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A construction contract checklist before signing

📐 Focus

By , construction economist

Information verified on 8 min read

What you will learn 18 questions in six groups: price and estimate, scope of the contract, changes, price during the contract, ending the contract and supervision, each with a reference to the article that explains it.

The Law of Obligations Act (võlaõigusseadus, VÕS) protects the tellija (the client) with several presumptions, but each presumption can be set aside by the contract. The checklist does not ask whether the contract is good, but whether it keeps the protection the Act gives the client by default and whether it closes the scope of the price. The questions are meant to be read alongside the contract, its annexes and the tender, because the sentence that affects the final cost is often precisely in an annex.

The list deals with contract terms. On the form of the tender and the price structure the client can require, there are separate three things to ask a tenderer for, and for checking the construction price itself, a construction cost checklist.

Price and estimate

  1. Does the contract contain a fixed fee, a binding eelarve (estimate) or a non-binding estimate, and who wrote that wording? If nothing has been agreed on whether the estimate is binding, it is presumed to be binding under VÕS § 639(1). See A binding or a non-binding estimate.

  2. Does any contract document contain a sentence that makes the estimate indicative? Look for expressions such as "indicative", "for information", "the price will be specified as work proceeds", "on the basis of actual quantities", including in the tender's covering letter and the notes to the price schedule.

  3. If the estimate is non-binding, does the contract describe how the töövõtja (the contractor) notifies a substantial overrun, and that work does not continue before the client's decision? The Act requires notification without delay (§ 639(2)) but does not set a form. See Substantial overrun of the estimate and the duty to notify.

  4. Is the contractor asking for a fee for preparing the quotation or the estimate? The Act presumes that it may not claim one (VÕS § 637(2)), unless otherwise agreed.

Scope of the contract

  1. On the basis of which design stage is the contract signed, and are the stage, version and date named in the contract? Regulation no 97 links the level of detail that allows a quotation to be prepared to the põhiprojekt (the main design) (§ 9(1)). See What the contract price covers and what it does not.

  2. Does the contract list all the contract documents, and is the tender among them together with its reservations? A document that is on the list is, as a rule, part of the contract together with its notes.

  3. Does the contract say which document prevails in the event of a conflict? Within the design, the order is given by § 6(2) of regulation no 97; between contract documents, the contract must give it. See When the drawings and the specification conflict.

  4. Are boundary works named either as included in the price or as excluded? Connections, external networks, external structures, demolition and opening up, temporary facilities, testing and as-built documentation.

Changes

  1. Who may order a change or additional work on the client's behalf, and is that authority named in the contract? If it is not, any instruction given on site may later become grounds for a dispute. See Additional work or changed work: why the difference matters.

  2. Does an agreement on additional work and changed work require written form, including a description, the price or the method of setting it, and the effect on the completion date? According to the Supreme Court's case-law review, without an agreement there is no contractual basis for a fee for additional work; this protection is effective only if agreements can be proved.

  3. By what deadline must the contractor submit the price of a change, and the client reply to it? A procedure without deadlines lets work start before the price is agreed.

  4. Where are change decisions recorded? The ehituspäevik (the construction diary), covered works certificates and the minutes of site meetings are construction documents under § 15(3) of the Building Code (ehitusseadustik). See Construction records as evidence: diary, certificates and minutes.

Price during the contract

  1. Does the contract contain a price indexation clause and, if so, does it name the index, the base date and the trigger threshold? Without such a clause, with a fixed fee or a binding estimate a price rise remains in principle the contractor's risk; the exception is a change of circumstances under the cumulative conditions of VÕS § 97. See Price rises during the contract: who bears the risk.

  2. Does the contract state that the contractor has assessed and assumed the risk? Under VÕS § 97(2), one condition for changing the contract is that the disadvantaged party did not bear the risk under the law or the contract; this sentence therefore affects any later claim to change the price.

Ending the contract

  1. Does the contract alter the client's right to terminate the contract at any time? VÕS § 655(1) gives the client this right, and the contractor may claim the agreed fee, less the savings and what it acquired or could have acquired by using its workforce otherwise. A notice period or a fixed termination fee may change that price. See The client's right to terminate at any time, and what it costs.

  2. Is the contractual penalty linked to the client's actual loss, and does it have a ceiling? A court may reduce an unreasonably high contractual penalty (VÕS § 162(1)), and an agreement to the contrary is void (subsection 2). See Contractual penalties and their limits.

  3. Does the contract contain a schedule of the client's own obligations: decisions, client supplies, access to the site? Delay by the client gives the contractor a right to compensation under VÕS § 652. See When the client causes delay: decisions, materials and access.

Supervision

  1. Has an omanikujärelevalve (owner's supervision) contract been signed, and does it also cover what the client needs to control the price? Under § 20(1) of the Building Code, the owner has a duty to ensure competent supervision, but the minimum content set by the procedure for owner's supervision does not include checking interim invoices or additional works. If the client wants this, it must be in the supervision contract. See Owner's supervision: what the law requires and what it does not.

How to use the list

Every "no" or "don't know" is either an amendment to the contract or a conscious risk. For some questions, one sentence is enough, for example confirming binding effect. Others, such as the change procedure or indexation, need a separate contract term. If the contractor does not accept a term, the client at least knows what risk it takes on by signing, and can allow for it in its contingency.

This article describes the legal rules as at the date of checking and is intended for professional orientation. It does not replace legal advice or a review of the specific case.

Frequently asked questions

Yes. The questions are based on the contract-for-work provisions of the Law of Obligations Act, which also apply where the client is a private individual; in a construction contract between a business and a consumer, there is in addition a presumption that a non-conformity which appears within 2 years already existed at handover (VÕS § 642(2^1)).

Partly. For a hankija (the contracting authority), the restrictions of the Public Procurement Act also apply, particularly on modifying a public contract, and price review must be provided for in the procurement documents.

In law it adds nothing new, but it prevents other contract documents from quietly changing the presumption. That makes it one of the cheapest amendments.

Usually the list of contract documents and their order: if these are missing, the scope of the price is left to interpretation. This affects questions 5 to 8 at the same time.

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