Addendum (Construction Contract)

A change order in a construction contract is a written agreement between the client and the contractor regarding additional or modified services that were not included in the original scope of work and are compensated separately. Change orders arise from revised plans, unforeseen site conditions, the client’s requests, or variations in quantities. They are normal and unavoidable in construction law-the key is that they are agreed upon in writing and in a timely manner before the additional work is performed.

Origin of Addenda

Addenda arise in different ways: modification addenda result from changes to the client’s plans; additional supplements arise from services that were simply omitted from the original scope of work; quantity deviations occur when actual quantities differ from the calculated tender quantities (price-relevant for VOB/B starting at 10 percent). Delays caused by other trades or the client themselves can also trigger supplements if they result in additional costs.

A frequently underestimated driver of change orders: subsequent requests from the building owner. Anyone who requests floor plan changes, material substitutions, or additional fixtures during the construction phase generally has the right to do so-but must bear the additional costs. Problems arise when these requests are communicated verbally or via email without a change order being agreed upon. In this case, a legal gray area arises that can become costly in the event of a dispute.

Legal Basis for BGB and VOB/B Contracts

For BGB contracts, § 650b BGB (Amendment of the Contract) applies: The client may order changes; the contractor is entitled to reasonable compensation. In the event of a unilateral order and a lack of agreement on the price, the contractor may perform on a provisional price basis and settle the account subsequently.

For VOB/B contracts, § 2 Nos. 5 and 6 VOB/B apply: Changes in quantities and new services entitle the contractor to adjusted unit prices or a new price. The basis for calculation is the contractor’s original cost estimate-the contractor must therefore disclose the basis for the estimate if they wish to justify a supplementary price. Important: Claims for compensation arising from supplements lapse if they are not asserted in a timely manner. Under VOB/B, immediate written notification is mandatory.

Reviewing Change Orders: What Clients Should Look For

A justified claim for a change order should include the following information: a clear description of the modified or additional service, the justification for the claim (reference to a change order, plan modification, etc.), a transparent price calculation based on the contractor’s original cost estimate, and the timeframe during which the service will be performed.

Clients should review the content of every change order before signing it. Common errors include: double billing for services already included in the main contract; passing on risks that the contractor must bear themselves; and charging inflated unit prices. A site manager or architect should always review change orders before signing them.

Disputes Over Change Orders and Prevention

Change order claims are one of the most common causes of conflict in construction law. Clients often question the validity or amount of change order claims; contractors feel their calculated costs are not covered. Prevention begins with a precise request for proposals and a complete scope of work. Requests for changes should always be agreed upon in writing with a cost estimate before execution. A construction log and careful documentation of the actual situation protect both parties in the event of a dispute.

Practical Tip for Homeowners in Nuremberg and Franconia

Homeowners in the Nuremberg and Franconia region who commission single-family homes or renovations on their own often face additional claims from tradespeople-frequently justified, sometimes excessive. Our recommendation: Hire a construction manager or an experienced architect who can expertly review additional claims and represent your interests as the client. In Nuremberg and the surrounding region, there are numerous experienced architecture and project management firms that can take on this task.

Unresolved additional claims should not simply be accepted-pay only after a written review and agreement. Anyone who pays without review loses the right to contest the claim later and sets a precedent that may encourage further additional claims.

Frequently Asked Questions

As the client, do I have to accept every additional claim?

No. You can review the justification and amount of each change order. Payment is appropriate for justified claims; for excessive claims, you can negotiate or-in the event of a dispute-insist on an arbitration ruling or a court ruling.

What happens if the contractor performs additional work without a change order?

If the contractor performs additional services without having agreed to a written amendment, they risk the client disputing the additional costs. A claim for unjust enrichment exists if the client has clearly made use of the service-however, enforcement is more difficult than with a written amendment.

Is there a deadline for asserting claims for additional work?

For VOB/B contracts, claims for additional work must be submitted immediately after the claim arises (Section 2(8) VOB/B); late claims may be forfeited. For BGB contracts, the standard three-year statute of limitations applies. Nevertheless, prompt written notification is recommended here as well.

How do I prevent change orders from making the construction project prohibitively expensive?

The best protection is a complete and precise request for proposals before construction begins. The more precise the scope of work, the less room there is for claims for additional work. In addition, for larger projects, we recommend agreeing to a lump-sum contract that includes increases in quantities. For construction projects involving foreseeably complex technical aspects (historic preservation, renovation of old buildings, specialized civil engineering), an expert budget for unforeseen findings is advisable.

Does a change order always have to be agreed upon before work begins?

Ideally, yes. If a contractor performs work without a written change order having been agreed upon, they find themselves in a weaker legal position: The client can dispute the obligation to pay. However, the German Civil Code’s law on contracts for work and services (§ 650b(2) BGB) provides that, in the event of a unilateral order by the client, the contractor must perform the work even without an agreement on the price-on a provisional basis with the right to subsequent settlement. In practice, clients should insist that every addendum be confirmed in writing before the work is performed. A verbal instruction-“Just do it; we’ll sort it out later”-is a frequent source of disputes on construction sites in Nuremberg and the surrounding region.

Change Order Management for Renovations of Older Buildings in Nuremberg

Renovations of older buildings in Nuremberg’s Wilhelminian-style or historic structures are particularly prone to change orders: Hidden damage (decaying rafters, corroded water pipes, insulation containing asbestos, mold growth behind facade cladding) often only comes to light after construction begins and triggers change order claims. We recommend that building owners renovating an existing property budget for a contingency budget of 10-20% of the total construction cost from the outset. At the same time, a clause should be included in the construction contract obligating the contractor to immediately report any unforeseen findings and to prepare a cost estimate before proceeding with further work. This is the only way for the builder to maintain cost control and set priorities.

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