The Legal Foundation of Commercial Construction
Commercial construction relationships in Georgia rest on the contract-for-work model regulated by the Civil Code. Under this contract, the contractor undertakes to perform the work provided for by the contract, while the customer is obliged to pay the contractor the agreed remuneration. Article 629 sets out precisely this basic model, and it forms the legal basis of construction contracts in every case where a customer needs a completed result — a built, renovated or reconstructed facility. The rule applies regardless of project scale, from office buildings to warehouses and industrial facilities.
Where the work involves the manufacture of a product and the contractor produces it using material purchased at its own expense, the contractor transfers to the customer ownership of the finished product, and if a generic thing has been manufactured, the rules on sale apply. The question of the cost estimate must also be borne in mind: under Article 629, the preparation of a cost estimate related to the contract for work is not reimbursed unless otherwise agreed by the parties. This rule must be factored into budgeting so that preparatory expenses are allocated in advance rather than becoming a later dispute.
Materials, Quality and Accountability
If the contractor performs the work using its own material, it is liable for poor-quality material — the risk of material quality rests on the party that supplied it. Conversely, the contractor is also responsible for the improper use of the customer's material. Article 646 obliges the contractor to submit to the customer an account of the use of the material and to return the remaining material. In practice, records of material consumption are not a courtesy but a statutory duty, and their absence may weigh against the contractor in a dispute.
The contractor's responsibility extends further to the customer's property. Under Article 650, the contractor is liable for the loss or damage of the customer's property, including in cases of negligence. On a construction site this covers the customer's equipment, goods and existing structures, so organising safe works and protecting the customer's property are direct legal obligations of the contractor.