THE PRICE OF AN INDEPENDENT WORK CONTRACT AND THE ECONOMIES OF THE INDEPENDENT WORK CONTRACTOR

  • 2010-03-25
  • By Andrius Gabnys, Assistant to the Attorney at Law

Ecovis Miskinis , Kvainauskas ir partneriai adokatu kontora

The contract for independent work has to specify the price of the work subject to fulfilment, or the methods and criteria of its calculation. In the event where the price is not specified in the contract, it has to be determined in accordance with the procedure established in the Civil Code of the Republic of Lithuania.
The price indicated in the contract of independent work has to include payment due to the independent work contractor for the work performed, and the compensation of expenses incurred by him.

The price of work specified in the contract may be determined by drawing up a definite or approximate estimate. In the instances when the work is fulfilled in accordance with the estimate drawn up by the independent work contractor, the estimate has to enter into force and become part of the contract of independent work from the moment it is confirmed by the customer.
In the event where a necessity arises to fulfil additional work, or for any other important reasons the independent work contractor has to increase the price of some individual stages of the work, he is obliged to inform the customer thereof in time. If the customer refuses to increase the price, the independent work contractor has the right to revoke the contract. In this event, the independent work contractor has the right to demand from the customer payment for the work fulfilled. The independent work contractor who failed to inform the customer in time about the necessity to increase the price is obliged to perform the contract for the price foreseen therein.

In the instances where a definite price for the work to be fulfilled is indicated in the contract, the independent work contractor has no right to increase the price, nor the customer to reduce it. The same provision applies for those instances where at the moment of concluding the contract of independent work, it was not possible to determine the exact amount of work subject to fulfilment, nor all the expenses necessary for the fulfilment of work.

In the event of essential growth of the price of materials or equipment, or also of the services rendered to the independent work contractor by third persons, and the independent work contractor was not able to predict such increase at the time when the contract was concluded, the independent work contractor has the right to demand an increase of the established price of work or to dissolve the contract in accordance with the provisions established in the Civil Code.

In the event where the actual expenses of the independent work contractor prove to be lower than those taken into account in determining the price of work, the independent work contractor retains the right to the payment for work as established in the contract of independent work, unless the customer proves that the economies produced negative effect on the quality of work as determined in the contract.

(Article continued next week).

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