The Court of Appeal's judgment in construction case partially set aside

A contractor demanded additional remuneration from the builder due to an increase in payroll tax. The contract gave the contractor the right to index adjustment of the contract sum, but such adjustment would only entail a very small – if any – upward adjustment of the remuneration. The Supreme Court found that none of the special provisions in the contract material presented by the contractor provided a basis for demanding remuneration for increased payroll tax beyond the index regulation. Decisive emphasis was placed on the wording of the contract and on the purpose of the index regulation. The Supreme Court also found that the builder, being entitled to withhold remuneration to cover accrued daily fines, may also withhold VAT on the withheld amount, and that this had been correctly handled by the developer.

Read the whole judgment (Norwegian only)

Area of law: Construction law. NS 8417 section 33.8.

Key paragraphs: 33-34, 57-58, 60, 71

Justices: Webster, Normann, Bergh, Steinsvik, Sæther