REALWorld Law

Construction

Parties to a construction or engineering contract

Typically, who are the parties to an engineering or construction contract or package of contracts and who is responsible to whom?

Angola

Angola

The main parties involved in a construction project are:

Owner (Dono da obra)

This is the party procuring the work (typically, a landowner or developer).

Contractor (Empreiteiro)

A main building contractor is engaged by the owner to carry out and complete the works. This contractor will usually, in turn, engage sub-contractors to carry out and complete separate parts of the works. The contractor may also take on responsibility for design (either directly or through a sub-contractor).

Designer (Projectista)

The engineer or architect in charge of drawing up the plans and specifications for the implementation of the development.

Australia

Australia

The main parties involved in a construction project are:

Employer/client/principal

This is the party procuring the work (typically, a land owner or land developer). In relation to building contracts, this entity is usually referred to as the employer or the principal. In relation to the contracts of appointment of the professional consultants, this party is commonly referred to as the client.

Contractor

A main building contractor is engaged by the employer to carry out and complete the works. This contractor will usually, in turn, engage sub-contractors to carry out and complete separate parts of the works. Contractors may also take responsibility for the design of all or part of the works they are to execute, depending on the procurement method and contract used.

Financier

This is the term used to describe the banks and other institutions and parties (for example, government or charitable organizations in the case of urban regeneration, infrastructure and cultural/sports projects) who provide finance to the employer towards the development (and require security in return). Depending on the size of the project, there might be a single bank or a syndicate of banks.

Belgium

Belgium

A construction contract is generally concluded between a contractor and the client or principal. The parties to an engineering contract are the engineer and can be the client or principal, or even the main contractor or architect.

The relationship between the principal and the engineer or contractor is in essence contractual in nature, implying that the parties are free to contractually determine each other’s rights and obligations, subject to applicable mandatory laws.

In principle, the client or principal must enable or authorize his co-contractor (being the engineer or contractor) to carry out the work. Furthermore, the principal must accept or approve the work and will be required to pay the agreed price.

The engineer or the contractor must carry out the work in accordance with:

  • The contract
  • The applicable law(s) and regulations
  • The state of the art

Unless explicitly prohibited by the contract, the engineer or the contractor can work with sub-contractors. In such a situation, the engineer or contractor will bear full responsibility towards the principal for the execution of the work.

An architect will be responsible to the principal and will come under the control of the contractor during the execution of the works. The architect will also have the assistance of the principal at the point of acceptance or approval of the work.

Bosnia-Herzegovina

Bosnia-Herzegovina

These types of contract are governed by the Law on Obligations and are concluded between the client (ie the developer) on one side, and the general contractor, on the other side. The general contractor is responsible to the developer.

Canada

Canada

Depending on the type of project, and the project delivery method selected by the owner, the main parties to a construction or engineering contract include the following:

Owner

A party who owns or develops a project, engages parties to design and construct the project, and compensates those parties for their services and work.

Architect or engineer

A party engaged by the owner to design the project. An engineer is required to design and engineer specialized projects, such as public works (ie bridges, highways) or plants (ie manufacturing facilities, utilities).

General contractor and subcontractor

A general contractor is a party engaged by the owner to construct the project. The general contractor typically hires subcontractors to perform and complete separate parts of the project. Those subcontractors, in turn, may hire sub-subcontractors to perform a portion of the part of the project for which the subcontractor is responsible.

Design-builder

A party engaged by the owner to design and construct the project. A design-builder takes responsibility for both the design and construction functions, either with respect to the entire project or a portion of the project.

Consultant

A party engaged by the owner, architect, engineer or contractor to render professional assistance regarding a particular aspect of the work. For example, an architect might hire a specialty engineer; a contractor might hire a remediation consultant; a design-builder might hire an MEP (mechanical-electrical-plumbing) engineer; an owner might hire a construction manager to oversee the entire project or a professional to provide expertise regarding a specialized project, such as a water park, golf course, or manufacturing facility. Several consultants may render professional services on a single project, each engaged by and responsible to a different party.

Supplier

An entity from whom materials are obtained that will become part of the project; for example, those who supply the steel, cement, wood, glass, tiles, and electrical and plumbing fixtures.

