REALWorld Law

Construction

Obligatory requirements

Are any terms and conditions imposed or implied by law or mandatory in contracts for the design or carrying out of building works?

Angola

Angola

Yes.

Construction works procured by the public sector are governed by the Public Procurement Law. In general, the provisions of the said law cannot be amended or excluded by the parties. In contracts for the design and construction of works procured by a private-sector developer, the parties have greater freedom to agree their own terms and conditions, but there are some mandatory provisions in the civil code regarding, for example, variations, defects, warranty period against construction defects and work withdrawal.

In addition, in the case of subcontracting, the contract must clearly set out:

  • The parties’ identification
  • The contractor’s license number
  • The scope of the works
  • The contract price and the works price
  • The time frame within which the works are to be completed, and
  • The payment terms

If the contract fails to include this information, its terms will be deemed null and void.

Australia

Australia

The Building Code of Australia has been given the force of statute in each State and territory. The BCA is a performance-based document and contains technical provisions for the design and construction of buildings and other structures, covering such matters as structure, fire resistance, access and egress, services and equipment, and energy efficiency as well as certain aspects of health and amenity. All work carried out in Australia must comply with the BCA. This is usually assessed by one of the bodies responsible for signing off on the building works, such as the building surveyor.

Certain provisions are implied into construction contracts by case law and statute.

There is Security of Payment (SOP) Legislation in all states and territories which gives a party to a construction contract the right to refer a dispute in relation to payment to adjudication provided the relevant Act has been ‘triggered’ by the payment claim.

In some states, legislation operates to imply certain warranties that the contractor will use materials that are reasonably fit for the purpose for which they are to be used (whether or not that is a purpose for which the materials are commonly supplied) and of good quality. However, these warranties are limited to residential work.

Australian Competition and Consumer legislation also implies certain warranties into contracts for services (for example that the services must be fit for a particular purpose) but this only applies to smaller contracts or consumer arrangements.

If a contract is silent in relation to liability for design, there is an implied term that the services will be carried out with reasonable skill and care. The burden of proof falls on the party claiming that the supplier of the service (design and build contractor, design sub-contractor or consultant) has failed to use reasonable skill and care.

Belgium

Belgium

Construction

Although there are exceptions, in general, construction contracts can be concluded orally as well as in writing (the latter being preferred for the sake of legal certainty).

No mandatory terms and conditions are imposed or implied by law, with the exception of contracts with respect to certain residential building activities, which impose mandatory requirements to include certain information in the contract to avoid the contract being deemed null and void. Such information includes:

  • The identity of the owner of the land and the existing building leases
  • The date of issue of the building permit and the conditions of that permit, or the contract with respect to the condition precedent concerning the building permit
  • The statement as to whether the contract is concluded under a condition precedent concerning financing
  • A detailed description of the private and common parts determining the object of the contract
  • By way of annexure, the detailed plans and contract documents of the work mentioned in the contract
  • The total amount of the price of the house or apartment or building
  • The contributions foreseen by regional regulation and the related conditions
  • The start date of the works, the period in which the works must be carried out and the indemnities due in case of delay
  • The manner of acceptance of the works
  • The acknowledgement by the parties of the receipt of the mentioned documents (which must be issued by the receiving party no later than 15 days from receipt)
  • An express condition that the buyer has the right to claim nullity of the whole or part of the contract in the event of breach of the prescribed obligations by another party

It should also be noted that what is known in Belgian law as the ‘10-year liability rule with respect to buildings and major works’ cannot be contractually excluded by the architects or contractors. Briefly, this rule applies to claims based on ‘serious latent defects’ as well as defects that concern the (partial) stability of the building. In respect of such potential claims, the Belgian Civil Code provides that contractual claims against a contractor and/or an architect need to be instigated within a period of 10 years from the date of final acceptance of the related works. As this rule is governed by the Belgian Civil Code, and is therefore of public interest in nature, it is not possible to contractually exclude the rule.

