Fluctuations, and why they came back
For twenty years fluctuations clauses were something you skipped in the particulars. Two years of material price movement made them the first thing anyone checked.
QScope Team · 9 April 2026 · 5 min read
A fixed price contract is not a contract in which prices cannot change. It is a contract in which the contractor carries the risk that they will. The fluctuations provisions are where the parties decide whether that is actually what they want.
The three options
JCT offers a choice in the contract particulars, and the traditional labels are still in use:
- Option A - contribution, levy and tax changes only. The contractor carries market price movement; only statutory changes are recoverable.
- Option B - labour and materials cost fluctuations, recovered on a traditional basis with detailed records.
- Option C - formula adjustment, using published indices rather than actual costs.
Option A is by far the most commonly selected, which is why most contracts leave the contractor carrying price risk in full.
What happened
Through a long period of low inflation the choice barely mattered. Prices moved slowly, tender allowances absorbed the movement, and nobody read the clause.
When material prices moved sharply, contractors on Option A found they had priced work eighteen months earlier at rates that no longer bought anything. There is no general relief for that. Cost increase is not a relevant event, it is not a relevant matter, and it does not make performance impossible.
The routes people try
Three arguments come up, and all of them are weaker than they first look.
Frustration. Requires performance to become radically different from what was undertaken. Expensive is not radically different, and the bar is very high.
Variation valuation. Where a variation is instructed, the valuation rules allow a fair valuation where the character or conditions differ. That can pick up some price movement on varied work, but it does nothing for the original scope.
Loss and expense. Requires a relevant matter. Market prices are not one.
What actually works
Agreement, or pricing for it in the first place. Where a project is long and the market is volatile, Option C using published indices is often the cleaner answer: it removes the argument about actual cost, adjusts both ways, and costs far less to administer than Option B.
Where a contract is already signed on Option A, the honest position is that the risk was taken. Some employers will share it commercially to keep a contractor solvent, and that is a negotiation rather than an entitlement.
Recording it
Whatever is agreed, it belongs in the final account as its own line with its own basis, not folded into variations. Two years later, an adjustment nobody can explain is an adjustment somebody will challenge.
QScope carries fluctuations as a named adjustment line in the final account, so the amount and its basis stay visible rather than being buried in a variation.