Limitations on client’s right to instruct changes in Norwegian law

Tommy Bruun
Kvale Advokatfirma, Oslo

John Olav Hatløy
Kvale Advokatfirma, Oslo

The primary legal sources governing construction contracts in Norway are various standard form contracts developed collaboratively by contractors and clients. These contracts define the client’s rights to request changes. This article will examine the provisions related to changes and analyse a recent ruling by the Norwegian Supreme Court known as Jordal Amfi (HR-2025-977-A). In this ruling, the Supreme Court addresses fundamental questions of Norwegian construction law concerning the client’s right and limitations to instruct changes.

The fundamental principle is that parties to construction contracts are free to agree on any terms they choose – the principle of contractual freedom. However, most construction contracts in Norway are based on established standard form contracts (agreed documents). The most common standard contracts for onshore construction projects are the NS 8405 and NS 8407. NS 8405 outlines general conditions for building and civil engineering projects, while NS 8407 specifies general conditions for design and build contracts (turnkey). The client’s right to instruct the contractor to make changes is inherent in all standard contracts. This article will focus on the client’s right to make changes under NS 8407 (turnkey), though this regulation is also applicable to other standard contracts.

According to Norwegian standard contracts, the client has the unequivocal authority to instruct the contractor to modify the contract work and/or the contractor’s original obligations, as stated in section 31.1 of NS 8407.

Changes may involve additional work or modifications to the originally agreed contract scope. This can include alterations in character, quality, nature, or execution. The right to make such changes is warranted, as the client may identify more effective solutions or may no longer require all the originally agreed contract work.

The term ‘instruct’ refers to the client’s authority to direct the contractor to perform work via a change order. This applies even if there is a disagreement between the parties regarding whether the client’s instruction constitutes a change entitling the contractor to additional payment and/or extension of time. Disputes may arise about whether the change is based on the client’s or the contractor’s liability, particularly if the client has not issued a change order. Under Norwegian law, the client’s right to instruct the contractor is termed a ‘duty to perform’, which ensures that the execution of the contract continues despite disagreements between the parties.

The client’s right to request changes is generally limited by two specific regulations: (1) Qualitative limitation – any change must relate to the contract’s scope and not materially differ from the originally agreed duties; and (2) Quantitative limitation – the contractor is not required to perform work that increases the contract sum by more than 15 per cent.

The 15 per cent threshold is an important limitation on the right to instruct changes. First, the client cannot instruct the contractor to perform additional work if the changes and additional work exceed this threshold. Second, if the contractor declines to undertake additional work beyond this threshold, the contractor gains a new negotiating position, allowing the contractor to propose a new amount for work beyond this 15 per cent limit. If the client rejects this new offer, the contractor can refuse to execute the additional work.

Given the significance of the 15 per cent threshold, it is not uncommon to agree on deviations from this limit, enabling clients to request larger changes than permitted under NS contracts. Contractors, especially those working with public clients, should verify whether the contract includes an extended obligation to perform changes.

The client cannot impose negative changes on the contractor that exceed a 15 per cent net reduction of the contract sum. If a negative change results in a net reduction beyond 15 per cent, it will be treated as a partial cancellation, and the contractor will be entitled to compensation for loss of profit.

What changes and additional work are relevant for the 15 per cent limitation?

In Norwegian construction law, there have been discussions on whether only changes explicitly ordered through change orders or also claims for additional compensation/time caused by client risks (eg, disturbance) fall within the ambit of the 15 per cent threshold. These issues were addressed in a recent ruling by the Norwegian Supreme Court, known as Jordal Amfi, (HR-2025-977-A).

The case involved the final settlement following the construction of Nye Jordal Amfi, Oslo’s new ice hall. Early in the project, it was discovered that a box culvert, through which a stream flows, was located higher in the terrain than initially assumed. Additionally, acid-forming rock was found in the excavation pit, necessitating the activation of a pre-agreed option in the contract. The parties agreed that these risk factors entitled the contractor to both an extension of time and additional payment. However, they disagreed on the quantification and implications of these adjustments.

The Supreme Court ruled that only changes explicitly requested by the client will be considered in relation to the 15 per cent threshold. Only officially ordered changes fall within this 15 per cent limitation. Claims for additional payment arising from circumstances for which the client is responsible, do not qualify as relevant changes in this context and are therefore not included in the 15 per cent threshold.

The Supreme Court also ruled that pre-agreed options in the contract would not be included in the 15 per cent threshold when triggered.

What are the implications of reaching the 15 per cent threshold during the project?

The consequences when a contractor performs change work beyond the 15 per cent limit are not defined in Norwegian standard contracts.

The Supreme Court began its assessment by stating that the standard form contracts’ provisions on compensation for changes do not apply when the client exceeds their authority to instruct changes. In such cases, the contractor is generally released from the contract’s rates for any additional change work.

In the absence of an agreement, the Supreme Court determined that compensation for change work beyond the 15 per cent limit must be interpreted based on the contract, with outcomes varying depending on specific circumstances.

The Supreme Court outlines various scenarios regarding the 15 per cent limit. If the parties agree that this limit has been reached and the client requests that the change work be settled at the contract prices, the contractor is generally considered to have accepted these terms by proceeding with the change work. Conversely, if the client does not object to the contractor’s proposal to perform the change work at different prices, the client is regarded as having accepted the contractor’s proposal.

When the parties disagree on the terms for change work exceeding the 15 per cent limit, the Supreme Court’s ruling provides limited guidance. It states that compensation must then be determined for each change order based on the contract, including change requests, change orders, correspondence, and meeting minutes. Furthermore, the Court indicates that disputes must ultimately be resolved in court, noting that the laws and legal principles on failing assumptions may be more significant when the 15 per cent limit is exceeded.

Oslo construction site by night. Credit: erikzunec/Adobe Stock