Design

According to the deontological or ethical rules applicable to architects, any contract between an architect and his client must be made in writing. Other than a number of other specified deontological rules applicable to architects (Reglement van de Beroepsplichten van de Architect), there are no other mandatory rules with respect to the content of architect contracts or contracts for the design of building works, although the 10-year liability rule (see above) cannot be set aside or excluded.

Bosnia-Herzegovina

Bosnia-Herzegovina

The Law on Obligations provides that terms and conditions dealing with the following issues must be included in construction contracts:

  • supervision of quality and quantity of work 
  • unforeseeable urgent works 
  • the price of work done 
  • changes to the price 
  • provisions relating to any fixed price 
  • termination of the contract 
  • responsibility for shortcomings in the work done 
  • the responsibilities of the project manager and the contractor for the quality of the construction, and 
  • any exclusions of liability.

Other provisions of the Law on Obligations relating to all contracts are also implied. All other specific contractual terms are to be agreed between the parties and must be expressly incorporated into the contract.

Canada

Canada

Although the National Building Code of Canada has no legal status, substantial parts of the Code have been adopted by many jurisdictions in Canada. In addition, the Code applies to construction that falls under the federal jurisdiction of Canada, such as military bases, federal government land and airports.

China

China

Terms and conditions are imposed by contract law, which sets out different regimes for contracts for works and construction project contracts.

Articles 252 to 268 set out specific provisions governing the obligations of contractors and customers under contracts for works (being contracts by which a contractor agrees to complete work according to a customer's requirements and delivers the work product and the customer agrees to pay for it).

Articles 269 to 286 set out specific provisions governing the obligations of employers and customers under construction project contracts (being contracts by which a contractor agrees to construct a project and the employer agrees to pay the relevant price). 

Croatia

Croatia

There are no mandatory terms or conditions to contracts for the design or carrying out of building works in Croatia; however, the object and the price of the construction must be defined.

Czech Republic

Czech Republic

These are the following basic requirements which must be included in a contract:

  • The contractor's commitment to carry out the work
  • The commitment of the client/employer to accept and pay the price for the work
  • The definition of the work, and
  • A determination of the price or the method by which it is to be determined (unless the parties are willing to enter into the contract without finalising this issue – in such a case, the client is obliged to pay the price that would normally be paid for comparable work at the time of conclusion under similar commercial terms).

Basic provisions which are not essential (ie not mandatory) include the time for completion.

No written form of contract is required.

Denmark

Denmark

Certain provisions are implied into construction contracts by case law.

The general conditions that follow from the standard form contracts AB 18 and ABT 18 are based on fundamental principles of contract law. Thus, even when AB 18 or ABT 18 are not incorporated into the construction contract between the parties, certain provisions derived from the standard form contracts still apply.

France

France

In construction contracts governed by private law (ie private sector projects), the following provisions amongst others are mandatory:

  • The owner (maître d'ouvrage) must deliver to the contractor (entrepreneur) a joint bank guarantee equal to the entire price of the contract in order to secure the payment vis-à-vis the contractor
  • The owner is entitled to retain an amount that does not exceed 5% of the entire price of the project in order to guarantee the remediation of any defects arising on the date of handover of the works or within one year from the handover.

Contracts for certain residential buildings are subject to mandatory requirements to include certain information and provisions in order to avoid the contract being deemed null and void.

It should also be noted that what is known in French law as the '10 year liability rule with respect to buildings' can not be contractually excluded by architects or contractors.

Germany

Germany

German law contains many mandatory provisions which cannot be summarised here. It is important to note that the contracting rules for the procurement of public works (VOB/B) are regarded as the model for general terms and conditions and if those are substantially departed from, individual provisions of the contract are likely to be checked by courts with the result that a court may declare one or more particularly onerous provisions to be invalid.

An important mandatory provision in construction contracts is section 650e of the Civil Code. Section 650e allows the contractor to get the benefit of security mortgage registered on the land register where the principal is the registered owner of the property. Contractors always have a right to ask for a bank guarantee covering the total outstanding amount due to them. Even if the parties agree on a 10% payment guarantee in the contract, the contractor may come back to the principal again and ask for appropriate security for the remaining 90% of the amount payable. Principals should usually comply with such requests because contractors are entitled to cease work if the payment guarantee is not provided within reasonable period of time.

