How to Challenge a Contractor’s Reference to Design Defects and Underestimation of Work Volume

Summary of Legal Aspects of the Dispute

Pre-Trial Settlement of the Dispute

At the initial stage, it is important to document and analyze the situation.

1. Analysis of the Contract and Documentation

It is necessary to review the terms of your construction contract, cost estimate, and technical documentation to determine which works were stipulated and under what conditions. Check the sections governing changes to the work scope and quality requirements. If the contract specifies a mandatory claim (pre-trial) procedure for dispute resolution, it must be followed—otherwise, the court may leave the claim without consideration.

2. Documentation of Defects and Work Volume

If the contractor refers to defects or deficiencies, the customer must document these shortcomings: draw up an inspection report, take photographs, and engage an independent technical expert. It is crucial to establish precisely which work has been performed, which has not been completed, and which has been carried out with poor quality. This information will be useful for substantiating the customer’s position.

Distinction Between Visible and Hidden Defects

3. Claim to the Contractor

The customer sends the contractor an official written claim describing in detail the identified issues. The claim should refute the contractor’s arguments and refer to relevant legal provisions. In particular, if the contractor refers to defects in the design documentation or other obstructing circumstances, it must be pointed out that under the law, they were obliged to promptly notify the customer and suspend work upon discovering such issues. A contractor who failed to warn the customer in a timely manner or continued work without awaiting instructions may not subsequently refer to these circumstances when making claims or defending against the customer’s claims. This is a direct rule of Clause 2, Article 716 of the Civil Code of the Russian Federation.

4. Reference to Violation of the Procedure for Changing the Cost Estimate

If the contractor claims that the scope of work was underestimated and that additional work had to be performed, Article 743 of the Civil Code of the Russian Federation applies. Additional work not included in the cost estimate must be approved by the customer in advance. The law requires the contractor to notify the customer in writing of the necessity of any work outside the approved documentation if such work would increase the cost estimate. In the absence of the customer’s consent, the contractor is obliged to suspend such additional work. Otherwise (if the contractor performed additional work without authorization), they lose the right to demand payment for it or reimbursement of related expenses. The claim should state that no notifications or approvals regarding the increased scope of work were received from the contractor, and therefore, any reference to an “underestimated” cost estimate is unfounded.

5. Customer’s Demands

The letter should clearly specify the customer’s demands—for example, to eliminate the identified defects free of charge within a reasonable period or to proportionally reduce the price of the work for parts that were performed poorly or not completed at all (as expressly provided for by Article 723 of the Civil Code of the Russian Federation). If you have already corrected the deficiencies at your own expense, you may demand reimbursement of the incurred costs (provided such a clause exists in the contract). It is also common to demand completion of the remaining work within a specific period without additional payment. All demands must be substantiated—refer to contract provisions, relevant laws, and attach evidence (inspection reports, photographs, expert opinions, etc.).

6. Indication of Deadlines and Warning of Court Action

The claim should specify a reasonable period (for example, 10–15 days) for the contractor’s response and fulfillment of the demands. It should also state that, failing compliance, you will be compelled to file a lawsuit to protect your rights.

7. Negotiations

Alongside the exchange of correspondence, it is advisable to attempt to resolve the dispute through negotiations. It is recommended to involve a professional lawyer in this process. An experienced lawyer can help develop a well-founded position, take judicial practice into account, and avoid errors when calculating claims. During the dialogue, the parties may discuss compromise options—such as extending the completion deadline without penalties, partial price reduction, or engaging an independent expert whose opinion will be acceptable to both sides. If an agreement is reached, it must be documented formally—either as an amendment to the contract or a settlement agreement.

Judicial Resolution of the Dispute

When pre-trial measures do not lead to a resolution, the dispute proceeds to court. As a rule, disputes under construction contracts between legal entities and individual entrepreneurs are considered by the Arbitration Court. In court, the customer must substantiate their position both factually and legally, so it is crucial at this stage to have qualified legal representation.

Claims

Depending on the customer’s role in the dispute, different procedural scenarios are possible. Often, it is the contractor who initiates legal proceedings, demanding recovery of the alleged outstanding payment under the contract. In response, the customer submits objections and counterclaims. For example, the customer may file a counterclaim to reduce the contract price due to incomplete performance or the existence of defects. The customer may also claim damages and penalties — such as the cost of eliminating defects, penalties for delays, or contractual fines. Each of these claims will be considered within the same proceeding, and the court will assess the validity of both parties’ demands.

