Construction law means all legal topics that are related in one way or another to the construction and demolition of real estate. Construction Law is therefore a very general term covering a wide range of legal areas - both public and private. Whereas a single building process often involves a plurality of legal areas (think of both a permit application and possible approval of an Owners' Association), here we will discuss one specific element: the building contract. What is it exactly, and what purpose does a building contract serve? What are the common problems and challenges with a building contract? And what can HABITAT lawyers do for you?
Building contracts are agreements by which the contractor commits himself to a principal for a work. In other words, the contractor agrees to perform material work for a client - he accepts the order for work. Building contracts are special contracts. This means that this type of commitment has its own regulations in the Civil Code (specifically in Book 7 title 12 art. 750-769). These laws and regulations prescribe some mandatory clauses in building contracts. For example, in many cases when a target price is used, that target price may not be exceeded by more than 10 percent. If extra equipment has to be purchased, is it the contractor who should have foreseen this? Or is it the client who accepted that risk in advance? How additional costs are divided between the client and the contractor of the work is also regulated in the building contract.
Some provisions prescribed by laws and regulations are so-called regulatory law. This means that the principal, the contractor and any subcontractors may deviate from these regulations. Before you deviate from what is prescribed by law, it is often advisable to consult a lawyer who is experienced in building contracts. Other provisions concern mandatory law. These are provisions from which deviation is not always allowed or provisions from which deviation to the detriment of one of the parties is not allowed. These are, for example, provisions in section two of Title 12, Book 7: relating to private commissioning for the construction of a dwelling. Are you dealing with an apparently mandatory provision that is being deviated from, whether unlawfully or not? Then please contact us. Obtaining sound advice in such cases is of great importance.
HABITAT lawyers provides advice on drawing up building contracts. For example, advice on which provisions of the Civil Code may or may not be deviated from or what the risks of a certain method of cost allocation might be. In addition, we can also offer support if an agreement needs to be dissolved or if disputes arise from it. Especially the latter is a common problem; many cases have been filed regarding the execution, suspension or termination of a tender agreement. An example of such a dispute is detailed below.
Disputes may arise from the building contract. Sometimes these have to do with the price to be paid for a structure or a situation in which the structure differs significantly from the stated specifications. But what if the result of a protracted procedure is a stagnation of the building process? Sometimes a request for provisional completion can be made in summary proceedings. In such a case the judge in interlocutory proceedings gave judgment. While proceedings on the merits continued regarding unpaid invoices, liens and proper completion of the construction work, the plaintiff requested the court to order the defendant to finish the house. However, as it was in dispute between the plaintiff and the defendant how exactly the house should be finished, this was too great a risk. In the proceedings on the merits it could still be determined that partial demolition of what had already been built was necessary for proper completion of the construction work. The above case shows that these are often tricky situations. Advice from a lawyer with extensive experience in construction law is therefore of great importance - especially in legal proceedings such as going to court.
Do you need a building contract or are you unsure whether the building contract corresponds to what was agreed? Or has a conflict arisen out of a building contract? We can help. Please feel free to contact us.