China

China

The main parties involved in a construction project are:

Customer/employer

This is the party procuring the work (typically, a land owner or land developer). In relation to construction project contracts, this entity is usually referred to as the 'employer'. In relation to contracts for works, this party is commonly referred to as the 'customer'. The employer under a construction project contract must be a legal person rather than a natural person (otherwise the agreement becomes a contract for works)

Contractor

A main building contractor is engaged by the employer to carry out and complete the works. This contractor will usually, in turn, engage sub-contractors to carry out and complete separate parts of the works. Contractors may also take responsibility for the design of all or part of the works they are to execute depending on the procurement method and/or contract used.

Croatia

Croatia

Employer/client

This is the party procuring the work (typically, a land owner or land developer).

Project designer

The project is made by the project designer, who may not be an employee of the contractor. If the main project provides for project supervision, the investor has to entrust the project designer with the project supervision of the works.

Contractor

A main building contractor is engaged by the employer to carry out and complete the works. This contractor will usually, in turn, engage sub-contractors to carry out and complete separate parts of the works. Contractors may also take responsibility for the design of all or part of the works they are to execute depending on the procurement method and/or contract used.

Supervising engineer

The investor has by law to appoint a supervising engineer who shall supervise the works on behalf of the investor. The supervising engineer has to be either an authorized architect or an authorized engineer.

Reviser

The main project has to be revised by a reviser, who may not be a person participating in the development of the main project.

Czech Republic

Czech Republic

The main parties involved in a construction contract are:

Client/employer

This is typically the land owner or developer.

Contractor

A contractor is engaged by the client/employer to carry out and complete the works. This contractor will usually engage sub-contractors to carry out and complete separate parts of the works. Contractors design all or part of the works depending on the procurement method or contract.

Professional team

The team of professional consultants.

Financier

This is the term used for the bank or other institution or party (for example a government or charitable organisation in the case of urban regeneration, infrastructure or a cultural or sport-related project) which provides finance to the employer for the development.

Denmark

Denmark

The main parties involved in a construction project are:

Employer/client

The party procuring the work. In building contracts this party is referred to as the 'employer'.

Contractor

Typically a main building contractor is employed to carry out and complete the work for the employer/client. Contractors may also take responsibility for the design of all parts of the works and often engage sub-contractors to carry out and complete separate parts of the work.

Where there are faults or defects in the construction the contractor can incur liability to remedy the defects after delivery. This follows from the AB 92 and from the basic principles of contract law to the effect that the employer has a right to have the contract performed.

Designers

Typically, a main building contractor is employed to carry out and complete the work for the employer/client. Contractors may also take responsibility for the design of all (turnkey contractor) or parts of the works and often engage sub-contractors to carry out and complete separate parts of the work.

Where there are faults or defects in the construction the contractor can incur liability to remedy the defects after delivery. This follows from ABT 18/AB 18 and from the basic principles of contract law to the effect that the employer has a right to have the contract performed.

Non-designers

Contract administrator, project manager, etc.

France

France

The main parties involved in a construction project are:

Owner/client (maître d'ouvrage)

This is the party procuring the work (typically, a landowner or developer). In relation to building contracts, this entity is usually referred to as the 'owner'.

Contractor (entrepreneur)

A main building contractor is engaged by the owner to carry out and complete the works. This contractor will usually, in turn, engage sub-contractors to carry out and complete separate parts of the works. It is also possible for the owner to enter into several contracts, each contractor being responsible for part of the works.

Architect (maître d'oeuvre)

The architect is the party in charge of drawing up the plans, and is responsible for the implementation of the project.

Funder

This is the term used to describe the banks who provide finance to the owner.

Germany

Germany

Principal

The instructing party who develops the construction project.

General contractor (Generalunternehmer)

A contractor who has to provide all construction works and services to produce the entire building project and to perform the main part of the construction work itself.

Prime contractor (Generalübernehmer)

A contractor who must provide all construction works and services required for the entire building project but only performs minor works or no work at all itself: most of the work is performed by third parties (sub-contractors).

