Adapting to Inflation: Strategies for Protecting Your Construction Contracts 

Navigating Challenges in Construction Law 

Inflation continues to reshape the construction landscape in 2025. Escalating material costs, labor shortages, and ongoing supply chain issues are squeezing project budgets and straining contractor-owner relationships. 

For those still relying on traditional fixed-price contracts, these challenges can be financially devastating. Now more than ever, construction professionals must proactively adapt their agreements to manage inflation-related risks. 

Key Strategies to Safeguard Your Contracts

1. Price Escalation Clauses

Allow price adjustments based on defined cost indexes or thresholds. These clauses protect both parties when market prices spike unexpectedly.

2. Broadened Force Majeure & Change-in-Law Terms

Include provisions that cover extreme inflation or regulatory shifts affecting cost and timelines.

3. Shorter or Phased Contracts

Break long-term projects into manageable phases to allow for periodic price and scope adjustments. 

4. Cost-Plus or Target Price Agreements

Move away from rigid lump-sum contracts. These models share risk and give flexibility in volatile markets. 

5. Early Procurement & Storage Terms

Encourage early purchasing of volatile materials and allow contractors to invoice for stored items to lock in costs and reduce risk. 

Legal Best Practices 

• Use clear, customized contract language 

• Define risk allocation and escalation triggers precisely 

• Include effective dispute resolution mechanisms 

• Monitor market data and revise templates regularly 

Don’t Let Inflation Catch You Off Guard 

Inflation isn’t going away—and your contracts shouldn’t ignore it. Taking proactive legal steps now can save you from costly disputes and project disruptions down the road. 

 Need help reviewing or updating your contracts? 
Call us today at (817) 338-1700 or visit ftworthconstruction.lawyer to speak with an experienced Fort Worth construction attorney. 

Let’s protect your projects—before inflation eats into your bottom line.