Construction Dispute Resolution: Choosing the Remedy
Resolving a construction dispute begins not at the courthouse door but with the question of which legal remedy the customer should choose: termination of the contract, a demand of supplementary performance, or a reduction of the remuneration. The rules of the contract for work in the Civil Code place this choice in a clear frame and set their own conditions and periods for each path. The right choice depends on the character of the flaw, the possibility of curing it, and whether the work retains value for the customer.
The Frame of the Contract for Work
Every remedy is built on the basic construction of the contract for work. Under Article 629 of the Civil Code, by a contract for work the contractor undertakes to perform the work envisaged by the contract, while the customer must pay the contractor the agreed remuneration. Where the work includes the production of a thing from material procured by the contractor, the contractor transfers to the customer ownership of the produced thing, and where a generic thing is produced the rules of sale apply. The preparation of an estimate connected with the work is not reimbursed unless otherwise agreed. This frame determines what the customer demands at all and which condition connects to which remedy.
Termination Because of a Defect
The most radical remedy is termination. Under Article 644 of the Civil Code, because of a defect of the product the customer may refuse the contract in accordance with Article 405 of the Code. In this case the contractor must reimburse the customer's expenses connected with the contract. Termination is justified where the flaw is such that even a corrected work no longer satisfies the customer's interest, and choosing this path often requires observing the rules on the additional period.
Reduction of the Remuneration as an Alternative
Where the work remains usable, the middle path is a reduction of the remuneration. Under Article 645 of the Civil Code, the customer who neither receives supplementary performance after expiry of the period determined for that purpose nor declares refusal of the contract may reduce the remuneration by the amount by which the defect reduces the value of the product. This claim is flexible: it preserves the relationship and at the same time aligns the price with the actual quality.
Limitation Strategy in Defect Disputes
The choice of remedy depends on the regime of time. Under Article 655 of the Civil Code, a claim because of a defect of performance may be submitted by the customer within one year, and a claim concerning a structure within five years from the day of acceptance of the completed work. To this is added the rule of Article 656: where under the contract the work is accepted in parts, the limitation period for a claim because of a defect begins from the day of complete acceptance. In addition, the general regime of contractual claims is defined by Article 129 of the Civil Code: the limitation period for contractual claims is three years, and for claims connected with immovables six years. Analysing the interaction of these periods is an integral part of dispute strategy: the special periods narrow the general ones, and the count begins precisely from them.
The logic of the choice rests on three questions: can the flaw be cured and what would that cost; does the corrected work retain value; and are the periods preserved for submitting the claim. If the flaw is curable and the relationship is valuable, supplementary performance and then a reduction of the remuneration is the reasonable path. If the work loses its interest, termination and reimbursement of expenses remain. Documenting these decisions and controlling the periods is precisely the work that places the dispute on a solid foundation.
Frequently Asked Questions
Below we answer the questions most frequently raised on this topic.
When may I terminate the contract because of a flaw?
Because of a defect of the product the customer may refuse the contract under Article 405 of the Code, and in that case the contractor must reimburse the expenses connected with the contract.
How does the reduction of the remuneration work?
The customer who neither receives supplementary performance after the determined period nor refuses the contract may reduce the remuneration by the amount by which the defect reduces the value of the product.
What periods apply to defect claims?
A defect claim may be brought within one year, and one concerning a structure within five years from acceptance. With acceptance in parts the period begins from complete acceptance. Under the general regime, contractual claims carry three years and claims connected with immovables six years.
What does the customer demand under a contract for work?
The contractor undertakes to perform the envisaged work and the customer must pay the agreed remuneration. Ownership of a thing produced from the contractor's material passes to the customer.
How We Help on Legal.ge
The Legal.ge team resolves construction disputes: we analyse the contract and the subject of the dispute, prepare claims and actions and represent your interests at every instance.
Write to us on Legal.ge — we will assess the prospects of the dispute on the basis of the legislation.
Our team guides construction dispute resolution at the level of strategy: we analyse the spectrum of remedies between termination and reduction, calculate periods under the special one-year and five-year regimes and the general three-year and six-year regimes, and prepare demands and court documents. Contact our specialists so that the route to resolving the dispute is chosen consistently and in time.