The Legal Basis of the Relationship with a Contractor
The relationship between a customer and a contractor rests on the general norms of the Civil Code of Georgia. Under Article 319, subjects of private law may, within the limits of the law, freely conclude contracts and determine their content. They may also conclude contracts that are not provided for by law but do not contradict it. This means that the details of a construction or other work contract — deadlines, quality, price, payment schedule — are primarily a matter of the parties' agreement, and a dispute takes shape precisely in the relationship between the text of the contract and the law.
The same article sets the boundaries of freedom of contract: where one party to the contract occupies a dominant position in the market, it bears, in that field of activity, the obligation to conclude contracts and may not groundlessly offer the counterparty unequal terms. And persons who acquire or use property and services for non-entrepreneurial purposes or to satisfy subsistence needs may not be unduly refused the conclusion of a contract, where the other party acts within its entrepreneurial activity — a protection that extends to private customers as well.
Delay and Compensation of Damage
The most common ground of a dispute with a contractor is the deadline. Under Article 404 of the Civil Code, the creditor has the right to demand compensation for damage caused by the exceeding of the term. The application of this norm strengthens the customer's position: if the work was not completed within the period established by the contract, the damage caused by the delay — for example, in the form of temporary relocation, suspended activity or another kind of loss — is subject to compensation.
In preparing this claim the documentation of the damage is decisive: each loss must rest on concrete evidence, because the amount of damage is a contested issue and its substantiation is the claimant's burden. The fact of the delay is established by the contract and the acts of acceptance of the works.
Withdrawal from the Contract and Damage
Article 407 of the Civil Code regulates the consequences of withdrawal from a contract: upon withdrawal the creditor may demand compensation for the damage caused to it by the non-performance of the contract. This rule is not applied where the ground of the withdrawal is not caused by the debtor's fault — that is, where the reason for withdrawal is the creditor's own conduct or a circumstance independent of it, compensation for damage from non-performance can no longer be demanded.
The practical consequence for the customer is clear: if the contractor does not perform the obligation and the customer withdraws from the contract, the withdrawal does not release the contractor from compensating the damage caused by the non-performance. The procedure and formal conditions of withdrawal are established by other norms, and observing them secures the validity of the decision.
Damage for Lost Income
A contractor's non-performance often inflicts on the customer not only an actual loss but also lost income. Under Article 411 of the Civil Code, damage must be compensated not only for the property loss that has actually occurred but also for lost income. Income is considered lost which the person did not receive and which it would have received had the obligation been duly performed.
A claim for lost income requires caution: it must rest on calculable and substantiated bases — indicators of previous periods, concluded contracts or other documentary sources. Such claims are examined critically, and their strength depends solely on the quality of the evidence.
The Customer's Position in the Dispute: Where the Emphasis Lies
The Civil Code does not regulate work contracts in a separate detailed chapter, and the supports of a dispute with a contractor are therefore the general norms of the law of obligations — freedom of contract, damage for delay, the consequences of withdrawal and lost income. The customer's claim in such a dispute is built on three elements: a precise analysis of the content of the contract, the reconstruction of the factual picture of performance, and the substantiation of the damage. The consistent development of these three elements determines the success of the case.
Frequently Asked Questions
Can damage caused by delay be claimed?
Yes — the creditor has the right to demand compensation for damage caused by the exceeding of the term. The claimant must substantiate the amount of the damage.
Does the right to claim damage survive withdrawal from the contract?
Yes — upon withdrawal the creditor may demand compensation for the damage caused by non-performance, unless the ground of withdrawal was not caused by the debtor's fault.
What is lost income?
Income which the person did not receive but would have received had the obligation been duly performed. Damage is compensated both for the actual loss and for lost income.
May a contractor groundlessly be offered unequal terms by a dominant party?
No — a party occupying a dominant market position bears the obligation to conclude contracts and may not groundlessly offer the counterparty unequal terms.
How free is the content of the contract?
Within the limits of the law the parties freely determine the content of the contract and may conclude a contract not provided for by law, provided it does not contradict the law.
How We Help on Legal.ge
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