Hong Kong

Hong Kong

Every contract must include an adequate mechanism for determining what payments become due, when they become due and a final date for payment. A party is also entitled to payment by instalments, stage payments or other periodical payments. Finally, a party also has the right to suspend performance for non-payment. If the contract does not make adequate provision, the provisions of a statutory scheme will automatically apply to it.

The Development Bureau of the Government of Hong Kong Special Administrative Region is consulting on important new legislation for the construction industry known as Security of Payment Legislation (SOPL). The SOPL will apply to all contracts and sub-contracts for public sector works including maintenance and renovation. In the private sector, SOPL will only apply to the procurement of new buildings at a cost over HK$5 million or related consultancy services costing over HK$0.5 million. Private sector repair, maintenance and renovation will not be covered.

Under the proposed SOPL, parties will remain free to agree when claims for payment can be made for works, services or supplies. Parties will also be free to agree how payments are valued. However, SOPL will prohibit fundamentally unfair payment practices, including ‘pay when paid’ clauses (where a main contractor withholds payment to a sub-contractor until the main contractor has been paid by the client) or unreasonably long payment periods.

The SOPL is still in its consultation stage, but the proposed legislation will have significant impact on the payment practices within the construction industry in Hong Kong.

As far as the works themselves are concerned, the contractor must do the work with all proper skill and care. Breach of this duty includes the use of materials containing patent defects. There is also an implied warranty that the contractor will use materials that are reasonably fit for the purpose for which they are to be used (whether or not that is a purpose for which the materials are commonly supplied) and of good quality. If a contract is silent in relation to liability for design, there is an implied term that the services will be carried out with reasonable skill and care. The burden of proof falls on the party claiming that the supplier of the service (design and build contractor, design sub-contractor or consultant) has failed to use reasonable skill and care. These terms will be implied only if the contract is silent on the issues; express terms are required to displace the implication of these terms.

Hungary

Hungary

In general, the parties to a contract for the design or carrying out of building works are free to contract as they wish. There are, however, certain provisions that are mandatory. Such mandatory requirements include (among others):

  • The construction contract must be in writing
  • Liability may not be validly excluded for breach of contract for damaging life, physical integrity or health, and for damages caused by wilful misconduct or a criminal act
  • Statutory warranties for specified periods apply to certain construction works and structures and must be provided by the contractor to the developer
  • Certain construction projects are subject to ‘project fund management’ where the funds covering the costs of the construction works are deposited into a separate account accessed exclusively by the project fund manager
Ireland

Ireland

Mandatory terms under statute:

Consumers, under statute, enjoy statutory rights under the Sale of Goods Supply of Services Act 1980 (1980 Act) when they contract with a builder to construct a one-off property or to improve an existing property. Such contracts would generally be seen as amounting to contracts for services. As a result, the 1980 Act will imply certain minimum guarantees of quality into the contract. Specifically, a contractor must have the necessary skill to render the service, the service must be provided with due care and diligence and, where materials are used, they must be sound and reasonably fit for the purpose for which they are required. It is possible for a trader to reject these minimum quality guarantees in a contract of service. However, where they are dealing with a consumer, they may only contract out of the statutory guarantees where it is fair and reasonable to do so and where they have expressly brought the issue to the consumer's attention.

It is not possible to contract out of obligations arising under several distinct areas of legislation (such as planning, environmental, health and safety and building control).

Implied terms under common law:

  1. A fitness for purpose term is implied into works contracts where it can be shown that the employer was reliant, to the knowledge of the contractor, upon the contractor's skill and judgment and not upon his own skill or judgment or that of his agents
  2.  Duty to take reasonable skill and care/good workmanship in the construction of the works: A builder owes a person to whom he sells a building a duty of care, the scope of which falls to be determined by the criterion of reasonable foresight and includes avoiding any dangerous hidden defects in the property

Terms will generally only be implied insofar as the contract is silent in that regard.