General planner and general contractor / general planner and prime contractor

A general or prime contractor who must not only provide all construction works but also all the planning work required for the construction project at the point the contract is entered into.

Sub-contractor (Subunternehmer)

A contractor assigned by the general or prime contractor to perform parts of the construction works; sub-contractors may again contract other sub-contractors (sub-subcontractors) etc.

Architect (Architekt)

The party responsible for all matters relating to the planning and implementation of the building project, in co-operation with contractors, engineers and technical specialists, the architect develops the project and brings it to completion. At the same time the architect can be regarded as an agent promoting the interests of the principal. 

The principal has no direct contractual claims against any subcontractor. Claims must always be asserted down the contract chain. The contractor may, however, assign his contractual claims against the subcontractors to the principal.

The principal may conclude the contract with a single contractor or with a consortium (ARGE), ie several companies. Whereas a single contractor is generally engaged for small construction projects or for the performance of some parts of larger construction projects, a consortium is normally involved for larger projects.

Hong Kong

Hong Kong

The main parties involved in a construction project are:

Employer/client

This is the party procuring the work (usually a land developer). With respect to building contracts, this entity is usually referred to as the 'employer'. In relation to the contracts of engagement of professional consultants, this party is usually referred to as the 'client'.

Main contractor / subcontractors

The employer will usually enters into a contract directly with the main contractor, who will then be responsible directly to the employer for building the project in accordance with the plans, specifications, and the laws. Main contractors seldom employ a large standing workforce. Instead, they subcontract separate parts of the construction works to different subcontractors.

Professional team

The team of professional consultants usually appointed are as follows.

Authorized Person (AP)

The role of an AP is governed by the provisions of the Buildings Ordinance (Cap. 123 of the Laws of Hong Kong). An AP may be an architect, engineer or surveyor by profession. An employer who wishes to carry out building works or street works must appoint an AP as the co-ordinator of such works. All plans submitted to the Buildings Department for approval must be prepared and signed by the AP.

Registered Structural Engineer (RSE)

The role of an RSE is also governed by the provisions of the Buildings Ordinance. An RSE must be a structural engineer. An employer who wishes to carry out building works or street works, must also appoint an RSE for the structural elements of such works. Plans relating to foundation or containing structural details or calculations are usually prepared and signed by the RSE.

Architect

Any person in Hong Kong involved in the design construction or fitting out of buildings and describing himself as an ‘architect’, ‘registered architect’ or ‘RA’ must be registered under the Architects Registration Ordinance (Cap. 408 of the Laws of Hong Kong). As well as being responsible for the design of the work on an ongoing basis, the architect is often also appointed under many standard forms of building contract, as contract administrator. Frequently, the architect is also the authorized person who has to ensure compliance with planning requirements and building regulations, and to supervise and monitor works.

Engineer

A person is not entitled to describe himself as a ‘registered professional engineer’ or to use the initials ‘RPE’ with or without a qualifying discipline unless he is registered under the Engineers Registration Ordinance (Cap 409 of the Laws of Hong Kong). The nature of the construction contract will determine which area of specialization or discipline the engineer will require (eg structural, electrical and mechanical or geotechnical) and the manner in which he is employed (eg independently by the employer or as a consultant to the architect).

Quantity surveyor

A person is not entitled to describe himself as a ‘registered professional surveyor’ or to use the initials ‘RPS’ with or without qualifying divisions unless he is registered under the Surveyors Registration Ordinance (Cap 417 of the Laws of Hong Kong). A quantity surveyor’s role has traditionally involved measuring and valuing work, both prior to the commencement of construction (ie assembling bills of quantities for the employer or pricing bills of quantities for the contractor) and during the course of construction. The surveyor’s role has now also been extended under some contracts to advise architects or engineers on the amount payable under interim or final certificates.

Project manager

Where a project manager is appointed in a large construction project, his role is to organize and coordinate the activities of the contractor and the professional team (ie architect, engineer, quantity surveyor, etc). The precise scope of these obligations will depend upon the terms of his appointment and the nature of the construction project.

