Legal Q&A · Construction & Development

Can a contractor charge more than the budget for additional works?

Law as at 21 July 2026

Answered by , Czech and Slovak attorney, admitted to the Slovak and Czech Bars (SAK 300422 · ČAK 19654).

Short answer

It depends on how the price is agreed. If it is fixed or set by a budget, more demanding work does not itself change the price. If the contract states that the budget does not guarantee completeness, the contractor may seek a reasonable increase for unforeseeable activities, but must notify them without undue delay or lose the claim. An increase exceeding 10 % allows the employer to withdraw from the contract.

Is a budget-based price binding?

Under § 547 of the Commercial Code, the price is not affected by having been determined on the basis of a budget (paragraph 1): a budget alone does not mean the price may change. What matters is how the contract characterises the budget:

  • if the budget does not guarantee completeness, the contractor may seek a reasonable increase where performance reveals a need for activities omitted from the budget that were not foreseeable when the contract was concluded (paragraph 2),
  • if the budget is non-binding, the contractor may seek an increase by the amount by which its efficiently incurred costs necessarily exceed those included in the budget (paragraph 3),
  • if the employer disagrees with the increase, the court determines its amount on the contractor’s application (paragraph 4).

When does the contractor lose its claim for additional works?

The contractor loses its entitlement to a price increase if it fails to notify without undue delay the need to exceed the budget and the amount of the increase sought after the need for the overrun becomes apparent (§ 547(6)). The employer should also take care: if the contractor seeks an increase exceeding 10 % of the budgeted price, the employer may withdraw from the contract without undue delay and pay only the portion corresponding to the work performed (paragraph 5).

What if the scope of the works changes?

If, after concluding the contract, the parties agree to extend, reduce or alter the works without agreeing the effect on price, the price increases or decreases reasonably according to the difference in the scope of activities and efficiently incurred costs (§ 549). Additional works should therefore always be approved by a written amendment.

Practical recommendation

We recommend stating clearly whether the price is fixed or budget-based and adding a clause governing approval of additional works and changes. We prepare contracts through legal services for construction companies and construction contracts; for larger projects, we also connect these arrangements with development project finance.

This answer provides general information on the law as at 21 July 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.

More legal questions

All questions and answers
  1. The bank requires a building under construction to be registered. How does this work? A building under construction is recorded in connection with the creation, change or termination of a right to it, typically for bank security or a transfer. Under § 46(3), the expert report must clearly establish the structural and functional layout of the first above-ground storey. The relevant permitting document under the new or transitional building-law regime must also be submitted. The building’s initial entry must be distinguished from constitutive registration of a contractual mortgage; waiting for occupancy approval is not itself a prerequisite.
  2. The municipality assigned a building number to a shelter. Does that mean the Land Register will record it? No. Municipalities assign building numbers under their own rules, while the Land Register records buildings under the Cadastral Act; the categories do not coincide. It records buildings attached to the ground by solid foundations, with or without a building number; buildings under construction in connection with the creation, change or termination of rights; and underground structures where they intersect the ground surface. If eligibility is disputed, the Slovak Geodesy, Cartography and Cadastre Authority decides.
  3. We are converting a hotel into flats. How is this reflected in the Land Register? Changing the building type updates cadastral data and does not itself change the owner. The initial division of a building into flats and non-residential premises must be distinguished from their sale: if the owner remains unchanged, an owner’s declaration and the relevant building and technical documents may provide the basis for declaratory registration. Acquisition under a construction, internal-construction or extension agreement and the subsequent transfer of a flat, which is entered by constitutive registration, follow a different regime. The number and order of submissions must be determined from the particular documents; there is no general prohibition on submitting the supporting materials together.
  4. We demolished a building. How do we remove it from the title sheet if it is mortgaged? It is not removed automatically. Removing a building is a change to cadastral data made at the owner’s request and supported by evidence, usually a municipal confirmation of demolition and a survey plan. A mortgage terminates when all the assets it covers cease to exist, but its entry is not deleted automatically either. If the loan remains outstanding, the bank will usually require replacement security, so speak to it before demolition, not afterwards.

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Mgr. Patrik Tulinský, LL.M. Czech and Slovak attorney · SAK 300422 · ČAK 19654

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