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.