Judgment of the Supreme Court of May 23, 2025 (HR-2025-977-A)
The case concerns settlements after turnkey contracts. It raises particular questions about what constitutes an amendment worker under NS 8407 General contract provisions for turnkey contracts and what impact it has on the remuneration that the limit of the builder's right to impose modification works has been exceeded. The case also raises questions about whether documentation of the invoice claims is required for late interest to run, including whether the debtor (here; the builder) must object to the documentation if the documentation requirement is not met.
Briefly about the background of the case
In October 2016, the municipality of Oslo signed a turnkey contract with NCC Norge AS for the demolition of the old ice hockey hall at Jordal Amfi and the construction of Nye Jordal Amfi. The contract was worth $530 million. Construction start was January 2017 and closing deadline 1 September 2018.
A number of conditions caused delays. The parties agreed to a partial takeover for the building itself on 1 July 2020, while the remaining works were taken over on 11 September 2020.
The delays were caused, among other things, by unforeseen ground conditions.
In addition, there were also a number of modification works that could be reverted to change orders issued by the municipality and, on the other hand, irregular change orders as a consequence of the fact that the NCC felt obliged to carry out changes that the municipality itself considered to have entered into as part of the contract works.
Originally, the parties had also entered into two option agreements with a predetermined price for more detailed works.
In sum, the above circumstances meant that NCC considered itself unobliged to carry out part of the modification works because it considered the builder's modification competence to be exhausted. It follows from NS 8407 paragraph 31.1, third paragraph, that the builder may impose on the general contractor a maximum of additional works corresponding to 15% net addition to the contract sum. Nevertheless, NCC carried out the works with the view that it was entitled to deviate from the contract price level.
During the project, the municipality refused to pay some invoices on the grounds that there was no obligation to pay as long as the invoices were insufficiently documented.
The Borgarting Court of Appeal delivered its verdict on 23 April 2024.
The Court of Appeal then held that the limit of the builder's amendment competence under the 15 per cent rule in NS 8407 paragraph 31.1 had been exceeded. Modification works beyond this limit were honored with new awards based on the Purchase Act's principle of “gang price”. The Court of Appeal further reasoned that no late interest should be paid on the ongoing invoices that did not meet the documentation requirements of the contract. The final settlement, on the other hand, triggered the payment obligation from maturity.
The Municipality of Oslo appealed against the Court of Appeal's application in respect of the exceeding of the 15% limit, alternatively over the pricing of the “gang's price”. The municipality also appealed that the final settlement triggered payment obligations for the current invoices.
The NCC lodged an appeal against the Court of Appeal's censuring of the contractor's revised “gang price” prices for work beyond the 15 per cent limit, and that late interest on current invoices before the final invoice was not awarded.
The Supreme Court dealt with the case over three court days in early April 2025 and judgment was handed down on 23 May 2025.
Briefly about process costs and risks
In the Supreme Court, there was barely a majority for the final result. Out of a total of five judges, there were three who voted in favour, and two who voted against. The two who voted against essentially agreed with the decision of the Court of Appeal where there was unanimity among the three judges who decided the case there.
Taking into account that the construction started in January 2017, the writ filed in Oslo District Court in July 2020 and the final, enforceable judgment in May 2025, it goes without saying that the dispute is extremely resource-intensive.
The fact that the case was considered by a total of eight highly competent judges of the Court of Appeal and the Supreme Court together, with five judges voting for the outcome that was the Court of Appeal's conclusion, shows that procedural risk is something that should not be ignored.
For the record, we clarify that the crucial thing is, of course, that the three judges who voted for the final result constituted the majority of the Supreme Court.
This is an example that one should consider other ways of resolving conflict in terms of contract law, other than the courts. Out-of-court mediation could presumably be a far better solution -- overall.
Review of the most principled issues
What is included in the concept of change
When deciding whether the builder's amendment competence of 15% net addition to the contract amount has been reached, one must first determine the types of requirements that are included in the concept of change itself.
