29 January 2026
Are you planning to build or renovate? If so, a number of questions arise straight away: which type of agreement for contracting works is best for you? Do you opt for a fixed contract price, a target price, or a contract based on hours worked? Are any general terms and conditions applicable and, if so, which ones? Below is a practical guideline.
Things do go wrong from time to time. Parties do not always make sufficiently clear arrangements about which works must be carried out, what the contract price is, and how much time the works will take.
These are:
If a fixed contract price has been agreed, the risk of financial setbacks lies (in principle) with the contractor. After all, a fixed price has been agreed. For a client this is convenient, because there is clarity about the financial arrangements, except for provisional sums for additional and/or reduced work. Provisional sums are works for which no precise price is known at the time the contract is concluded.
As a rule, a contractor will only agree to a fixed contract price if they can properly estimate the scope of the works; otherwise they will opt for a target price or an agreement based on hours worked.
A target price is an estimate made by the contractor in advance. Unlike a fixed contract price, it provides only an indication of the expected final amount. The actual price may be higher or lower. The law provides that the final price may not exceed the target price by more than 10% (Article 7:752, paragraph 2 of the Dutch Civil Code).
An exception to this general rule applies if the contractor must warn the client when the price threatens to exceed that 10% margin (Article 7:754 of the Dutch Civil Code). The client can then decide either to adjust the works so as not to exceed the target price, or to accept the additional costs.
An agreement based on hours worked is mainly used where the contractor cannot reliably determine the scope of the works in advance. The price then consists of reimbursement of the actual execution costs, plus a mark-up for overheads and profit. With an hours-worked arrangement, the risk of financial setbacks lies in principle with the client.
In that case, under the law the client owes the contractor a reasonable price (artikel 7:752 BW). When determining that reasonable price, account is taken of the rates the contractor uses for other projects. The contractor must be able to substantiate those rates.
In practice, a “reasonable price” often leads to disputes, because client and contractor frequently disagree on whether the price is indeed reasonable.
Tip: if no price is agreed, always set out key assumptions in advance.
Besides the contract itself, it is also important to check whether general terms and conditions apply. Why? General terms regulate a number of matters as standard. In the event of a dispute, parties can rely on both the contract and the general terms.
For contracts with a fixed contract price, the UAV 2012 (2025 version) often applies. The UAV 2012 is specifically designed for fixed-price contracts and includes provisions on both parties’ obligations, rules on completion and handover, a general timetable, and guidelines for dispute resolution.
These general terms apply to contracts with a fixed contract price or those based on hours worked. Like the UAV 2012, the AVA regulates (among other things) the parties’ obligations, additional and reduced work, rules on completion and handover, and dispute-resolution guidelines.
The AVA for business clients applies only to contracts with a fixed contract price or those based on cost-plus/regie.
Our real estate and tenancy lawyers can assist you in drafting or reviewing an agreement, and also if a dispute arises. If you would like to know which type of contract or which general terms are most suitable for your situation, please feel free to contact us.
