The client is changing the scope of work during the project's execution.

Three situations referred to as additional work in practice

The term 'additional work' is used for three different things on a single project, and each has a different regime. The first is a change in the scope of work: the client states during the project that they want something different or something extra compared to the original design. The second is work without which the project cannot be completed, although no one foresaw it at the beginning. The third is a situation where the scope of work does not change at all, but it turns out to cost more than the contractor had calculated.

The difference is not academic, as it determines who pays for the change. A change in the scope of work is a new agreement between the parties, and the price depends on what they agree upon. For work necessary for completion, it depends on the price regime that was agreed. For a different level of difficulty for the same work, the contractor under a fixed price or binding budget regime is not entitled to anything, even if they spend double the anticipated costs.

In a dispute, the issue is almost never whether the work was necessary, but whether it was approved. Courts base their decisions on what the parties themselves set out in the contract and how they actually proceeded during construction. An expert opinion stating that the work was meaningful and carried out at a customary price will not in itself establish a claim. The decisive factor is the documentation that was created at the time the change was being decided.

The same applies to the client in reverse. A company that verbally says "do it differently" at a site meeting and has it recorded may find itself in a situation where it must pay for the work, because the action is assessed according to its content as an addendum, even if it was not named as such. The formal designation of a document is not decisive; what is decisive is what is agreed within it and who signed it.

The price regime is more decisive than anything else

The Czech Civil Code recognizes three price regimes for a contract for work, and each provides a different scope for additional payment. You can tell which one has been agreed from the price clause of the contract and how the budget is incorporated into it. This question is addressed first because it predetermines whether it makes sense to negotiate an additional payment at all, and whether it is more advantageous for the contractor to assert a claim under the law or to insist on concluding an addendum to change the scope.

A price agreed as a fixed amount or by reference to a budget that is part of the contract or was communicated to the client before its conclusion is final in that neither the client nor the contractor can demand a change in price because the work required different effort or different costs than anticipated (Section 2620(1)).

A fixed price therefore finalizes the costs of the originally agreed scope, but not the answer to who will pay for newly commissioned work. If the client expands the subject of the work during its execution, it is not the same work at different costs, but a change in the scope of the obligation. The decisive factor then is whether the parties validly agreed on this change and its price, not that the original price was designated as fixed. This distinction is the most common source of incorrect expectations on both sides in disputes over additional work.

A price determined according to a budget subject to a reservation has a different impact and has two separate branches. For a budget with a reservation of non-guaranteed completeness, the contractor may demand a price increase if the need for activities not included in the budget arises, provided they were not foreseeable at the time the contract was concluded; for a budget with a reservation of non-bindingness, they may demand the amount by which the purposefully incurred costs unavoidably exceed the costs included in the budget (Section 2622).

Both branches have the same strict deadline, which is where most claims fail. The right to have the price increase determined expires if the contractor does not announce the necessity of exceeding the budgeted amount and the amount of the required price increase without undue delay after its inevitability became apparent during the performance of the work. The notification therefore cannot be postponed until the end of a stage or the final billing; it must be sent the moment the need is clear, and with a quantified amount. The client, on the other hand, may withdraw from the contract without undue delay if the contractor requests an increase of more than ten percent of the budget price.

The third regime is a price determined by an estimate under Section 2612 of the Civil Code. If, after concluding the contract, the contractor discovers that the price will need to be substantially exceeded, they must notify the client without undue delay with a justified determination of the new price; if they fail to do so, they have no right to payment for the difference. If the client does not withdraw from the contract without undue delay after receiving the notification, it is deemed that they agree to the increase. Here, the client's silence works in the contractor's favor, unlike in the two previous regimes.

A separate branch is a completely extraordinary, unforeseeable circumstance that substantially complicates the completion of the work. A court may then, at its discretion, decide on a fair increase in the price for the work, or on the cancellation of the contract and how the parties will settle matters; however, this does not apply if one of the parties has assumed the risk of a change in circumstances. It is precisely this exclusion that is routinely included in contracts for work, and the lawyers at our Prague-based ARROWS law firm assess what it specifically excludes for each contract separately before signing.

What you must have in hand before you start additional work

The change management process has four steps, and each has its own output that will stand up in a dispute. The first is a written request for a change with a description of what is being changed from the project design and an indication of who is requesting the change. The second is the contractor's pricing, including the impact on the deadline. The third is the client's approval in the form prescribed by the contract. The fourth is an addendum or a change order, depending on what the contract requires.

