We signed a contract to build an extension at a fixed price. Halfway through, the builder stopped work and now says that costs have increased and that we must pay more or he will not come back. Can he do that?
Not without a valid basis under the contract. If you have a fixed-price contract, the builder cannot unilaterally increase the price unless the contract allows for variations or price adjustments for specific events. Under the Building Act 2004, residential building contracts over 30,000 dollars must be in writing and contain prescribed information, and implied warranties apply, including that the work will be completed with reasonable care and skill and in a reasonable time. Stopping work without a legal right may be a repudiatory breach. Check the contract's payment, variation and dispute provisions and communicate in writing, and record what has been done. The Construction Contracts Act 2002 gives the builder rights to make payment claims, so ensure that you respond properly to any payment claims. Get legal advice before withholding payment or terminating the contract.
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