Funder

This is the term used to describe the banks and other institutions and parties (for example, government or charitable organizations in the case of urban regeneration, infrastructure and cultural/sports projects) who provide finance to the employer towards the development


Hungary

Hungary

The typical parties are:

Employer or client

The party procuring the works being either the owner of the real property or a developer.

Contractor

The party engaged by the employer/client to carry out the works. In practice, the contractor (also known as the main contractor) usually engages sub-contractors.

Sub-contractors

The parties engaged by the (main) contractor to carry out separate parts of the works.

Architect/engineer

A professional consultant who is sometimes appointed to act as a third-party certifier in relation to completion of the works.

Project manager

Usually involved in more complex projects where his main tasks are to coordinate all parties involved and enter into contracts on behalf of the developer.

Technical manager

Employed by the Contractor, his or her main roles are to coordinate and manage the construction works on site and to ensure that the works are in full compliance with the applicable laws and regulations.

Financing bank

Banks or other financial institutions providing finance to any of the parties.

Project fund manager

Involved if the works are subject to ‘project fund management’ under the Construction Act (Act LXXVIII of 1997), the project fund manager distributes the funds provided by the client to the contractor, monitors the invoicing and payment of contractors’ fees within the subcontractor chain and through various tools ensures that all subcontractors are paid for approved performance.

Ireland

Ireland

In general,the parties to a construction contract are:

Employer/client

This is the party procuring the work (typically, a land owner or land developer).

Contractor

This is the main building contractor  engaged by the employer to carry out and complete the works. Depending on the project procurement method, the contractor may be responsible for merely the workmanship and materials (ie the build), or the design and the build.

Subcontractors

Subcontractors are engaged by the contractor to carry out and complete separate parts of the works. Some may also have design roles, for example, mechanical and electrical contractors.

Professional consultants

The team of professional consultants for a project are generally as follows:

  • Design role:
  • Architect
  • Design Certifier
  • Assigned Certifier
  • Civil and Structural Engineer
  • Mechanical and Electrical Engineer
  • Fire Safety Engineer and DAC Consultant

Other:

  • Quantity Surveyor
  • Planning ConsultingProject Manager
  • Heritage/Archaeology Consultant
Italy

Italy

The main parties involved in a construction project are:

  • the client – this can be a developer or an owner
  • the contractor – this is the party that carries out the works. A contractor can engage sub-contractors to meet its obligations, and
  • the designer – this is the party that has taken on the obligation to design the works and the method of construction for the works

To appoint the most suitable construction professional for a specific project, the client generally either:

  • calls for a tender – all the interested contractors submit offers to the client who, after a proper evaluation, chooses the offer that, all other things being equal, is the best economically; (the client then enters into the construction contract with the appointed contractor), or
  • directly appoints a construction contractor it trusts and negotiates the terms and conditions of the construction contract
Japan

Japan

The main parties involved in a construction contract are a building owner and a construction company.  Designers and other professionals are sometimes retained directly by an owner and sometimes by a main construction company.  In most large-scale constructions, sub-contractors and/or a construction joint venture is used.  In the case of sub-contract, master-contractor is usually responsible for all of sub-contractors' work.  

Netherlands

Netherlands

The main parties involved in a construction project are:

Client

This can be a developer or an owner.

Contractor

This is the party that carries out the works. A contractor can engage sub-contractors to meet its obligations.

Structural engineer

This is the party that has taken on the obligation to design the method of construction for the works.

Architect

This is the party that must design the works.

Construction supervisor

This is the representative of the client on the construction site. The construction supervisor inspects the works on behalf of the client.

Nigeria

Nigeria

Generally, the nature and size of a construction project will to a large extent determine the parties to the contract for the project and the responsibilities. The main parties involved in a construction contract are:

Employer/Client

The employer/client is the party procuring the work, conceives the idea and employs the contractors and consultants to undertake the works for the project. He is responsible for procuring funding and obtains relevant permits for the project. The employer is obliged to ensure that the Contractor is qualified. 

Contractor

The Contractor in a construction project undertakes and completes the works in accordance with statutory requirements, the contract drawings and contract bills and may engage with sub-contractors for separate parts of the works. The contractor is independent and not under the control of the employer. 