Italy

Italy

Construction activity is subject to a building licence, issued by the competent local authority board/committee.

As far as the works themselves are concerned, the contractor must do the work with all proper skill and care.

Breach of this duty includes the use of materials containing patent defects. There is also an implied warranty that the contractor will use materials that are reasonably fit for the purpose for which they are to be used (whether or not that is a purpose for which the materials are commonly supplied) and of good quality. If a contract is silent in relation to liability for design, there is an implied term that the services will be carried out with reasonable skill and care. The burden of proof falls on the party claiming that the supplier of the service (design and build contractor, design sub-contractor or consultant) has failed to use reasonable skill and care. These terms will be implied only if the contract is silent on the issues; express terms are required to displace the implication of these terms.

Note that should the building works involve the utilization of reinforced concrete, the law provides that the designer must submit to the competent public authorities, prior to the commencement of the relevant works, the technical details of the reinforced concrete portions of the building works and that the final testing of the reinforced concrete structures shall be carried out by the Civil Engineering Corps (Genio Civile).

Japan

Japan

There are statutory required terms and conditions which must be stipulated in contracts for construction works under the CBA. Such terms and conditions include:

  1. the content of the construction work;
  2. the contract price;
  3. the commencement date and the completion date for the construction work;
  4. the payment date and payment method for the contract price following completion of the construction work; and
  5. method of settlement of dispute concerning the construction contract.

Regarding a design works contract, under the Act on Architects and Building Engineers, the architect's office is required to explain to the owner the following statutory mandated items in writing:

  1. the type of design drawing (architectural drawing or structural drawing, etc.);
  2. the name of the architect engaging in the design;
  3. the amount of design fee and the payment date; and
  4. matters relating to termination.
Netherlands

Netherlands

There is no obligation to include specific provisions in a construction contract, but the Dutch Civil Code prescribes rules which apply by law to construction contracts. Some rules can be agreed to be not applicable, but some rules are mandatory law.

Nigeria

Nigeria

Federal Government developments are subject to the Public Procurement Act, 2007 which require that certain contracts or procurements are to be approved by the Bureau of Public Procurement (BPP) except a waiver is obtained. One of the guidelines for the approval of contracts by the BPP is that they be governed by Nigerian law. If works are procured by a state government, the rules may differ in accordance to the respective states’ procurement law.

In the case of private sector developments, the parties are free to contract provided the general legal requirements of a valid contract are satisfied. There is a general duty of compliance with standards prescribed under the applicable laws and regulations and parties cannot agree to exclude the provisions of extant laws regulating design standards and the carrying out of building works.

The terms that are implied by law includes the contractor’s duty to carry out the construction works with proper skill and care; obligation to adhere to particular best standard; fitness for the expected purpose particularly as the employer relies on the contractor’s design skills; must meet the standard imposed by regulations and codes.

Norway

Norway

Norwegian contract law is based on the principle of contractual freedom. The principle provides the parties a right to agree and enter into contracts without mandatory governmental restrictions. However, when one of the parties to the contract is regarded as a non-professional or "a consumer", some Acts contain mandatory provisions.

Certain provisions in the standard construction documents are incorporated as a result of statutes and case law.

From 24 April 2013 minimum wage rates for skilled and unskilled construction workers apply on construction sites. The minimum wage is mandatory in all construction projects.

Poland

Poland

Certain provisions are implied into construction contracts by case law and statute.

Every contract must include an adequate mechanism for determining what payments become due, when they become due and a final date for payment. A party is also entitled to payment by instalments, stage payments or other periodic payment.

In addition, the contractor has to complete the work with all proper skill and care. Breach of this duty includes the use of materials containing patent defects. There is also an implied warranty that the contractor will use materials that are reasonably fit for the purpose for which they are to be used and of good quality.

