Additional works and changed works during the contract

An additional claim can arise from four different sources, and each has its own legal basis. The client's first step is not to check the amount but to ask which of the four situations is at issue, because that decides whether there is anything to pay at all.

In this branch, the word estimate (eelarve) means, in the sense of § 639 of the Law of Obligations Act (võlaõigusseadus, VÕS), the estimated cost of the work agreed in the contract for work (töövõtuleping), which is either binding or non-binding for the contractor (töövõtja). It is not the contractor's internal detailed budget discussed in the budgeting guide.

The Law of Obligations Act uses neither the term additional work nor the term changed work: both come from practice and case law. According to the Supreme Court (Riigikohus) case-law review "Töövõtuleping" ("Contract for work", 2022), additional works are works that fall outside the subject matter of the contract and require an agreement of the parties; without such an agreement, the contractor is not entitled to payment for them under the contract. Changed works stay within the subject matter of the contract but are carried out differently from what was agreed. Which is which is determined by interpreting the agreement of the parties.

This is why the outcome often depends on what is written in the contract and its annexes. The more precisely the contract describes what belongs to its subject matter, the easier it is later to say whether new work lies outside that subject matter or is a different way of executing it.

The Law of Obligations Act protects the client even when the contract says nothing. If the parties have not agreed that the estimate is non-binding, it is presumed to be binding (VÕS § 639(1)), and according to the Supreme Court case-law review, where the estimate is binding the contractor cannot claim payment above it (Supreme Court judgment of 19.12.2017 no 2-15-15662/55, para 12). For an overrun of a non-binding estimate, the contractor may claim extra payment only if the overrun is substantial and could not have been foreseen, and the contractor must give notice of it without delay; without notice, the excess can be claimed only to the extent that the client has been unjustly enriched (§ 639(2)).

The client often gives this protection away in its own contract. A sentence such as "the estimate is indicative" or "the price will be refined as the works proceed" reverses the presumption. Another common way of weakening the protection is to let works go ahead without a written agreement and to pay invoices without challenge, because the conduct of the parties is one of the circumstances taken into account when interpreting a contract (VÕS § 29(5)).

For every change, the client has to make three decisions, and they must be made before the work is done. A decision taken afterwards is already a dispute.

The first decision is classification: is the work requested or claimed additional work, changed work, or part of the subject matter of the contract that has already been paid for? The second is agreement: a description of the work, the price or the method for setting it, and the effect on the deadline. The third is evidence: the agreement must be in writing and easy to find, whether in a separate change order, in the minutes of a site meeting or in the construction works diary (ehitustööde päevik).

It is worth stating in the contract who may order a change on the client's behalf. If this is not written down, an oral instruction given on site may later become evidence that additional work was ordered. A clause stating that no additional work starts before a written agreement, except work needed to remove a hazard, is also useful.

Pricing and tracking changes belong to the budgeting guide. How to price a change using unit rates and the structure of the budget is described in the article on variations and additional works from a budgeting perspective. How to track costs throughout the works is described in the article on tracking costs during construction. This branch deals only with the right to claim, accept and refuse.

For a contracting authority (hankija), an agreement of the parties is not enough. Changes to a public contract are limited by the Public Procurement Act, which is covered in the public contract branch of this guide.

• The article additional work or changed work: why the difference matters explains how case law distinguishes the two concepts and how to classify a change in writing at the moment it is ordered.
• The article substantial overrun of the estimate and the duty to notify covers VÕS § 639(2) and (3): the three conditions under which the contractor may claim an overrun of a non-binding estimate, and the client's choice between accepting the overrun and terminating the contract.
• The article price rises during the contract: who bears the risk shows that the risk of price rises is set by the contract, not by an index, and that VÕS § 97 is a narrow exception.
• The article construction records as evidence: diary, certificates and minutes shows which decision must be recorded in which document and who signs it.