The key question is who is authorized to approve the change on behalf of the client, and in what form. The content of a legal act can be changed by a manifestation of will in the same or a stricter form; if this form is required only by the parties' agreement, the content can be changed in another way, unless the parties' agreement excludes it (Section 564). The technical supervisor and the site manager are generally not authorized to change the price of the work, even if they manage its execution.

The name and scope of authority of the person who signs off on changes belong in the contract and in every change order. Without this, the approval can be challenged in a dispute with a single sentence, and the dispute will shift from the question of what was agreed to the question of with whom. The practical minimum that works even for quick changes on site is a one-page change order with a number, date, description of the change, price, impact on the deadline, and two signatures of authorized persons.

Failure to comply with the contractually agreed form does not mean that the change does not legally exist. If the form agreed by the parties is not observed, invalidity can be claimed only if performance has not yet been rendered (Section 582(2)). It is therefore safe to always adhere to the form; however, in a dispute over work already performed, the content of the actual agreement between the parties and their subsequent conduct is decisive, in addition to the text of the contract.

Electronic communication is not excluded in itself, but it carries an evidentiary risk. According to Section 562(1) of the Civil Code, written form is also preserved in an act made by electronic means that allow its content to be captured and the acting person to be identified, with the signature of the acting person being required for validity. It is precisely the identification of the person and the signature that are often weak points in ordinary email exchanges, which is why specific addresses and persons whose emails the parties recognize as a change document are defined in the contract.

The deadline does not extend automatically with a change in scope

A deadline extension is the other half of every change in scope, and it is often forgotten in practice. An approved change order that is silent on the deadline does not in itself postpone the original completion date; the contractor has delivered extra work while remaining bound by the original deadline. The contractual penalty for delay is then calculated from this date, and the additional payment for the extra work may not even come close to covering it.

The law grants an explicit extension of the deadline only in narrowly defined situations. If the contractor points out the unsuitability of an item handed over by the client or their instruction and suspends performance to the necessary extent, the deadline set for completion is extended by the period caused by the suspension, and the contractor is entitled to reimbursement of the costs associated with the suspension (Section 2594).

Outside of these cases, a deadline extension is primarily a matter of agreement between the parties, but it is not the only way. A contractor will not be in default where their performance is prevented by the client's delay or lack of cooperation, which they have pointed out in a timely and demonstrable manner. However, relying on this is risky because the burden of proof lies with the one defending against the claim of delay. It is therefore cheaper for a company's management to address the deadline in the change order itself rather than inferring it later.

Notification of an unsuitable instruction must be given without undue delay, otherwise it loses both of its functions. If the client insists on carrying out the work according to the given instruction, the contractor has the right to demand that the client do so in writing; a separate chapter is the suspension of work due to non-payment or lack of cooperation, which is discussed in the text on the suspension of work and postponement of the completion date.

For each project, what counts as the period caused by the suspension and when it starts to run is different. On a construction site with a technological pause, the difference between fifteen days and six weeks is a matter of one sentence in the change order, which is why the lawyers at our Prague-based ARROWS law firm assess this link for each change separately and formulate it directly into the document that the parties sign.

How companies that get their additional work approved set up their change management

Companies that do not have disputes over additional work have a named person, form, and deadline in their contract. The person authorized to approve the change is specified by name and function, the form is written or explicitly electronic from designated addresses, and the deadline for the client's response is fixed, typically five to ten working days, with a clear consequence in case the client does not respond.

The second element is pricing according to a pre-agreed key. Unit prices from the bid, a standardized price list, or a cost-plus formula remove what most often blocks negotiations. Without this, the parties argue after completion about the price of work whose performance no one disputes, and the substantive dispute moves to experts and years of proceedings.

A warning sign is any wording that allows for changes but keeps the price fixed. A provision such as "the contractor shall perform all additional work at the client's instruction" combined with a fixed price and an exclusion of change of circumstances means that the contractor bears the risk of the scope without being able to reflect it in the price. A general declaration that the contractor assumes the risk of a change in circumstances has the same effect.

Price linkage to inputs is often confused with additional work. An increase in material prices or a rise in labor costs is not a change in the scope of work and does not justify an additional payment under a fixed price regime; it is addressed by its own contractual instrument, which is discussed in the text on inflation clauses in contracts for work. Including these items in change orders also weakens claims that are otherwise legitimate.

The final element is the link between the approved change and the payment schedule. Additional work approved halfway through the project may, according to the contract, be subject to final billing and retention money, even if it is not related to the quality of the original work; how retention money works is discussed in the text on retention money in contracts for work. Therefore, a sentence about invoicing also belongs in the change order.

