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. How does an agreement to enter into a purchase contract work for flats in a development? In an agreement to enter into a future contract, the parties undertake in writing to conclude a purchase contract by an agreed date and must already agree its essential terms, especially the property and price. If one party fails to conclude it, the other may seek a court decision substituting for that party’s declaration of intent within one year, and also has a right to damages. In development projects, a reservation agreement usually comes first.
  2. As a developer, do I own the copyright in the design documentation? Design documentation is protected by copyright if it constitutes a unique result of creative intellectual activity. A technical document or its designation as design documentation does not in itself attract protection. For a protected design, the author is the designer or architect who created it through their own creative activity. Commissioning a design gives you a licence to use it for the purpose arising from the contract, not unlimited rights. Other uses, particularly building the same design again or having another designer alter it, require a specific agreement; moreover, the author’s economic rights cannot be transferred.
  3. What must a contract transferring a newly built flat contain? A contract transferring ownership of a flat must be written. Under the Flat Ownership Act, it must include in particular a description of the flat and its appurtenances, the co-ownership share in the building’s common parts and facilities and the land, arrangements for land rights, and the acquirer’s declaration of accession to building management. Ownership is acquired only through constitutive registration in the Land Register.
  4. We built a building but the Land Register has not recorded it. What usually went wrong? A document error must be distinguished from a documented change of ownership. Under § 46, the Land Register records the person named in the relevant document unless another public or other document proves a different owner. A difference between the person undertaking the building named in the permit and the current owner therefore does not automatically require correction of the old permit. If the documents contain an actual error or fail to prove ownership, however, they must be corrected or supplemented; disputed ownership may require court proceedings.

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

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