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.