The Architect

The Architect is the party responsible for the preparation of the designs or drawings for the construction project and supervising the implementation on the employer’s behalf. 

The Quantity Surveyor

The Quantity Surveyor is responsible for costing (Bill of Quantities) and adjustments to the pricing in the course of the construction work. 

Civil/Structural Engineers

They are engaged in the designing of the projects working closely with the Architect to ensure structural integrity of the construction project. 

Other Subcontractors

Other subcontractors and Suppliers of specific services under the supervision and control of the Contractor.

Norway

Norway

The main parties involved in a construction project are:

Employer/client

This is the party who procures the work (typically, a land owner or land developer). In relation to building contracts, this entity is usually referred to as the 'employer'. In relation to contracts of appointment of the professional consultants, this party is commonly referred to as the 'client'.

Contractor

A main building contractor is engaged by the employer to carry out and complete the works. The contractor will usually, in turn, engage sub-contractors to carry out and complete separate parts of the works. Contactors may also take responsibility for the design of all or part of the works they are to execute, depending on the procurement method and/or contract used. The contractor is responsible to the employer.

Consultants

A team of professional consultants, including different engineers, architects and a project manager. The consultants are responsible to either the employer or the contractor, depending on which of the two has responsibility for the design.

Funder

This is the term used to describe the banks and other institutions and parties (for example, government or charitable organizations in the case of urban regeneration, infrastructure and cultural/sports projects) who provide finance to the employer to assist with the development (and who will require security in return). Depending on the size of the project, there may be a single bank or a syndicate of banks.

Poland

Poland

In a construction project the following entities are usually involved:

Employer

The party procuring the work and typically a land owner or land developer.

Contractor

Engaged by the employer to carry out and complete the works.

Professional team

Comprising architects, civil and structural engineer and project manager.

Lender

Provides finance to the employer towards the development for example a bank. Depending on the size of the project, there might be a single bank or a syndicate of banks.

Portugal

Portugal

The main parties are the employer and the contractor. The contractor may be responsible for both construction and engineering services (either directly or through a sub-contractor) or just for the construction. If the employer contracts the construction and the engineering services to the contractor, the latter will be the sole responsible towards the employer. On the other hand, if the engineering services are let directly by the employer, the contractor will have no contractual relationship with the engineering company and, therefore not be responsible for providing those services. The construction has to be carried out in accordance with the employer's specifications.

Romania

Romania

The parties to such a contract are:

Client/employer

This is the beneficiary of the construction works, usually the owner of the land or an investor. The employer gives the contractor the right of access to, and possession of, all parts of the site. The employer (where he is in a position to do so) provides reasonable assistance to the contractor at the request of the contractor in order to obtain all the necessary authorizations and permits.

Contractor

This is the person empowered by the client to perform the construction works at his own risk. The contractor designs (to the extent specified in the contract), executes and completes the works in accordance with the contract, and remedies any defects in the works. The contractor is responsible for the adequacy, stability and safety of all site operations and of all methods of construction used.

Engineer

This is the person appointed by the employer to supervise the construction works. Subject to the specific conditions of the construction contract, the engineer is generally required to obtain the approval of the employer before exercising any specific authority. The engineer may from time to time assign duties and delegate authority to assistants, and may also revoke that assignment or delegation.

Site manager

This is the person authorized by the State Inspectorate for Construction as required by the law to perform various activities such as: verifying the quality of the construction materials, the proper performance of the construction works and the fulfilments of all the requirements imposed by the law.

Lender

Usually the lender, namely, the institution providing financial support for the project, will not be a party to the construction contract.

Russia

Russia

Investor

The party procuring and financing the work under an agreement with the developer and eventually acquiring title to the development (or the relevant part of the development) after the construction is completed. There are several types of contract that may be concluded between the investor and the developer, including a shared construction contract, a sale and purchase agreement, a preliminary sale and purchase agreement etc.

Developer (zastrojshchik)

The party that possesses the relevant rights to the plot of land in question, to whom the main construction and operation permits are issued. As a rule, this party obtains initial title to the development.

Project Manager (zakazchik)

Usually the party engaged by the developer who is responsible for arranging the entire process of construction and is authorized by the developer to perform all activities necessary to put the development into operation, including mobilizing other parties.

