Lump-sum contract: when a simple estimate is not enough to set the price of works

You have just had an extension built on your house in Illkirch-Graffenstaden. The initial estimate was clear: €45,000 for finishing works. But as the project progressed, you requested some modifications: an additional electrical socket, a bespoke cupboard, and eventually you gave up on a partition wall. The contractor now claims €12,000 more than the estimate. You thought the price was fixed. He argues it is not. Who is right?

This question, seemingly mundane, lies at the heart of a decision by the Court of Cassation dated 25 April 1972 (No. 72-12.629). The judges specify the conditions under which a contract for work qualifies as a "lump-sum contract" – that is, a contract where the price is fixed and final, subject to very strict exceptions. The stakes are high: if the contract is lump-sum, the contractor cannot claim extra payment; otherwise, he can charge for additional works and unforeseen items.

In this judgment, the Supreme Court upholds the reasoning of the lower courts which had refused to classify the contract as a lump-sum contract. Why? Because the estimate did not expressly state that it was a lump-sum contract, because unforeseen works appeared in a document written by the project owner (the homeowner), and because certain works had been removed from the contract without applying the rules of Article 1794 of the Civil Code. A full analysis of this decision and its implications for you, whether homeowners or contractors.

The facts: a story that happens every day

Mr X, a homeowner in Strasbourg, entrusts a contractor with finishing works on his house. An estimate is prepared, but it does not bear the words "lump-sum contract". During the works, additional works are requested by the homeowner: they are noted on a simple piece of paper, in the handwriting of Mr X's wife. Furthermore, some initially planned works are removed, reducing the amount of the estimate. At the end of the project, the contractor presents an invoice including the additional works. Mr X refuses to pay, arguing that the price was fixed. The contractor sues him for payment.

The Strasbourg High Court (tribunal de grande instance), followed by the Colmar Court of Appeal, rule in favour of the contractor: they find that the contract is not a lump-sum contract. In the judges' view, the absence of an express mention on the estimate, the written evidence of additional works in the project owner's handwriting, and the removal of certain works without applying the rules of Article 1794 (which provides that the project owner may terminate a lump-sum contract by paying for works already done and compensation) demonstrate that the parties did not intend to enter into a lump-sum contract. Mr X appeals to the Court of Cassation.

He argues that the judges should have examined the handwritten document more thoroughly, and that the additional works did not correspond to unforeseen works. But the Court of Cassation dismisses his appeal: the lower courts had sovereignly assessed the facts to exclude the classification of a lump-sum contract. The judgment is upheld.

The reasoning of the court — broken down

The Court of Cassation relies on Articles 1787 and 1794 of the Civil Code. Article 1787 defines the contract for work: one person instructs another to carry out a work for a price. Article 1794 specifically concerns the lump-sum contract: it allows the project owner to unilaterally terminate the contract, even if the work has already begun, by paying the contractor for his work, expenses, and compensation. But in return, the price is fixed and cannot be increased except by written agreement of both parties for additional works.

In this case, the lower courts noted three elements that exclude a lump-sum contract:

• Absence of express mention on the estimate: the estimate did not specify that it was a lump-sum contract. For the Court, this mention is a strong indicator of the parties' intention.
• Unforeseen additional works: works were requested orally and then confirmed by a document written by the homeowner's wife. This document did not refer to the initial estimate and did not modify the contract in the form of an addendum.
• Removal of works without application of Article 1794: certain works were removed from the contract, which reduced the amount of the estimate. However, in a lump-sum contract, any removal should follow the procedure of Article 1794 (partial termination with compensation). The parties did not follow this rule.

The Court of Cassation upholds this reasoning: the lower courts sovereignly found that the contract did not have the characteristics of a lump-sum contract. This is a landmark decision reminding that the classification of a lump-sum contract is not presumed. It must result from the clear and unequivocal intention of the parties.

What this means for you — in practice

This decision has immediate practical implications, whether you are a homeowner, a tenant (who carries out works with the landlord's consent), or a contractor.

For the landlord: if you entrust renovation works in a flat in Strasbourg, and the contractor gives you an estimate without the words "lump-sum contract", beware: the price is not final. Any unforeseen event or modification may be charged extra. Concrete example: you have plumbing work done in a building in Illkirch-Graffenstaden for €8,000. During the works, you ask to move a radiator. The contractor charges you an additional €1,200. Without a lump-sum clause, you will have to pay.

For the tenant: if you carry out fitting-out works with your landlord's permission, ensure that the contract specifies that it is a lump-sum contract. Otherwise, you risk having to pay unforeseen extras.

For the contractor: if you want to secure your payment and avoid disputes, clearly state "lump-sum contract" on your estimates and contracts. And in case of modifications, have an addendum signed in writing specifying the new terms.

In practice, remember this: an estimate alone is not enough to create a lump-sum contract. There must be an express mention, and any modification must be formalised in writing with the agreement of both parties.

Four tips to avoid this type of dispute

• Require the words "lump-sum contract" on the estimate: before signing, check that the document clearly states that it is a lump-sum contract. This will protect you against claims for extra payment.
• Formalise any modification by a written addendum: if you request additional works or remove some, have an addendum signed that modifies the initial contract. Do not rely on an oral agreement or a scrap of paper.
• Keep all documents: estimates, addenda, letters, emails. In case of a dispute, they are your best evidence. The Court of Cassation emphasises the importance of written evidence.
• If works are removed, apply Article 1794: if you delete services, formalise a partial termination with compensation to the contractor for works already done and loss of profit. This avoids disputes.

Further reading: related case law and developments

This 1972 decision is part of a consistent line of case law. The Court of Cassation has repeatedly reaffirmed that the classification of a lump-sum contract is not presumed (Civ. 3e, 12 May 1999, No. 97-14.815). It requires that the parties' intention be clear and unequivocal. Thus, simply providing a detailed estimate is not enough; an express mention is required.

However, a recent trend tends to soften this strictness in certain cases. For example, when the estimate is very precise and the parties have agreed on all items, some lower courts may consider that there is an implied lump-sum contract. But this position is a minority. The majority view remains that of 1972: requiring an express mention.

For the future, it is advisable for professionals to always clearly stipulate the lump-sum nature of the contract, otherwise they risk facing claims for extras. Homeowners, on their part, should be vigilant and not hesitate to negotiate this mention.

What you absolutely must remember

FAQ:

• Does a signed estimate amount to a lump-sum contract? No, not automatically. The estimate must expressly state that it is a lump-sum contract, or the parties must have clearly manifested their intention to fix a final price.
• What if the contractor claims extra payment after the estimate is signed? Check whether the estimate mentions "lump-sum contract". If yes, refuse the extra payment, unless you signed an addendum. Otherwise, the extra is due if it corresponds to unforeseen works or unexpected events.
• Can I remove works from the contract without penalty? In a lump-sum contract, removal is possible but must comply with Article 1794: you must compensate the contractor. In a non-lump-sum contract, removal is free but may give rise to damages.
• What is the time limit to challenge an extra charge? Generally, you have 5 years from the invoice to take legal action (standard limitation period). But it is better to challenge promptly, in writing.
• Do I have to pay for additional works requested orally? Yes, if you requested them and they were carried out. But without written evidence, it will be difficult to prove their content. Always prefer written form.

In summary: to avoid unpleasant surprises, have the estimate state "lump-sum contract" and formalise any modification by addendum. This 1972 decision remains relevant and protects you if you follow these rules.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) could save you months of proceedings — and often much more. Book an appointment →