Explanation of Article 470
The article refers to a situation that may arise in a contract for work, resulting in a modification of the contractor's due payment. This occurs when the contract is concluded based on an estimate per unit, such as when the employer agrees with a contractor to build the concrete structure of a house at a price of one thousand riyals per unit, according to an agreed design, with a total of one thousand units in the design. After the contractor begins work, it becomes necessary to deepen the excavation due to the nature of the land on which the house is being built, requiring an excess of the agreed units. The provisions of the article apply under the following conditions: The first condition: The contract must be concluded on a per-unit basis and not for a total fee. If it is for a total fee, Article (471) applies. The second condition: The excess of the estimate must be apparent for a reason unknown at the time of the contract. The excess refers to quantities, not prices. If the excess is minor, not apparent, or expected at the time of the contract, or could be anticipated, the fee increases by the amount of the excess, and the employer has no option. The third condition: The contractor must immediately inform the employer of the excess, indicating the expected increase in the fee. If the contractor does not inform the employer, delays in informing, or does not specify the expected increase in the fee, the right to claim expenses exceeding the estimate is forfeited. If the three conditions are met, there are two possible scenarios: The first scenario: The noticeable excess is not significant, obligating the employer to increase the contractor's fee by the amount of the excess, with no option for the employer. The second scenario: The excess is significant, giving the employer two options: The first option: To remain in the contract and increase the fee in proportion to the significant excess. The second option: To withdraw from the contract, requiring the employer to request the contractor to halt execution without delay, while compensating the contractor for the value of the completed work as per the contract terms, regardless of the actual expenses incurred by the contractor. The contractor cannot claim compensation for potential earnings had the work been completed. This is considered partial execution of the contract, not a termination. Since this article is supplementary, the contracting parties may agree to terms contrary to those mentioned in it.
Related To
Article 470
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If a contract is concluded according to a unit-based measurement and it becomes apparent during the course of the work that the estimated measurement must be significantly exceeded in order to execute the agreedupon design plan, the contractor shall immediately notify the client thereof and of any expected increase in the fees. If the contractor fails to do so, he shall forfeit his right to demand payment for any expenses incurred in excess of the estimated value.
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If the additional number of units required for the execution of the design plan is considerable, the client may, without delay, withdraw from the contract and suspend execution, provided that the contractor is paid for the work he completed as estimated in accordance with the terms of the contract.