The structuring of construction contracts should be understood within the parameters of Articles 872 to 896 of the Civil Code that sets out the minimum rights and responsibilities of employers, contractors and consultants engaged in what is known as muqawala, being a contract to make a thing or to perform a task.
PART THREE. LABOUR CONTRACTS
Chapter One. Contract For Work
Section I: Definition And Scope
Contract for work is one by virtue of which one of the parties undertakes to do a piece of work in consideration of a remuneration which the other party undertakes to pay.
1. The contractor may undertake to supply the work only, the master of the work being responsible for the supply of materials which the contractor uses in or for the performance of his work.
2. The contractor may undertake to supply the material and the work as well.
In a contract for work, the location, the kind of work, its quantity, the way it should be performed and the duration of work must be described and the remuneration fixed.
Section II: Effects of Contracting
1. Contractor’s Liabilities
1. In case the master sets forth as a condition that the contractor has to provide all or part of the materials, he is responsible for its good quality as provided for in the contract, if any, otherwise in conformity with the current custom.
2. When the materials are supplied by the master, the contractor is bound to care for their preservation, observe in his work the technical requirements and to return to their owner whatever left of it; otherwise he shall warrant against perishing, defect or loss thereof.
In the absence of an agreement or trade custom to the contrary, the contractor shall provide, at his own expense, the tools and accessories he needs to perform his work.
The contractor shall perform his work according to the conditions of the contract. If it is established that he is fulfilling his obligations in a manner that is defective or contrary to the agreement, the master may ask the immediate rescission of the contract, if remedying the situation is impossible, otherwise the master may summon the contractor to abide by the terms of the contract and rectify, within a reasonable time, the manner in which he is performing the work. If at the expiration of the fixed delay, the contractor fails to comply with this requirement, the master may ask the judge the cancellation of the contract or authorize him to hand over the completion of the work to another contractor at the expense of the first contractor.
The contractor shall warrant the results of his act and work against prejudice or loss whether or not caused by his trespassing or negligence. There is no warrant if this occurs from an accident that could not be avoided.
1. If the contractor’s work shall produce some effects on the property, he may have a lien over it until he receives the remuneration due to him, and if it perishes in his possession prior to payment of the remuneration, he shall neither be liable to warrant nor entitled to remuneration.
2. If his work shall not have any effect on the property itself, she shall have no right to detain it in payment of his remuneration and if he does so he shall be liable to warrant against his unlawful act.
1. If the object of the contracting contract was the erection of buildings or other fixed constructions that the architect has designed, to be executed by the contractor, under his supervision, they shall be jointly liable, for a period of ten years or a longer agreed period, to indemnify the master of work for total or partial destruction of these buildings or fixed constructions and for every defect endangering the solidity and security of the building; all this unless the two contracting parties agreed that these constructions are meant to stay for less than ten years.
2. This obligation to indemnify shall remain in effect even if the defect or the destruction is due to a defect in the ground itself, and even if the master authorized the erection of the defective buildings or fixed constructions.
3. The ten year period shall start as of the time of delivery of the work.
If the architect’s work is limited to the preparation of the plans without being entrusted with the supervision of their execution, he shall be responsible only for defects in the plans.
Any clause tending to exonerate or limit the warranty of the contractor or the architect is void.
Court action on the warranty may not be heard after three years from the occurrence of the destruction or the discovery of the defect.
2. Obligations of the Master
The master must take delivery of the completed work as soon as the contractor completes it and places it at his disposal. If the master, in spite of being formally summoned, fails without reasonable cause to take delivery, and the work perishes in the hands of the contractor or becomes defective, without any trespassing or neglect from the latter, he shall not be bound to warrant.
The master is bound to pay the remuneration for the work upon taking delivery of the work contracted, unless otherwise agreed or practiced by custom.
1. When a contract is concluded in accordance with an estimate drawn up on a unit price basis and it becomes evident, during the course of the work, that it will be necessary to complete the work, according to the agreed plan, to considerably exceed the estimated price, the contractor is bound to notify the master forthwith of the matter stating the anticipated increase in price. If he fails to do so, he shall forfeit his right to recover the expenses incurred in excess of the estimate.
2. If the estimated excess in the price for the execution of the plans is considerable, the master may release himself from the contract and stop the execution without delay and pay the contractor the cost of the works done by him estimated in accordance with the terms of the contract.
1. When a contract is concluded on a lump sum basis according to an agreed plan, the contractor has no claim to an increase in price required for the execution of the plan.
2. If a modification or addition is made to the plan, with the consent of the master, the current agreement with the contractor, as regards such a modification or addition, shall be observed.
If the contract did not specify a price for the work, the contractor shall be entitled to the price for similar works, in addition to the cost of the materials provided by him as required by the works.
1. If there were no agreement as to the remuneration of the architect, who made the plans for the building and supervised their execution, he shall be entitled to the remuneration payable for similar work, in accordance with the current custom.
2. If happens what impedes the completion of the work’s execution, according to the design he has prepared, he shall deserve the wage according to what he has performed.
Section III: Sub-Contracting
1. The contractor may entrust the execution, of the whole or part of the work, to a subcontractor unless he is precluded from so doing by a clause in the contract, or unless the nature of the work requires that he executes the work in person.
2. The contractor, in such a case, shall remain responsible towards the master of the work.
The subcontractor may not have a claim against the master, as regards the dues of the first contractor, unless the latter refers him to the master.
Section IV: The End of a Contract for Work
The contract for work shall come to an end by completing or by rescission of the contract by mutual agreement or by order of the court.
When an excuse arises that prevents the execution of the contract, or the completion of its execution, any of the contracting parties may ask for its rescission or termination, as the case may be.
If the contractor has started the execution of the work and then became unable to accomplish it, for a reason beyond his control, he shall be entitled to value of the completed work, in addition to the expenses disbursed for its execution to the extent of the benefit that the masters derives from such work.
The party prejudiced from rescission may claim compensation from the other party within the limits allowed by custom.
1. A contract for work is dissolved by the death of the contractor, if it was agreed that he executes the work in person or if his personal skill was taken into account in the contract.
2. If the contract does not include such provision, or if such personal skill was not taken into account in the contract, the master may ask for the rescission of the contract in case the heirs do not offer the necessary qualifications for the proper execution of the works.
3. In both instances, the value of the completed works and the expenses incurred shall devolve to the heirs in accordance with the contract and what is required by custom.