Given the fact that the contract price is the key element of the construction contract, the contracting entity and the contractor shall state the price in cash or determine clear criteria for its formation when this nominate contract is made. The specific nature of the construction contract enables the price set out in the contract to adapt to the executed works and market situation. Therefore, it is not necessarily the case that the contract price is already final. The performance of the construction contract might be affected by certain events related to the change of the type and quantity of works needed for the completion of the construction, as well as by the potential price change of the elements that the contract price was based on. These reasons dictate the inclusion of special clauses in the construction contract which define in advance the risks concerning the quantity and type of works. The code of obligations and special construction practices distinguish among “per unit of measure” clause, jointly agreed price and “turn-key” clause. However, in addition to comparable unit-price and lump-sum clauses, international rules also provide an explanation of cost-reimbursable clause. In the case of unpredictable rise or fall in market prices, legal provisions ensure weaker client the entitlement to change the contract price. In duly justified cases, the contracting entity may therefore request price reduction or even withdraw from the contract, whereas the contractor shall be entitled to price increase. Regardless of what has been stated, both parties may also decide that the construction contract includes a provision on the stability of the price set out in the contract even in the case of price increase of the elements on the market.
|
