With many years of experience yes...
This time we have decided not to write about laws, paragraphs or court decisions. If we need them during construction, it's already too late. Therefore, if you are waiting for the interpretation of the dichotomy of the institute of a contract for work in the Civil Code and the Commercial Code, skip to the next article.
This is an article about the living experiences of contractors and customers of constructions of all kinds - from a family house to the construction of highways - as we have experienced them.
Anyone who has built their own family house, production hall, apartment complex or highway has heard the words "a building is a living organism" in various contexts. This phraseology, for some only a part of the construction slang, for others the ideology of the construction business, is undoubtedly the basis of every building claim. Why? Simply because on a construction site, everything rarely goes according to plan. The clear-cut will be hampered by gray sea eagle's nest, the excavation work will be interrupted by an illegal dump, and the change in technical regulations will force the designer to rework the implementation documentation. Add to these the requirements of the third parties involved, the undelivered construction site, the different geology from the assignment, unexpected weather conditions, and dozens, perhaps even hundreds of other factors.
The customer and the contractor often act as the main enemies in the implementation of construction projects. But does it have to be that way? At the beginning, the client is interested in a quality work, built in a reasonable time for a reasonable price, the contractors' interest is usually the same. However, in the event of the need to carry out unforeseen additional work, the customer and the contractor will forget the once common interest. In addition, the contractor will not do the work for free and the customer has a budget that cannot be increased. How to avoid this conflict between them? The answer is complex, yet so simple. “Clara pacta, boni amici”.
Let us therefore go back a few months, when the customer and the contractor still believed that it would be different on their construction site. Easier. Somehow they will agree. The customer obtained a building permit, prepared documentation for the construction and, after several months of preparation, announced a procurement. The contractor evaluated the statements, prepared a price offer and entered the tender. In the competition, our contractor was the most successful, the client concluded a contract with him for the work. Can this contract deal with all the pitfalls?
Location. Location. Location. Probably the most important factor reflecting the price of the finished property. The same goes for its construction. Before concluding the contract for the work, our client performed an engineering geological survey and drilled probes. He transformed the identified geology of the site chosen for construction into project documentation. The contractor relied on the customer's findings and began construction. And he came across... The first conflict. The contractor requires the client to pay additional costs arising from changing the method of foundation. According to the contract, he is entitled to payment, he could not have expected a change. The next conflict will not be long in coming. How could a designer shift the decimal point? It can't be built with this amount of material. The contractor again demands to increase the price of the work, this time with a reasonable profit. And this is far from the only mistake of project documentation. However, the missing railing was to be noticed by the contractor in time. Not after the reserve has been used up. The railing must be made without claim for reimbursement. And how the next claim of the contractor? He is again demanding an increase of the price as the government has approved an increase in the minimum wage and he needs to pay the workers. The customer has a different opinion, the contract provides for regular valorization of the price of the work during construction.
Autumn ends, concreting begins. It starts to freeze, concreting ends. The contractor informed the client that the construction will not be completed in March. The client requires the use of winter concrete admixture in the price of the work to meet the construction deadline. Nevertheless, the contractor knew that the construction was also planned during the winter period. However, this would only apply if he had handed over the site to the contractor at the agreed time. The client was late, the contractor started construction later and could not catch up.
This story is a jigsaw puzzle of real stories. Claim stories that could be predicted and adjusted in advance.
There is no universal contractual solution, the appropriate regulation of the rights and obligations of the contracting parties depends mainly on the preference of the customer. He must decide what degree of control and responsibility over the construction he will keep. In the case of smaller projects, it is important that the contractor identifies with the project documentation, it is important to determine the degree of responsibility for geology, proper handover of the site with access and network connections, solving extra and fewer works, to determine the construction period and the possibility of its delay, method and time of payment. The law will take care of the rest. For larger works, it is essential to ensure the solvency of the customer during construction, the proper and on time completion of the work by the contractor, supervision of the work and contractor's compliance with his obligations after handing over the work and during the warranty period.
The largest projects use the FIDIC contract terms proven by years, which adjust these aspects so that the risks are distributed fairly. In connection with the specific requirements of the client (and in the case of public contracts by public procurement regulations) they can create a comprehensive and balanced contract for work. Depending on the degree of control of the customer, under common circumstances we usually encounter the so-called the FIDIC Red Book, in which the project documentation is provided by the Client, and the FIDIC Yellow Book, according to which the contractor's task is to design and build the work. Both books precisely regulate the claims of the contracting parties.
Concluding a good work contract is not easy, but it is half the battle. Clear and good contracts create long-term business partnerships. Because the customer and the contractor will eventually tell each other that they got everything they were entitled to.
…and remember, the building is a living organism.