Designer

The party engaged by the developer or the project manager responsible for drawing up the design documentation, including liaising with the relevant authorities to facilitate the state expert review of the design documentation.

Contractor

A general contractor is engaged by the developer or the project manager to carry out and complete the works. The general contractor will usually, in turn, engage sub-contractors to carry out and complete separate parts of the works. The general contractor may also take responsibility for the design of all or part of the works they are to carry out depending on the procurement method and/or contract used.

Funder

This is the term used to describe the banks or other institutions (for example, government or charitable organizations in the case of urban regeneration, infrastructure and cultural/sports projects) who provide finance to the developer/investor for the development (and require security in return). Depending on the size of the project, there might be a single bank or a syndicate of banks. In the second case the Federal Law "On consortium loan" N 486-FZ dated 31 December 2017" shall apply.

Slovak Republic

Slovak Republic

The main parties involved in a construction project are:

  • Employer/client: This is the party who will procure the work (typically, a land owner or developer). In relation to building contracts, this party is usually referred to as the 'employer'. Where the employer is a public authority, it is referred to as the 'public procurer' or the 'contracting authority'.
  • Contractor: A main building contractor is engaged by the client to carry out and complete the works. The contractor will usually then in turn engage subcontractors to carry out and complete parts of the works. Contractors may also take responsibility for the design of all or part of the works they are to execute, depending upon the procurement method and/or contract used.
  • Funder: This is the term used to describe the banks and other institutions and parties (for example, government, or charitable organizations in the case of urban regeneration, infrastructure and cultural/sports projects) who provide finance to the client to fund the development. The funder will require security in return for the financial assistance. Depending upon the size of the project, the funder may be a single bank or a syndicate of banks.
Spain

Spain

The Spanish Building Act lists the main parties involved in a construction project, who will also be the parties to the various contracts involved, as follows:

Developer (promotor)

The party carrying out the project and procuring the work (typically, a landowner or professional developer).

Architect or engineer (proyectista)

The party who prepares the plans and specifications for the implementation of the development.

Contractor (constructor)

The contractor engaged by the developer to carry out and complete part or all of the works. This contractor will usually, in turn, engage sub-contractors to carry out and complete specific parts of the works. One main contractor or various contractors may be involved in the works depending on the development and the contract procurement method used.

Works managers (director de obra and director de ejecución de obra)

Responsible for the implementation of the project and very important from a practical point of view and in relation to the construction agreement, as the completion of any part of the works must be certified by the works manager.

Conformity assessment technicians (organismo de control técnico)

These technicians assess whether the works comply with technical regulations. They must be involved in the construction process for the relevant building to obtain decennial insurance (a 10-year insurance policy giving cover against defects arising in the works).

Sweden

Sweden

The contractor and the employer are typically the two parties to an engineering or construction contract. Other professional consultants are used to design engineering works and produce drawings.

Thailand

Thailand

The following parties are generally involved in construction contract:

Employer

This is a party procuring or instructing the construction of the building by a contractor (commonly referred to the project owner or project developer).

Main Contractor and Sub-contractor

A main contractor is hired to carry out all construction works involved in the building in accordance with the construction contract and is directly liable to the Employer in the event of any dispute which occurs in relation to the construction of the building. Most main contractors usually engage a sub-contractor to carry out certain parts of the construction works. The sub-contractor will be directly liable to the main contractor in the event of any dispute which occurs in relation to the construction of the building.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

The main parties involved in a construction project are normally:

  1. Employer/client
  2. Contractor
  3. Funder
  4. Architect (or engineer) of record

    All construction projects require an architect of record by law. The architect of record (as well as the contractor) is named on the building permit. A consultancy firm needs a special licence in order to act as an architect of record.

