What is a construction contract?
A construction contract — also known as a construction agreement or construction contract — is the written record of the agreements between a client and a contractor regarding the execution and completion of a tangible work. The construction contract forms the contractual basis for everything that happens during and after the project: the price, the schedule, the quality requirements, the rules regarding additional and reduced work, liability for defects, and the procedure for disputes. The more detailed and balanced the construction contract is drafted, the lower the risk of costly conflicts during execution.
Our lawyers will draft a construction contract for you that aligns with your project, your position as client or contractor, and the applicable industry terms and conditions — from a simple renovation to a complex new construction project.
When do you need a written construction contract?
Although a construction contract is legally valid orally for most projects, written documentation is indispensable in practice. When building a home commissioned by a consumer, written documentation is even legally required pursuant to Article 7:765 of the Dutch Civil Code. However, even beyond that legal obligation, the following applies: without a written contract, you have no legal basis whatsoever in the event of a dispute regarding the work description, the price, or the completion date. Most construction disputes handled by our lawyers can be traced back to an oral or poorly documented construction contract. You need a written construction contract for new construction, remodeling, or renovation of a home or commercial property, for the installation of technical systems, for infrastructure projects, for maintenance contracts of any significant size, and for any construction contract where the contract sum exceeds a few thousand euros.
What are the essential components of a construction contract?
A sound construction contract contains at least the following components: A precise work description outlining exactly what the contractor must build, install, or construct, preferably referring to specifications, construction drawings, or a technical description attached. The contract sum or price basis: fixed sum or cost-plus contract. The start and completion dates , including provisions for penalties or deductions for late completion. The payment schedule with installment payments linked to the progress of the work. A clear procedure for additional and reduced work, requiring written form and approval prior to execution. Quality requirements that the work must meet. A handover procedure including an inspection protocol and recording of remedial obligations. Liability provisions and warranty periods. The applicable general terms and conditions , such as the UAV 2012, UAV-GC 2025, or AVA 2023. And finally, a dispute resolution mechanism with a choice of forum for the civil courts or the Council of Arbitration for the Construction Industry.
What is the difference between a fixed price contract and a cost-plus contract?
This is one of the most decisive choices in a construction contract. With a fixed-price contract, the contractor agrees on a fixed price for the entire work. In doing so, the contractor assumes the risk of setbacks during execution: if the work turns out to be more expensive than budgeted, that is his problem. The client has certainty regarding the total price. With a cost-plus contract , the client pays the actual costs incurred — labor, materials, subcontractor costs — plus a markup for profit and general expenses of typically five to fifteen percent. The client bears the risk of setbacks: if the work takes more time or requires more materials than expected, the final bill increases. If the contractor has provided a target price in a cost-plus contract, the final price may, in principle, not deviate by more than ten percent from this target price pursuant to Article 7:752, paragraph 2 of the Dutch Civil Code without timely warning. Our lawyers advise you on which pricing basis best suits your project and how to contractually cover the associated risks.
How do you arrange additional work in a watertight manner in the construction contract?
Additional work is by far the most common source of conflict in construction contracts. The contractor claims compensation for work outside the original scope of the contract; the client disputes that an order for it was ever given. A watertight additional work clause regulates three things: firstly, that additional work is carried out exclusively upon written instruction from the client; secondly, that the contractor provides a written quotation prior to execution, which the client must explicitly approve; and thirdly, that the contractor warns the client in a timely manner if a change requested by the client leads to a price increase — the latter is a statutory obligation under Article 7:755 of the Dutch Civil Code. Without written documentation of additional work agreements, a contractor is left empty-handed in the event of a dispute, regardless of how clearly the order was given verbally. Our lawyers draft an additional work procedure for you that works in practice.
What is a subcontracting agreement and what are the risks?
In larger construction projects, the main contractor typically engages subcontractors for specialized work such as electrical, plumbing, plastering, or painting. The subcontracting agreement is the contract between the main contractor and the subcontractor. Legally, the main contractor is fully responsible to the client for the quality of the work, including the part performed by subcontractors. At the same time, the subcontractor is liable to the main contractor for their own part. This creates a chain of liability, making it essential that the subcontracting agreement aligns substantively with the main contracting agreement—including quality requirements, schedule, and delivery procedure. A discrepancy between the two contracts can result in the main contractor bearing risks they believed they had passed on to the subcontractor. Our lawyers will review whether your chain of contracts is watertight.
What is the document hierarchy for a construction contract with appendices?
For projects of any significant size, the construction contract rarely consists of a single document. Typically, reference is made to a series of appendices: construction drawings, specifications or a technical description, STABU or RAW specifications, a requirements specification, a schedule, and the applicable general terms and conditions. Together, all these documents form the contractual basis of the project. Consequently, the question of which document prevails in the event of conflicting provisions—the contract itself, the specifications, or the general terms and conditions—is of great practical importance. Without an explicit ranking provision in the contract, uncertainty may arise regarding what actually applies in the event of a conflict. Our lawyers establish a clear document hierarchy for you and verify the mutual consistency of the appendices before you sign.
What special rules apply to the construction contract with a consumer?
When building a home commissioned by a consumer — a natural person who is not acting in the exercise of a profession or business — mandatory legal protection provisions apply pursuant to Articles 7:765 to 7:769 of the Dutch Civil Code, from which no derogation to the detriment of the consumer is permitted. The construction contract must be concluded in writing. After receiving a copy of the agreement, the consumer has a three-day cooling-off period to dissolve the agreement without giving reasons. The client cannot be obliged to pay more than is proportionate to the progress of the work — a strict payment arrangement in which the contractor receives full prepayment is therefore not permitted. Furthermore, in the event of defects after completion, the contractor's liability is enhanced. If, as a contractor, you use a standard contract that has not been adapted to these mandatory legal rules, you run the risk that provisions will be annulled or that the client will dissolve the agreement.
How do you handle delays and penalty clauses in the construction contract?
Delays in completion are one of the most common disputes in construction contracts. A well-drafted construction contract contains a clear completion date and a penalty clause for late completion: a fixed amount per calendar day or working day that the contractor owes if he exceeds the agreed completion date. Please note: under the UAV 2012, compensation for late completion is limited to a fixed amount per working day, which makes it difficult for the client to recover higher actual damages. If, as the client, you wish to keep open the possibility of claiming the full actual damages, you must explicitly agree to this and amend the UAV on this point or declare it inapplicable. Our lawyers advise you on how to tailor the penalty clause to your specific project and risk profile.
How much does it cost to draft or review a construction contract at MKBjuristen?
The costs for drafting or reviewing a construction contract depend on the size and complexity of the project, the number of parties, the appendices to be arranged, and the extent to which the agreement needs to be aligned with industry standards. After a brief intake, we will provide you with a transparent quotation. We take a pragmatic approach: a good contract does not need to be unnecessarily long, but it must cover all relevant risks. Contact us for a no-obligation estimate.
How does it work at MKBjuristen?
After a brief intake, our lawyers map out your project, your position, and your specific risks. Based on this, we draft a construction contract tailored to your situation — including the correct work description, a watertight additional work clause, a realistic payment schedule, and a clear completion and warranty regime. Have you received a construction contract from your counterparty? We will then assess it for imbalances and unreasonable risk allocation and advise you on the adjustments to be negotiated. Are you already involved in a dispute regarding additional work, delays, or defects? Our lawyers will assist you from the initial formal notice to proceedings before the civil court or the Arbitration Board for the Construction Industry.