Portugal

Portugal

Construction work procured by the public sector is governed by the Public Contracts Code. In general, the provisions of this code cannot be amended or excluded by the parties. In contracts for the design and construction of works procured by a private sector developer, the parties have greater freedom to agree their own terms and conditions. However, under Law No. 41/2015, of 3 June 2015, contracts which exceed €16,600 must clearly set out:

  • The identification of the parties
  • The contractor’s permit number, the company’s certificate or registration, duly issued or validated by IMPIC, IP, the Portuguese Institute of Construction and Real Estate
  • The scope of the works, including any the design (if applicable)
  • The contract price
  • The time frame within which the works are to be completed
  • The payment terms

If the agreement fails to include this information, its terms will be deemed null and void. These contracts must also be kept on file for a ten-year period following completion of the works.

Romania

Romania

Law 10/1995 regarding quality in construction works provides the main framework of requirements that must be fulfilled by client/employers, designers and contractors. In addition, there are several additional detailed technical regulations that apply.

Certain standards must be met throughout the entire existence of the construction relating to:

  • Resistance and stability
  • Fire safety
  • Hygiene, public health and environmental protection
  • Thermal insulation, water-proofing and energy saving
  • Safe usage of the construction
  • Noise protection

Technical expertise must be provided by authorized experts for any works of rebuilding, consolidation, transformation or partial demolition.

When the construction works are finished, the parties sign handover minutes in order to certify that the contractor has fulfilled its obligations in accordance with the construction contract and the relevant legislation. The handover involves two phases:

  1. Handover at the completion of the work
  2. Final delivery at the end of the warranty period

Under the relevant legislation, the designer and the contractor participate in both phases of the handover, so provisions obliging the designer and the contractor to participate in the handover should be included in the design agreement, respectively in the construction contract in order to avoid any additional fee becoming payable.

Russia

Russia

Under Russian law, a construction contract must specify:

  1. The scope of the works
  2. The timescale within which the works must be completed, and
  3. The price payable for the works

As a general rule, in the absence of these three material terms the contract is deemed not to have been concluded and does not give rise to any obligations on the part of the parties. However, under Russian law a party to a contract may not deny that a contract has been validly concluded if its actions in performing a contract show that it obviously considers the contract to be in existence and concluded.

There are also certain mandatory provisions imposed by the Civil Code of the Russian Federation which cannot be changed or excluded by the agreement of the parties, such as provisions relating to the allocation of risk between the contractor and the client and a five-year period for the discovery of latent defects.

Slovak Republic

Slovak Republic

The contract for work being the contract typically used in this field is governed by the Civil Code and the Commercial Code. Unlike the Civil Code, the majority of the provisions of the Commercial Code regulating the contract for work can be adjusted by the parties according to their contractual freedom, as they are of a non-mandatory nature. In accordance with the Commercial Code, a contractor will execute development works at his own expense and at his own risk within the contractually agreed period of time. Mandatory requirements of the contract for work regulated by the Commercial Code include the obligation to stipulate the following information:

  • The price (or the way the price is determined)
  • Clear identification of the contractual parties
  • The subject matter of the contract for work. Here, work will always mean the execution, assembly, maintenance, repair or modification of the whole or part of a construction or building
Spain

Spain

Apart from the obligation on the contractor to fulfil the technical requirements set out in the Spanish Building Act, the Spanish Technical Construction Code, the Energy Efficiency Act and other technical regulations, there are only few legal provisions implied specifically into construction contracts.

One of these provisions implied by the Civil Code is the right for the developer to terminate the contract early without cause, being obliged only to pay costs to the contractor.

An additional specific provision implied into construction contracts is that subcontractors are entitled to claim against the developer, even if no contractual relationship exists between them, for any debt owed by the contractor to the subcontractor and up to the amount owed by the developer to the contractor.

Sweden

Sweden

Only when building for consumers. The contractor is then forced to follow the regu-lations stipulated in the Consumer Service Act (Konsumenttjänstlagen).

Thailand

Thailand

In principle, the terms and conditions of the construction contract govern the design or carrying out of building works to the extent that such terms and conditions are not expressly prohibited by law and are not impossible or contrary to public order or good morals.

