Contractor relationship regulation within the scope of the legislation is quite wide and inclusive, hence the majority of subjects of civil legal relations have been or will be involved in contractor relations during their activities. Among contractor relations, in turn, the vast majority are construction contracting relations. Within the framework of this article, we will analyze one of the main features of the contractor agreement – the price of works, the importance of mastering the nuances of which cannot be overestimated.
The contractor agreement specifies the price of the work to be performed or the methods of determining it. In the absence of such indications in the agreement, the price is determined by the amount that would normally be charged for similar work under comparable circumstances.
The main feature of the contractor agreement is that the price of the work can be both fixed and approximate, and in the absence of instructions on this, the price of the work is considered fixed.
The separation of price into fixed and approximate has important practical significance. In particular, before signing the agreement and starting the works, as a rule, it is not possible to foresee the full extent of the works to be performed and/or the expenses necessary for them. If the price of the works is specified in the agreement as approximate, the contractor may request the customer to revise the price specified in the agreement if additional work is necessary. If the customer does not agree with the price increase, he can withdraw from the agreement.
However, if the price of the work is fixed in the agreement, then the parties cannot make a request to increase or decrease the price to each other, even if at the time of signing the agreement, it was impossible to foresee the full extent of the work to be performed or the expenses necessary for them. In this case, the party cannot unilaterally modify or terminate the agreement without the consent of the other party. As a result, there can be adverse consequences for both parties, but the consequences can be particularly severe for the contractor, who will have to work with less profit than anticipated. It should be noted that the mentioned adverse consequence is perhaps the best solution for the contractor in this situation.
The next feature is that, regardless of whether the price of the agreement is fixed or approximate, in the event of a significant increase in the cost of materials and equipment provided by the contractor, as well as services provided to him by third parties, which could not be foreseen when concluding the agreement, the contractor has the right to demand an increase in the specified price.
Thus, the contractor agreement is essentially distinguished from other civil agreements by its special regulations regarding the price of work. In the framework of this article, we have presented the fundamental features, which, if not taken into account, can lead to significant economic losses for each party.