In this regard, the Supreme Court writes in Paragraph 48 that the central “is that it relates to injunctions that alter the performance of the general contractor compared to that originally agreed upon”.
Changes are governed primarily by NS 8407 paragraph 31.1, but changes may also be orders for temporal rescheduling, including continuations in accordance with NS 8407 paragraph 31.2, and irregular changes according to NS 8407 paragraph 32.
The Supreme Court also refers to other types of works such as “intervenes in the originally agreed upon”, cf section 56, namely NS 8407 paragraph 14.6, second paragraph which gives the builder the right to intervene in the contractor's right of choice under 14.6, first paragraph. If so, such an intervention should be handled as an amendment.
The same applies to special provisions dealing with changes in paragraph 15.2 (changes due to amended laws or regulatory requirements), paragraph 21.4, second paragraph (requirement that the general contractor must coordinate its progress in relation to other ancillary contractors to a greater extent than was reasonably foreseeable, cf. 21.4, first paragraph), paragraph 24.2.2 (the situation in which the builder's response to the general contractor's complaint of any defect or deviations in the design at the agreed risk transition are to be regarded as a change) and paragraph 26.3 (the situation in which government fees and charges change after that the general contractor made his offer and the additional cost must be paid by the general contractor).
On the other hand, additional work resulting from circumstances of which the builder has the risk, including unforeseen circumstances on the ground, is not covered, cf. Paragraph 23 (Section 50).
Several examples of matters which are not to be regarded as an amendment are dealt with before the Supreme Court summarises with the following in section 71:
“To summarize, the terminology in NS 8407 shows that the term “change” is reserved for the builder's injunction involving deviations from the services the contractor is required under the contract, including encroachment on the contractor's freedom of choice. Additional work resulting from circumstances of the risk incurred by the builder is not included in the term of amendment, with the exception of the special rule in the fourth paragraph of paragraph 31.1. Only the additional costs resulting from the change itself — the deviation from the contract — are to be taken into account in the calculation of whether the 15% threshold has been reached”.
For the record, it is mentioned that the fourth paragraph of NS 8407 paragraph 31.1 deals with the situation where there is a discrepancy with respect to the quantity statement of the contract which “substantially exceeding what the general contractor should have taken into account when concluding the contract”.
Are options covered by the term change?
The Supreme Court's opinion is options are not included in the concept of amendment, quite the contrary. The most central statement is made by section 74 of the judgment where it states that options must “are considered independent clauses of agreement within the contract unless there is concrete evidence that the parties intended otherwise”.
If the options were to have been included in the calculation of the 15% limit, NCC should have made reservations about this, or the parties should have agreed on such an arrangement separately.
What is the consequence of reaching 15%?
The Supreme Court deals with this question in paragraphs 82 — 88, and where the issue is stated in section 82.
“It follows from paragraph 31.1 that the general contractor is not obliged to carry out modification works of more than 15 percent net addition to the contract amount. At the same time, this means that the contractor can offer future modification works at new prices. If the parties do not agree, the contractor must choose whether to perform the work on the terms of the contract or suspend further modification works. The question is what should apply where the parties do not agree on price, but the amendment works nevertheless proceed”.
Thus, when the limit is reached, the Supreme Court establishes that the contractor is not obliged to carry out the works, and in section 83 the Supreme Court writes that then the contractor is also “released from the contract in so far as further modification works are concerned, unless otherwise is or must be deemed agreed”.
The Supreme Court then goes through various situations.
If the parties disagree whether the 15% limit has been reached and the contractor has a jumping obligation under NS 8407 paragraph 31.3 (change order given) or 35.3 (the builder has refused the contractor's notice of irregular change under paragraph 32.2) it is, according to the Supreme Court, “Difficult to enter into real negotiations on united terms”.
If the basis for rejection is disagreement as to whether or not the 15% threshold has been reached “each party must bear the risk of its own assumptions“(episode 85). Then the Supreme Court writes that does the builder have the right “it is the contract's remuneration rules that apply, but if the contractor is right, it is his revised prices that should be relied upon”.
