elect to add such increase to the total purchase price, in which event the Owner may accept such increase in writing or terminate this Agreement in writing within seven days after notification of the increase and be refunded the down payment.

   Example 2. This Agreement is conditioned upon the ability of the Seller to complete the above described premises at present prices for material existing at the date of this Agreement with respect to operative home building. If Seller at any time or for any reason is unable to complete the above described premises at present prices for material, or finds that his material costs for the premises or any part thereof still to be constructed will exceed the material costs prevailing at the date of this Agreement, the Seller is hereby given the option to cancel this contract upon written notice to the Buyer, in which event the full deposit money shall be returned to the Buyer without interest and this Agreement shall thereupon become cancelled and void, and the Seller shall have no further liability whatsoever to the Buyer. However, if the Seller is unable to complete the above described property at present prices for material, the Seller may proceed with said construction and give notice to the Buyer of the increase in the material costs, and if the Buyer, within five calendar days after such notice, shall agree in writing to pay such increased costs at or prior to settlement, this Agreement as so modified shall continue in full force and effect, otherwise this Agreement at the option of the Seller shall become cancelled and void.

   Example 3. All present and future taxes imposed by any federal, state or local authority which we may be required to pay or collect, upon or with reference to the sale, purchase, transportation, delivery, storage, use or consumption of the materials or services covered hereby, including taxes upon or measured by the receipts therefrom, shall be for your account.

   Example 4. All excise, privilege, occupational, sales, use and other taxes applicable to the purchase, sale or use of fencing covered by this proposal or applicable to or measured by the receipts of the contractor therefrom shall be in addition to the price quoted herein and shall be for the sole account of the purchaser.

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