How FIDIC models address this

The FIDIC model conditions are not a legal regulation, but a contract template that the parties adapt. They have their own formalized procedure for changes to the work and subsequent claims: the specific regime varies depending on the edition, book, and particular conditions used, so for some changes, the change is directly instructed by the employer or the engineer, while elsewhere it is preceded by a proposal and valuation from the contractor. This information is based on the FIDIC model documentation, not on Czech legal regulations.

In Czech contracts, FIDIC models are used in an adapted form, and it is precisely these adaptations that are decisive. Separate rules usually govern the valuation of the change, the extension of the time for completion, and the notification of other claims within a time limit from the moment the contractor became aware of the relevant event. A contractor who adopts the model without checking the time limits and the scope of the engineer's authority takes on a procedural regime in which a claim can be lost on a formal basis without being substantively disputed.

Mistakes that decide a dispute before a lawsuit is filed

The most expensive mistake is to perform work on a verbal instruction and sort out the paperwork later. In such a situation, the contractor usually does not have a dispute about having performed the work, but about the lack of an agreement on the price in the agreed form and often also a lack of proof of with whom the change was actually agreed. Both of these are created at the moment of the change, not after the work is handed over.

In a case where the contract provided for changes in scope at the client's instruction, but conditioned a price change on a written addendum, the conclusion that the work performed was a fulfillment of a contractual obligation and not unjust enrichment of the client was upheld; therefore, no claim for a price other than the one originally agreed arose, because no addendum was concluded (23 Cdo 2062/2021).

In the same case, the assertion of dishonest conduct by the client, who allegedly promised to conclude an addendum, also failed. The courts based their decision on the fact that such a promise must come from a person authorized to act contractually on behalf of the client and at the time the need for the work arose; a sound recording made several months after the work was handed over was not sufficient proof. The presence of groundwater in the excavation was then not assessed as an extraordinary unforeseeable circumstance, because it had been anticipated in advance.

However, this does not mean that missing paperwork always closes off a claim. The Supreme Court has inferred that a contract concluded in writing with a reservation for changes in written form can also be changed in another form, if the relative invalidity of such an act is not claimed in time (26 Cdo 1230/2022). The dispute is therefore about the content of the actual agreement and the authority of the acting persons, not just about the existence of a document.

The third mistake is mixing claims into a single bill. Additional work, increased input costs, compensation for downtime, and a price discount are all put into one invoice, and the other party then challenges the whole thing as indeterminate. Each of these claims has a different legal basis, a different deadline, and different evidence; they are asserted separately, and they must also be documented in this breakdown during the course of the construction.

What is extraordinary and unforeseeable for a specific project is assessed according to what the parties knew or should have known at the time of signing. For reconstructions and earthworks, this threshold is different than for the supply of technology on a greenfield site, which is why the lawyers at our Prague-based ARROWS law firm evaluate it from the project documentation and from the surveys that the contractor had available at the time of the bid.

Where disputes over changes in scope are most often lost

The following overview summarizes situations that are repeated in contracts regardless of the industry, and what can be done about them. The left column describes the moment the dispute arises, the right column the service we provide in response. The overview is applicable to both contractors and clients, as both parties make mistakes at the same points.

Final summary

Additional work is not decided by its usefulness, but by whether the parties have agreed on the change in scope and its price. A fixed price finalizes the costs of the originally agreed scope, a budget with a reservation opens the door for additional payment but ties it to immediate notification with a quantified amount, and a price determined by an estimate works in the contractor's favor if the client remains silent after notification. Meanwhile, the deadline does not extend by itself.

For a company's management, this leads to a single decision: whether the change management will run as a process with a responsible person, form, and deadline, or as improvisation at site meetings. The delay will only become apparent at the final billing, when nothing that was not created at the time of the change can be documented, and the dispute then rests not on the law, but on one party's lack of evidence.

The lawyers at our Prague-based ARROWS law firm set up change management procedures in contracts for work and review them for both contractors and clients. We prepare change orders and notification templates, assess disputed documentation for additional work already performed, negotiate a settlement with the counterparty, and represent you in a court dispute over additional payment for the work or a contractual penalty for delay.

Are you dealing with a change in scope on an ongoing project, or a dispute over additional work that has been performed and not paid for? Write to us at consultation@arws.cz and have your contract, change orders, and construction log ready; from these, your position can be evaluated in a single meeting. Our practice in the construction industry is covered in the Development and Construction Law section.