7Meaning of provisional sum

7 Meaning of provisional sum

(1)  In this Act, a provisional sum, in relation to a residential building work contract, is an amount that is an estimate, of the cost of performing a part of the residential building work to be performed under the contract (including the cost of supplying any materials needed for the residential building work), that is made by the building contractor.

(2)  Without limiting the generality of subsection (1) , a building contractor may estimate an amount under that subsection in relation to residential building work on the basis of –

(a) written advice, in relation to the work, provided by the designer or the owner; or

(b) an amount, in relation to all or part of the work, that is specified in a schedule to a design, or to a tender, that relates to the work.

(3)  However, subsection (1) only applies to a part of residential building work to which the relevant residential building work contract relates if the building contractor, after making all reasonable enquiries, cannot state a definite amount in relation to the part of the contract work when the contract is entered into.