Unless the construction contract states otherwise, the following provisions of the Civil and Commercial Code apply in relation to the construction of a building:

  • Section 593: If the contractor does not commence work in accordance with the contract terms, or if, without fault on the part of the employer, there is a delay in the commencement of the work in such a manner that it can be foreseen that the work will not be finished within the agreed period, the employer is entitled to rescind the contract without waiting for the time agreed upon for delivery.
  • Section 594: When it is possible to foresee with certainty, whilst the work is proceeding, that, due to default by the contractor, the work will be executed in a defective manner or contrary to the terms of the contract, the employer may require the contractor by notice to make good the defect or to comply with the terms of the contract within a reasonable time (to be fixed in the notice) failing which the employer is entitled to have the work repaired or continued by a third person at the risk and expense of the contractor.
United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

A wide variety of provisions apply to consultancy and construction contracts by statute. For example:

  • The Civil Code imposes certain conditions on muqawala (work) contracts, including in relation to liability for defects and termination.
  • The Building Law requires that consultancy services be carried out with reasonable skill and care. The burden of proof falls on the party claiming that the supplier of the service (design and build contractor, design sub-contractor or consultant) has failed to use reasonable skill and care.
United Arab Emirates - Dubai

United Arab Emirates - Dubai

Certain provisions are implied into construction contracts by statute.

The Civil Code imposes certain conditions on muqwala (work) contracts, including a provision that a contractor is liable for damage caused by its acts.

The provisions in the Building Codes and guidelines issued by Dubai Municipality, JAFZA and TECOM dictate the design terms and conditions.

UK - England and Wales UK - England and Wales

UK - England and Wales

Certain provisions are implied into construction contracts by case law and statute.

The Housing Grants, Construction and Regeneration Act 1996 gives a party to a construction contract the right to refer a dispute to adjudication. In addition, every contract must include an adequate mechanism for determining what payments become due, when they become due and a final date for payment. A party is also entitled to payment by instalments, stage payments or other periodic payment. Finally, a party also has the right to suspend performance for non-payment. If the contract does not make adequate provision, the provisions of a statutory scheme will automatically apply to it.

As far as the works themselves are concerned, the contractor must do the work with all proper skill and care. Breach of this duty includes the use of materials containing patent defects. There is also an implied warranty that the contractor will use materials that are reasonably fit for the purpose for which they are to be used (whether or not that is a purpose for which the materials are commonly supplied) and of good quality. If a contract is silent in relation to liability for design, there is an implied term that the services will be carried out with reasonable skill and care. The burden of proof falls on the party claiming that the supplier of the service (design and build contractor, design subcontractor or consultant) has failed to use reasonable skill and care. These terms will be implied only if the contract is silent on the issues; express terms are required to displace the implication of these terms.

UK - Scotland

UK - Scotland

Certain provisions are implied into construction contracts by case law and statute.

The Housing Grants, Construction and Regeneration Act 1996 (as amended) gives a party to a construction contract the right to refer a dispute to adjudication. In addition, every contract must include an adequate mechanism for determining what payments become due, when they become due and a final date for payment. A party is also entitled to payment by instalments, stage payments or other periodic payment. Finally, a party also has the right to suspend performance for non‑payment. If the contract does not make adequate provision, the provisions of a statutory scheme will automatically apply to it.

As far as the works themselves are concerned, the contractor must do the work with all proper skill and care. Breach of this duty includes the use of materials containing patent defects. There is also an implied warranty that the contractor will use materials that are reasonably fit for the purpose for which they are to be used (whether or not that is a purpose for which the materials are commonly supplied) and of good quality. If a contract is silent in relation to liability for design, there is an implied term that the services will be carried out with reasonable skill and care. The burden of proof falls on the party claiming that the supplier of the service (design and build contractor, design subcontractor or consultant) has failed to use reasonable skill and care. These terms will be implied only if the contract is silent on the issues; express terms are required to displace the implication of these terms.

