70BAlteration of prices fixed under certain contracts

70B Alteration of prices fixed under certain contracts

(1) Where: (a) a contract has been made for the erection of any building or for the performance of any other work, and, under the terms of the contract, the person undertaking the erection of the building or the performance of the work (hereinafter in this section called the contractor) contracts to supply the material to be used in connexion therewith; and (b) after the date of the contract an alteration has taken place in the law relating to sales tax, as the result of which the cost of supplying the material is increased or reduced; then, unless the contract contains express written provision to the contrary or it is clear from the terms of the contract that the alteration of the law has been taken into account in the contract price, the contract shall be altered as follows: (i) If the cost of supplying the material has been increased, the contractor may add to the contract price an amount equivalent to the additional amount payable by him for the material (other than material which remains the property of the contractor) as the result of the alteration of the law; (ii) If the cost of supplying the material has been reduced, the party liable to pay the contract price may require the contractor to deduct from that price an amount equivalent to the amount by which the cost of supplying the material (other than material which remains the property of the contractor) has been reduced as the result of the alteration of the law. (2) Where the contract price is altered in pursuance of this section, the contractor shall deliver to the party liable to pay the contract price a statement in writing showing the amount of the increase or reduction of that price, and containing prescribed particulars of the items affected by the alteration of the law.