Contractors Request More Money Than Estimated Cost

[Kenn C.]

Who pays for unexpected costs that arise for a contracted job? The contractor estimated a job, performed the work, then came back with additional charges to cover more work that was performed and/or materials.

Do you have any best practices you can share about avoiding these types of surprise expenses? Or, is it reasonable to expect that the contractor may encounter unexpected challenges and that the estimated cost is subject to change. 

I read through some previous posts on this type of subject. Should the estimates include statements like: "Not to exceed X amount of dollars."  or should the estimate specify how additional work will be handled, and place limits, or requirements on approval or payment? Something like: "No additional work or materials will be paid for without prior written approval".

Below is the documentation for the latest project in which the contractor is requesting more funds. The additional costs are not itemized and no receipts for materials were provided.