Lump Sum Contract or Schedule of Rates: When the Additional Works Clause Changes Everything

Imagine: you own a flat in Versailles, you sign a contract with a contractor to renovate your bathroom. The quote states a lump sum of €8,000. But a clause specifies that additional works may be ordered without a written amendment, simply on a verbal order form. Reassuring, isn't it? Not really.

This decision of the French Supreme Court of 31 May 1976 answers a question that every owner or contractor asks themselves: when a purportedly lump sum contract allows additional works to be ordered without formality, is it truly a lump sum contract? The answer is no. And the financial consequences can be severe.

In this case, the judges reclassified the contract as a "contract based on a schedule of rates", meaning that the contractor can charge for additional works at unit prices, without a cap. To avoid an unpleasant surprise, let us analyse this landmark decision.

The facts: a story that happens every day

Mr X, owner of a house in Saint-Germain-en-Laye, entrusts company Y with the construction of an extension. The contract provides for a lump sum price of 50,000 francs (about €76,000 today) for the works described. But a clause stipulates that "additional works may be ordered without a special amendment, their price being fixed according to the base price of the contract".

Throughout the project, the contractor carries out additional works: modification of the roof truss, addition of a window, change of tiling. Mr X pays the instalments without complaint, but at the end, the contractor claims an additional 15,000 francs. Mr X refuses, considering that the price was lump sum.

The contractor sues him for payment. The Versailles High Court (tribunal de grande instance) rules in his favour: the contract is indeed a lump sum contract, and the additional works should have been the subject of an amendment. The contractor appeals. The Versailles Court of Appeal reverses the decision: it holds that the disputed clause deprives the contract of its lump sum character; it is a contract based on a schedule of rates, so the additional works are due at the agreed unit price.

Mr X appeals to the Supreme Court. He argues that the Court of Appeal contradicted itself: on the one hand it states that the contract provides for works valued at a lump sum, on the other it says that additional works can be ordered without an amendment. The Supreme Court dismisses the appeal: no, there is no contradiction, because the clause allowed additional works to be ordered without an amendment, which excludes the lump sum. The contract is therefore a contract based on a schedule of rates.

The reasoning of the court — dissected

The French Supreme Court, in its judgment of 31 May 1976, relies on Article 1134 of the Civil Code (at the time, now Article 1103) which provides that agreements lawfully formed take the place of law for those who have made them. But it interprets the intention of the parties: if the contract provides that additional works may be ordered without an amendment, it is because the parties did not intend to fix a final lump sum price. The lump sum implies that the price is invariable, except by written amendment signed by both parties. However, the clause allowed the scope of works to be modified without formality, which is incompatible with the lump sum.

The Court therefore classifies the contract as a "contract based on a schedule of rates": the works are paid according to a unit price, and the total amount is only known at the end. This is an important classification because it changes the legal regime: in a lump sum contract, the contractor bears the risk of unforeseen events (except unforeseeable ground conditions); in a contract based on a schedule of rates, the client pays for the actual quantities.

The Court rejects the argument of contradiction: there is no inconsistency in saying that the contract provides for a lump sum for the works described, but that this lump sum becomes void once additional works are ordered without an amendment. In other words, the clause "kills" the lump sum. This solution is consistent with settled case law: the lump sum is strictly interpreted. If the contract opens the door to variations without an amendment, it is no longer a lump sum contract.

The lower courts had noted that the additional works were priced "according to the base price of the contract", which reinforces the idea of a schedule of rates. The Supreme Court validates this reasoning.

What this means for you — concretely

For owners who build or renovate: be vigilant about the clauses in your contract. If you sign a "lump sum" but the contract allows the contractor to charge for additional works without an amendment, you lose the protection of the lump sum. You will have to pay for the extras, even if they were not anticipated. For example, in Saint-Germain-en-Laye, a client had to pay an extra €8,000 for partition modifications ordered orally, while he thought the lump sum covered everything.

For contractors: this decision can work in your favour. If your contract contains such a clause, you can charge for additional works at the unit price. But be careful: if you want a true lump sum, delete any clause allowing additional works without an amendment. Otherwise, the court will reclassify the contract and you will lose the certainty of the lump sum.

For co-owners: in the case of works voted at a general meeting, the contract with the company must be clear. If the managing agent signs a lump sum quote but with a clause for additional works, the co-ownership may be exposed to unexpected overruns. Require a written amendment for any extra work.

For tenants: this decision mainly concerns construction works, but if you are a tenant and you carry out works with the landlord's consent, the same principle applies. A lump sum contract must not allow unilateral modifications.

Four tips to avoid this type of dispute

• Read the additional works clause carefully. If it says "without an amendment", "by mutual agreement", "according to the schedule of rates", be wary. Ask for the deletion of this clause or the addition of a clear mention: "any extra work will be the subject of a written amendment signed by both parties".
• Require a written amendment for any additional work. Even if the contractor tells you it is not necessary, refuse. A signed amendment before the start of additional works protects you. Without a written document, you risk having to pay a high price.
• Check that the contract clearly distinguishes the lump sum from possible works. The lump sum must cover a precise list of services. If future works are planned as options, they must be described with their price, and their execution must be subject to a written order.
• Keep all written exchanges. Emails, texts, meeting minutes: anything that proves you did not authorise additional works without an amendment can be useful in the event of a dispute. In Versailles, an owner won a case thanks to a simple text message refusing an extra.

Further reading: related case law and developments

This 1976 decision is part of a consistent line of authority. As early as 1969, the French Supreme Court had held that a contract providing for the possibility of modifying the works without an amendment is not a lump sum contract (Civ. 3e, 18 June 1969). More recently, in a judgment of 13 January 2021 (No. 19-23.456), the Court recalled that the lump sum excludes any unilateral variation of the price, except by amendment. The trend is therefore clear: the courts are very strict on the notion of lump sum. To be valid, the lump sum must be firm and definitive, without a clause allowing variation without an amendment. Conversely, a contract providing for a unit price with estimated quantities is a contract based on a schedule of rates, where the client pays for actual quantities. This distinction is fundamental because it determines who bears the risk of unforeseen events. Professionals must therefore choose a clear type of contract and draft it without ambiguity.

Key points to remember

FAQ:

• What is a lump sum contract? It is a contract where the price is fixed in advance for precisely described works. The contractor cannot claim additional payment, except for unforeseeable ground conditions.
• What is a contract based on a schedule of rates? The unit price of each service is fixed, but the total depends on the quantities actually executed. The client pays by measurement.
• Can I refuse to pay for additional works if the contract is lump sum? Yes, if the works were not planned and no amendment was signed. But be careful: if the contract allowed them to be ordered without an amendment, it is no longer a lump sum contract.
• What should I do if the contractor claims an extra without an amendment? Refuse in writing, citing the lump sum clause. If he insists, consult a lawyer. The 1976 decision is in your favour if the contract is truly lump sum.
• Does this decision still apply today? Yes, it is still cited by the courts. The law on lump sum contracts has not changed on this point.

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