Next, the Supreme Court discusses the situation where both parties agree that the 15% threshold has been reached, but the contractor performs the work.
As a starting point, the Supreme Court discussed two different situations.
In one situation, the builder has rejected the contractor's price offer and then the contractor has nevertheless carried out the works. Then the Supreme Court says that this situation must be considered as if the contractor has agreed to carry out the alteration works in accordance with the prices of the contract. In that case, he cannot subsequently claim paid in accordance with his offer of revised rates.
In the second situation, the contractor maintains that he is entitled to revised prices, and performs the works on those terms. In that case, the question of remuneration - in its utmost consequence - must find its solution in the courts. This is stated in section 88.
However, the Supreme Court is quite clear that the remuneration cannot be determined in accordance with what is “gang's price” This is how the Court of Appeal ruled.
About Delay Interest Rates
The Supreme Court deals with this question in sections 89 — 101.
Initially, the Supreme Court discusses what it takes for a claim to be overdue as it is only after maturity that you can claim interest on delay.
Next, the Supreme Court reviews the rules of NS 8407 paragraphs 27 and 28.1. It is stated in the first paragraph of 28.1 that the builder is obliged to pay 28 days “after he has received the invoice in accordance with paragraph 27”.
In paragraph 27.4 there are rules on the documentation of the invoice claim, and about these the Supreme Court writes in section 95:
“To the extent that the contractor defaults on the specification and documentation requirement, the invoice for the records in question is initially not due and the builder may withhold payment. (...) The consequence is that late interest does not run until the documentation requirement is met, possibly from the due date of the final invoice or at the fulfillment deadline for enforceable judgment, see HR-2022-1980-A section 60 and 70”.
From this starting point, the Supreme Court modifies the rule in sections 96 and 97.
According to the Supreme Court (section 96) it must “The content of the documentation requirement must be adapted to the nature of the claims being invoiced and, moreover, seen in the light of the parties' billing practices. The fact that it is not possible to fully document the claim does not mean that documentation can be completely dispensed with”.
At the same time, the Supreme Court refers to the HAB judgment, which dealt with documentation of plunder and heft, where the Supreme Court wrote, inter alia, that the evidence requirements “cannot be set so high that in practice it becomes impossible or unduly burdensome” for the contractor to comply with them”.
Secondly, the Supreme Court writes in section 97 that the rule reproduced from the HAB judgment must also “apply the documentation requirement under paragraph 27.4. Records that cannot be documented may, to some extent, depend on a judgment, which may be substantiated by other means. Furthermore, the documentation requirement must be seen in the light of the purpose of the control, which a part of the way will be able to be taken care of through ongoing contact between the parties”.
The Supreme Court also states that the documentation requirement must “be limited to documentation that both parties have access to, such as change requests and change orders, meeting minutes, and the like” (Section 100).
In addition, the Supreme Court writes that the builder's right of objection may “be lost by inaction”.
In this regard, the Supreme Court referred to the rule in NS 8407 paragraph 30.3.2 on bill works where it is stated that the builder has a deadline for raising objections to the contractor's duties. If the deadline is not met,”the contractor's duties are laid at the basis of the settlement”.
Under the heading “The Objection Question” The Supreme Court then dealt with the question of whether the municipality of Oslo had done enough to safeguard its right to raise objections by not paying, but without raising objections to the NCC.
After a longer deliberation starting from section 102, the Supreme Court summarised with the following in section 114:
“To summarize, the contractor's failure to specify and document the invoices may entitle the builder to withhold the amount with the consequence that the delay rate does not run. However, this assumes that the builder makes reasonable efforts to bring the relationship in order, normally by advancing objections to the invoice by the end of the payment deadline. What can reasonably be required depends to a certain extent on a concrete assessment, which also looks at whether the invoice is clearly undocumented”.
Accordingly, the builder must submit a certain minimum of objections to the invoice before maturity in order for the right of objection to be considered to be retained. It is not sufficient to withhold payment only, but without giving a certain justification. This follows - if nothing else - for reasons of loyalty to the contractor who thereby receives an invitation to document his claim better.