Ukraine

Ukraine

The contracts for carrying out building works should contain the mandatory terms and conditions prescribed by the Civil Code of Ukraine, the Commercial Code of Ukraine and the General Conditions of Conclusion and Execution of Contractor's Agreements in Capital Construction approved by the Resolution of the Cabinet of Ministers of Ukraine No. 668 dated 1 August 2005, in particular names and details of the parties, the place and date of the execution of the contract, the contractual price, terms for commencement and completion of works and rights and responsibilities of the parties. Any contract which lacks the mandatory provisions envisaged by the law, may be declared invalid by the court.

United States

United States

Yes, numerous provisions are or can be implied in design and construction contracts by either case law or statute. These provisions vary from state to state; however, a few examples of implied obligations include:

Standard of care

While the owner, designer, and contractor are free to agree contractually on the standard of care by which the work will be performed, in most cases a standard of care will be provided by statute or common law if the construction contract is silent. While most implied standards will differ in some respects from state to state, the standards are reasonably similar and in some manner require proper workmanship or skill ordinarily used by members of the profession.

Setting forth the standard of care in the contract could be of benefit to either the owner or the design professional or contractor, depending on the standard of care agreed to and other circumstances. On the one hand, an owner may be able to negotiate a higher standard of care than common law or statute would provide. On the other hand, once agreed to by contract, the design professional or contractor may be able to avoid implied warranties that could heighten a standard of care or even punitive damages that could be awarded were the contract silent.

Duty to comply with building codes

A design professional generally has a duty to design the project in accordance with applicable building codes.

Implied covenant of good faith and fair dealing

Most US states (but not all) obligate the parties to a contract to act in good faith. The obligation of good faith also has been incorporated into the Uniform Commercial Code. Simply put, the covenant of good faith requires that people deal fairly with another.

Even in states where good faith is not universally implied in commercial contracts, a state may require good faith in specific instances. For example, a contractor may be obligated to comply with building codes, even though such compliance is not an express obligation in the contract.

Differing site conditions

Common law may, in some jurisdictions, allow a contractor additional compensation and/or time when encountering hidden, unexpected conditions on a construction site that a contractor should not have been able to discover during its examination of the site. The contractor may be entitled to additional compensation and/or time under certain circumstances even if the contractor agreed to perform the work for a lump sum, guaranteed a not-to-exceed price, or guaranteed a completion date the contractor cannot meet because of the differing site conditions.

Lien rights

Lien rights are provided by statute in all states; however, provisions and requirements vary. Stated broadly, a person who contracts to improve real property may have a legal right to encumber the property for the amount owed.

Applicable law

Some states require that the law of that state is applicable to any contract for construction in that state, despite the parties’ agreement otherwise.

Statute of limitations

See Limitation period.

Other provisions

Other provisions that may or may not be implied in a contract, depending on the jurisdiction in the United States, include copyright protection, impartiality of an architect, cardinal change, implied authority for a change order, implied contractual indemnity coverage, common law one-year corrective remedy, implied warranties of design and design adequacy, duty of cooperation, duty of disclosure, site investigation duty, duties regarding the handling and disposal of hazardous materials, implied inspection authority, doctrine of impracticability, anti-indemnity statutes, implied contractual indemnity, merchantability, strict compliance doctrine, implied warranty of habitability and consumer protection statutes.

Zimbabwe

Zimbabwe

Although there is no mandatory requirement to that effect, the parties would need to ensure that they incorporate the necessary approvals from the local authority into their agreements. The terms and conditions of engagement are usually governed by contract, and they therefore tend to vary in each case. The common law fiduciary duties of a contractor therefore apply. These include but are not limited to:

  • The contractor must undertake the works with all proper skill and care.
  • The contractor must work with quality materials that are fit for the purpose.

When engaging in construction on behalf of a procuring authority, the Public Procurement and Disposal of Public Assets Act [Chapter 22:23], and The Public Procurement and Disposal of Public Assets Regulations of 2018 provide for the minimum standards applicable in construction contracts with procuring authorities.