Justified and Unjustified Contractor Claims

Evidence and Expert Examination

As in the pre-trial phase, the key issue before the court will be the establishment of facts: which work was performed, in what volume and quality, and who is responsible for the defects. The court will take into account not only the contract terms but also the actual actions of the parties — correspondence, reports, claims, responses, and the behavior of both the contractor and the customer during construction.

In complex technical cases, a judicial construction and technical expert examination is almost inevitable. The expert (or expert commission) examines the site and documentation and submits a report in response to the court’s questions. Typically, the expert determines whether the work complies with the contract terms, whether construction defects are present, what caused them, and the actual volume and cost of the completed work. The expert’s report is a key piece of evidence in such disputes, and it is difficult for the parties to challenge it unless it contains clear inconsistencies. Therefore, both the customer and the contractor must prepare thoroughly — presenting comprehensive data and precise questions to the expert.

Customer’s Legal Position

• Lack of Notification about Defects
  If the contractor claims that the customer’s initial data were defective (such as poor-quality design documentation, errors in the technical assignment, or unsuitable materials provided by the customer), the court will verify whether the contractor fulfilled the requirements of Article 716 of the Civil Code of the Russian Federation. The contractor was obliged to warn the customer of such circumstances and suspend work. If they continue work without waiting for instructions, they lose the right to rely on these issues as a defense. In court, the customer should emphasize the absence of timely notifications, thereby depriving the contractor of their main justification.

• Unapproved Additional Work
  References to an underestimated cost estimate or scope of work can be challenged under Article 743 of the Civil Code of the Russian Federation. The court will verify whether the additional work mentioned by the contractor was approved and whether the customer consented to exceeding the estimate. Without the customer’s consent, all extra work is performed at the contractor’s risk. Moreover, unilateral performance of such work is often regarded by courts as unjust enrichment, meaning payment for it will not be awarded.

• Unrectified Defects in Work
  If the dispute concerns the quality of the work performed (and the customer withheld payment due to defects), it is important to emphasize that under the law, the contractor bears responsibility for improper quality. The customer has the right to demand a price reduction or free rectification of the defects (Article 723 of the Civil Code of the Russian Federation). Furthermore, a contractor who fails to correct identified defects at their own expense is not entitled to claim full payment of the contract price. In other words, reducing payment proportionally to the defects does not violate the contractor’s rights. This supports the legality of the customer’s actions in paying only for the properly executed part of the work. Even if the contractor refers to bankruptcy or lack of funds, the customer has the right to engage third parties to correct the defects and recover the related expenses from the contractor (if such claims are substantiated by evidence).

• Signing of Acceptance Certificates
  Contractors often argue that the customer signed acceptance certificates (Forms KS-2, KS-3) without remarks and therefore cannot challenge anything. However, this argument is not absolute. The existence of a bilateral acceptance certificate does not deprive the customer of the right to dispute the scope, cost, or quality of work in court. Judicial practice confirms that the customer may present evidence that the actual amount of work performed was less than stated in the documents or that hidden defects exist — even if the certificate was signed without comments.

• If the defects were obvious and could have been identified during ordinary acceptance, and the contract does not contain special provisions, the court will treat late claims critically (Article 720 of the Civil Code of the Russian Federation). However, many modern contracts explicitly state that signing the acceptance certificate does not release the contractor from liability for quality. Thus, the act of acceptance itself does not shield the contractor from liability if the customer provides evidence of incomplete or defective work.

After assessing all evidence and the expert’s report, the court will issue a judgment. A favorable outcome for the customer would be for the court to deny the contractor’s claims for additional payment, confirm the customer’s right to withhold part of the payment (or recover overpaid funds) due to incomplete or low-quality work, and award damages, penalties, or fines if proven.

Litigation over construction disputes can be lengthy and complex, especially if repeat or comprehensive expert examinations are required. Therefore, it is essential to establish a strong legal position from the outset. Within court proceedings, each party must prove the facts on which it relies.

Legal Support in Construction Disputes by KDpartners

Resolving disputes with contractors regarding construction defects and disputed work volumes requires the involvement of experienced legal professionals specializing in construction law. KDpartners has a team of qualified attorneys with extensive practical experience in handling construction disputes at all stages.

We provide comprehensive legal support, including a detailed review of the contract and construction documentation, evidence collection, preparation of claims, and full representation of the client in court. KDpartners specialists develop an optimal strategy to protect the client’s interests, coordinate necessary construction expert examinations, and present the client’s arguments in a legally sound manner.

Through professional legal representation, the likelihood of successfully challenging an unscrupulous contractor’s claims increases significantly, enabling the client to safeguard their rights and save substantial financial resources.