NJORD Estonia: Is non-predictable increase of construction cost the basis for the amendments in the construction contract?
Construction is often a long-term process, going on for years. A lot may change during this period in the surrounding economic and political environment. Therefore, at the time of entry into the construction contracts with a longer term, it is often not possible to foresee the significant future developments and changes occurring in the construction market. The changes may include, for example, the appreciation of construction costs, due to unforeseen increases of construction materials, and labour costs during the execution of the construction contract. Classically, this risk is borne by the contractor.