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Remuneration adjustment

Stein Frederick Janzon
sfj@byggogprosjektjus.no

In a long-term construction project, there will always be challenges or changes that the parties have not taken into account and which impose additional costs on the project. Which of the parties to a construction or construction contract has the risk of such additional costs is regulated in the standard contracts.

The short version

1. These are the same conditions that can give the subcontractor a claim for a remuneration adjustment as a claim for an extension of the deadline

2. In addition to remuneration for alterations, costs for additional work due to unforeseen ground conditions or other things that the total/general contractor has the risk of, the subcontractor may be entitled to remuneration for, for example, rigging/operation during extended construction time or additional costs due to disruption of other work (plunder and heft)

3. If the subcontractor requests a remuneration adjustment, this must be notified “without undue residence” so as not to lose the claim.

4. The Total/General Contractor must also notify “without undue delay” if he has objections to the subcontractor's claims

5. Normally, the parties should agree an amount for what the subcontractor is entitled to as a result of the relevant relationship.

6. If no agreement is reached, but there are applicable unit prices or unit prices which can be adjusted because the works are reasonably similar, then such prices shall be used.

7. If the parties do not agree on something, and unit prices are not suitable, the subcontractor is entitled to remuneration according to the principle of invoicing, see separate article on invoice works.

8. If the work is terminated and the subcontractor has to cancel a contract assistant with the consequence that the latter is entitled to compensation for cancellation, the total contractor is obliged to replace it.

9. If negative change orders are issued to such an extent that the net contract amount is reduced by 15% or more, the subcontractor is entitled to compensation for its profit loss from the total/general contractor for the entire reduction. If the total reduction is “only” 14.9%, the subcontractor is not entitled to compensation at all.

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