    All submissions for permits are made in the name of the architect of record, whether the architect of record prepared the application (and any designs in them) or not. Under the Abu Dhabi specific building law, an architect of record is liable in certain circumstances for defects in the design of the works (regardless of whether the architect of record prepared the designs or not) and for defects in the construction of the works (on the basis that the architect of record is expected to have supervised the construction of the works, whether or not the architect of record, or another consultant, in fact supervised construction).
  5. Professional team

The team of professional consultants appointed can be broken down into two categories, the principal consultants being as follows:

Designers
Non-designers
Architect Quantity surveyor
Civil and structural engineer Contract administrator (or Engineer under FIDIC-based contracts)
Mechanical and electrical (or building services) engineer Project manager (usually in larger projects only)

 

United Arab Emirates - Dubai

United Arab Emirates - Dubai

The vast majority of projects in the UAE have been delivered using the traditional construct only contract method. This means that the parties designing and constructing the works are engaged under separate contracts.

The main parties involved in a construction project are as follows:

Employer/client

This is the party procuring the work (typically, a land owner or land developer). In relation to building contracts, this entity is usually referred to as the 'employer'. Generally regarding contracts of appointment of professional consultants, the party is commonly referred to as the 'client'.

Contractor

A main building contractor is engaged by the employer to carry out and complete the works. This contractor will usually, in turn, engage sub-contractors to carry out and complete separate parts of the works.

Professional team

The team of professional consultants appointed can be broken down into two categories, the principal consultants being as follows:

Designers
Non-designers
Architect of record Quantity surveyor
Civil and structural engineer Contract administrator
Mechanical and electrical (or building services) engineer Project manager (usually in larger projects only)

Financier

This is the term used to describe the banks and other institutions and parties (for example, government organisations in the case of urban infrastructure and cultural/sports projects) who provide finance to the employer towards the development (and require security in return). Depending on the size of the project, there might be a single bank or a syndicate of banks.

UK - England and Wales UK - England and Wales

UK - England and Wales

The main parties involved in a construction project are:

Employer/client

This is the party procuring the work (typically, a land owner or land developer). In relation to building contracts, this entity is usually referred to as the ‘employer’. In relation to the contracts of appointment of the professional consultants, this party is commonly referred to as the ‘client’.

Contractor

A main building contractor is engaged by the employer to carry out and complete the works. This contractor will usually, in turn, engage subcontractors to carry out and complete separate parts of the works. Contactors may also take responsibility for the design of all or part of the works they are to execute depending on the procurement method and/or contract used.

Professional team

The team of professional consultants appointed can be broken down into two categories, the principal consultants being as follows:

Designers Non-designers
Architect Quantity surveyor
Civil and structural engineer CDM co-ordinator (who performs a statutory health and safety role)
Mechanical and electrical (or building services) engineer Contract administrator
Principal Designer (a designer who performs a health and safety role under the CDM Regulations 2015) Project manager (usually in larger deals only)
  Building Information Modelling (BIM) Manager (required for public sector projects)

Funder

This is the term used to describe the banks and other institutions and parties (for example, government or charitable organizations in the case of urban regeneration, infrastructure and cultural/sports projects) who provide finance to the employer towards the development (and require security in return). Depending on the size of the project, there might be a single bank or a syndicate of banks.

UK - Scotland

UK - Scotland

The main parties involved in a construction project are:

Employer/Client

This is the party procuring the work (typically, a land owner or land developer). In relation to building contracts, this entity is usually referred to as the 'employer'. In relation to the contracts of appointment of the professional consultants, this party is commonly referred to as the 'client'.

Contractor

A main building contractor is engaged by the employer to carry out and complete the works. This contractor will usually, in turn, engage subcontractors to carry out and complete separate parts of the works. Contactors may also take responsibility for the design of all or part of the works they are to execute depending on the procurement method and/or contract used.

Professional team

The team of professional consultants appointed can be broken down into two categories, the principal consultants being as follows:

Designers

Non‑designers

Architect

Quantity Surveyor / Cost Consultant

Civil and structural engineer

Principal Designer (who performs a statutory health and safety role under the CDM Regulations)

Mechanical and electrical (or building services) engineer

Contract Administrator / Employer’s Agent (who administers the building contract)

 

Project Manager (usually in larger projects only)


Funder

This term is used to describe the banks and other institutions and parties (for example, government or charitable organizations in the case of urban regeneration, infrastructure and cultural/sports projects) who provide finance to the employer towards the development (and require security in return). Depending on the size of the project, there might be a single bank or a syndicate of banks.

