Contracting work

Contracting work

The contract for services

Under Dutch law ‘contracting work’ is “when there is an agreement in which one party, the contractor, undertakes towards the other party, the client, outside an employment relationship, to create and deliver a tangible work, against a price in cash to be paid by the client”.

Client and contractor

The articles on contracting work arrange for the relationship between the client and the contractor. These articles therefore also apply to the relationship between the main contractor (client) and the subcontractor. Some articles are directory law, which means these can be deviated from in an agreement between the client and the contractor. The construction lawyer of AMS Attorneys can advise you on this when drawing up an agreement. Deviation is not (always) legally possible when there are mandatory legal stipulations. Examples of mandatory legal stipulations are those stipulations on contracting the construction of a house by instruction of a natural entity that is not acting in the execution of a profession or business. These stipulations are in the second section of Title 12 and contain stipulations to protect consumers, that cannot be deviated from.

Setoffs contract variations

Additional work usually means: performance by a contractor in addition to his obligation to execute and complete the agreed and described work, in such a manner that the contractor is entitled, for the execution of this (additional) performance, to additional payment relative to the agreed contract price. In contrast, less work means a performance not executed that had been agreed between the parties and is included in the contract price. The stipulations on additional work are contained in the legal stipulations in article 7:755 of the Civil Code of The Netherlands. To be entitled to claim compensation for additional work, the contractor has to have informed the client in a timely manner of the necessity of a price increase for the change desired by the client. This obligation to warn of an impending price increase does not apply if the client should himself had understood the necessity of a price increase. The reasoning underlying this stipulation is that this enables the client to take a well-considered decision on the execution of additional work. This is a mandatory legal stipulation, so this cannot be deviated from to the detriment of the client.

Provisional sum

If the parties have chosen to contract based on a fixed contract price, this does not mean that this contract price applies to all items. A so-called provisional sum can be included for certain expenditures. Including a provisional sum divides the risk between the parties and payment is settled based on costs actually incurred (to be increased with a possible surcharge – usually 10 percent – for the contractor). Depending on the final settlement, the provisional sum is exceeded or not. The provisional sum included by the contractor has to be a realistic estimate of the costs to be incurred for the part of the work to be implemented. The client has to be able to rely on this. The contractor is also expected to warn the client in time if the provisional sum is to be exceeded. This applies to a substantial excess linked to the permissible excess if a target price has been submitted, i.e. 10% (article 7:752 paragraph 2 Civil Code of The Netherlands).

Construction lawyer in The Netherlands

In all cases, whether this concerns a contract for services, contract variations, a provisional sum or a cost-plus contract, the construction lawyer of AMS Attorneys in Amsterdam focuses not only on advice, but also litigates for his clients if necessary. Our lawyers are very experienced in advising and litigating in the area of Dutch property law, including construction arbitration. They have gained a broad experience in advising and litigating for (international) companies and individuals. The attorneys are highly involved with their client’s interests and offer a sharp and transparent fee structure. Should you require more information on construction law in The Netherlands, or should you have any question with respect to litigation in The Netherlands, please feel free to contact one of the lawyers at our Dutch law firm in Amsterdam.