The Residential Construction Contract — the Elements Every Document Must Contain
Building or renovating a home takes the form of a works contract, and its foundation is Article 629: under a works contract the contractor undertakes to perform the work provided by the contract, while the client is obliged to pay the contractor the agreed remuneration. Where the work involves making a thing and the contractor makes it from materials he has purchased, he transfers to the client ownership of the thing made; where a generic thing is made, the rules of sale apply. One further practical detail: drawing up a cost estimate connected with the work is not reimbursed unless otherwise provided by agreement — planning and accounting are therefore a separate matter that must be fixed in the contract itself.
Agreeing the Remuneration — Article 630
The question of price is the heart of the contract. Article 630 contains two useful presumptions. First: remuneration is deemed agreed even without words, if according to the circumstances the work is to be expected only for remuneration — building a house is not treated as gratuitous even where the price is not stated in the document. Second: where the amount of remuneration is not agreed, the tariff rate is deemed agreed where a tariff exists, and otherwise the customary remuneration. Nevertheless, in practice the price must always be defined in the document — as a total or per unit — and precisely enough that it never becomes unclear what each sum covered.
Two practical rules stand out in recording the price. The first — the procedure for changes: in construction the price often changes, and each change needs written fixation, so that the final amount is determined not by the parties' recollection but by documents. The second — the basis of calculation: where the remuneration is per unit, the method of measurement must be agreed in advance, because the accounting is written exactly against that measurement. Where tariffs exist they serve as a starting point, but conditions tailored to one's own project are always more precise.
Materials and Liability — Article 646
The source of the materials determines the distribution of liability. If the contractor performs the work with his own materials, he answers for poor-quality materials — the quality of the materials built into the house is his responsibility. Where the client supplies the materials, the contractor answers for their incorrect use, and is obliged to present the client an account of the consumption of materials and to return the remaining materials. For residential construction this means: accounting for the consumption of materials is a statutory duty, not a matter of goodwill. A list of the materials and the distribution of their ownership in the contract is the simplest way to prevent a dispute.
The Duty to Warn — Article 647
One of the contractor's most important duties is the warning: he must timely warn the client that the materials received from the client are of poor quality and unsuitable; that if the client's instructions are followed the work will be unstable or unsuitable; or that other circumstances independent of the contractor threaten the solidity and fitness of the work. If the client, despite the timely warning, does not replace the unsuitable or poor-quality materials within the appropriate period, does not change the instructions given, or does not eliminate the other dangerous circumstance, the contractor may refuse the contract and demand compensation for the damage caused thereby. In home construction this norm regulates the boundary where the owner's plan collides with reality.
Payment and Acceptance — Articles 648 and 649
The sequence of payment and acceptance is also defined by law. Article 648: the client must pay the contractor the remuneration after the completion of the work, unless the contract provides for payment in parts — advance and periodic payments are therefore possible only by contract. Article 649 regulates acceptance: where under the contract or the nature of the work a transfer is required, the client must accept the completed work and pay the remuneration immediately upon acceptance. The work is deemed accepted if the client fails to take it within the period set by the contractor — this rule limits endless deliberation: indefinitely "reconsidering" a house is not allowed by law.
Preparing the Contract — the Lawyer's Role
A good residential construction contract unites six blocks: a description of the work, the remuneration and its calculation, the materials and the accounting for their consumption, the warning procedure, the payment schedule and the rules of handover and acceptance. The norms described above — Articles 629, 630, 646, 647, 648 and 649 — are the legal supports of these blocks, and reflecting them correctly in the contract equalises the parties' expectations. A lawyer builds this document: he describes the work so that the measure of quality is clear, fixes the price and the procedure for changes, and balances in advance the procedures for materials, warnings and acceptance. Such a contract is the best instrument for reducing disputes — because the answer to every question is already in the document.
A final note: a residential construction contract is a living document — its terms are reflected step by step in addenda, acts and correspondence. Good practice is therefore to keep a single file: the contract and all its amendments in one place, with each handover act added to the same file. When a dispute arises, exactly this file becomes the source of evidence, and its completeness decides the fate of the case.