Ukraine

Ukraine

The main parties to a construction or engineering contract in Ukraine are:

  • Developer – the party procuring the work and having rights to the relevant plot of land, and
  • Contractor – the party carrying out construction or engineering works

If the parties use a single general contract, a contractor may sub-contract the performance of separate works. The general contractor remains responsible to the developer for the carrying out of all works, including those carried out by sub-contractors. The parties are also entitled to enter into a multilateral construction/engineering contract.

United States

United States

Depending on the type of project, and the project delivery method selected by the owner, the main parties to a construction or engineering contract include the following:

Owner

A party who owns or develops a project, engages parties to design and construct the project, and compensates those parties for their services and work.

Architect or engineer

A party engaged by the owner to design the project. An engineer is required to design and engineer specialized projects, such as public works (eg bridges, highways) or plants (eg manufacturing facilities, utilities).

General contractor and subcontractor

A general contractor is a party engaged by the owner to construct the project. The general contractor typically hires subcontractors to perform and complete separate parts of the project. Those subcontractors, in turn, may hire sub-subcontractors to perform a portion of the part of the project for which the subcontractor is responsible. A phrase commonly used to describe the subcontractor and its sub-subcontractors is ‘subcontractors of any tier’.

Design-builder

A party engaged by the owner to design and construct the project. A design-builder takes responsibility for both the design and construction functions, either with respect to the entire project or a portion of the project.

Consultant

A party engaged by the owner, architect, engineer or contractor to render professional assistance regarding a particular aspect of the work. For example, an architect might hire a specialty engineer; a contractor might hire a remediation consultant; a design-builder might hire an MEP (mechanical-electrical-plumbing) engineer; an owner might hire a construction manager to oversee the entire project or a professional to provide expertise regarding a specialized project, such as a water park, golf course, or manufacturing facility. Several consultants may render professional services on a single project, each engaged by and responsible to a different party.

Supplier

An entity from whom materials are obtained that will become part of the project; for example, those who supply the steel, cement, wood, glass, tiles, and electrical and plumbing fixtures.

While not parties to the design or construction contract or any subcontract, the following are key parties in the process:

Lender

An entity providing funds to the owner for the project, which funds the owner must repay. Depending on the size of the project, a single bank or a syndicate of banks could loan the owner funds.

Legal counsel

The lawyers assisting each of the parties above with the negotiation and drafting of the contracts. In order to avoid a conflict of interest, a lawyer may only provide advice to one of the parties. Legal advice also may be provided for legal issues arising while the project is being constructed, such as delays, labour issues, or defective work. Finally, legal counsel may assist a party should dispute resolution become necessary, for example, by negotiating with the other party or parties to the dispute or assisting with mediation, arbitration, or litigation.

Insurer

The insurers who provide insurance for the project in order to assist in managing risk. Contractors generally obtain coverage such as commercial general liability insurance, workers’ compensation, employers’ liability, and vehicle insurance. Owners may obtain property insurance, referred to as builder’s risk or all risk insurance.

Surety

A guarantor of the obligations of the principal – in this case, the contractor – in the event the construction contract requires the contractor to obtain performance or payment bonds. Subject to the terms of the bond, the surety guarantees to the owner that the contractor will perform and complete the project and pay for the labour, material, and other items the contractor is obligated to pay for under the contract. In the event the contractor fails to perform its obligations, the surety becomes responsible for the losses incurred by the owner to the extent those losses are covered by the bond. The surety then is entitled to obtain reimbursement from the contractor.

Zimbabwe

Zimbabwe

The parties to a construction contract are the employer and the contractor. The structure may vary depending on the required works. Commercial structures usually involve the following parties:

  • Owner of the land – the party requiring the construction works, permits are in his name. He is typically called the Employer.
  • Investors – invest in the construction through financing the owner eg commercial banks or building societies.
  • Construction company – this is the company that carries out the works and obtains all the necessary permits. Reports to the owner.
  • Insurance company – sometimes insurance companies underwrite the works or the financing.
  • The architect – responsible for drawing up the plans and project implementation.