Collection: CONSTRUCTION CONTRACT
What is a construction contract?
A construction contract is an undertaking contract by which the contractor undertakes to build a specific building on a specific piece of land according to a specific plan within an agreed period of time, or to carry out some other construction work on such a piece of land or on an already existing facility, and the client undertakes to will pay a certain price for it. The construction contract must be concluded in writing. In this chapter, "construction" means buildings, dams, bridges, tunnels, water pipes, sewers, roads, railway lines, wells and other construction facilities, the construction of which requires larger and more demanding works.
What is the legal nature of a construction contract?
The contractor's service is an obligation of result (success) , which means that for the successful performance of the obligations under the construction contract on the part of the contractor, it is not enough that the contractor has performed some work, but the final result is essential, i.e. the construction carried out in accordance with the construction contract.
The construction contract is regulated in the Code of Obligations, as well as some other regulations, e.g. Special construction instructions. For questions regarding the construction contract, which are not regulated in the part of the Code of Obligations on the construction contract, the rules on the general construction contract and the Special Construction Regulations are used, which regulate some issues very precisely. The latter derives from the fundamental principle of the Code of Obligations, which stipulates in Article 12 that, in relation to the construction contract, business customs, customs and practices established between the parties are also taken into account in order to assess the necessary actions of the parties and their effects. Customers with a construction contract can also exclude special construction charges.
At this point, as a precaution, we also point out caution when using the Special Construction Regulations, as there are two Special Construction Regulations in Slovenia, namely the Construction Regulations from 1977 and the new one from 2020, which in my opinion have limited legal validity, but above all they do not derogate of the validity of the Special Construction Regulations from 1977. Therefore, when using the Special Construction Regulations in a construction contract, we suggest that you consult a construction law attorney.
Price clauses in the construction contract
Price per unit – When the price is determined per unit, the price is determined from the unit of measurement of the agreed works, e.g. m2, m3, hour, which is determined by Article 654 of the Civil Code, as well as 22 PGU 2020 and 1977. In the case where the unit price is specified, the total amount in the contract is only the estimated value of the contract. The final actual value depends on the quantities of work actually performed, which means that the final contract price may be higher or lower than the estimated contract value.
Total agreed price (price determined in the total amount for the entire facility); Article 654 of the Civil Code, 22 PGU 1977 and 21 PGU 2020
Turnkey clause; Article 659 of the Civil Code, 34 PGU 1977.
FIDIC contracts
FIDIC contracts are accepted by the organization FIDIC, which is the French acronym for the phrase Fédération Internationale Des Ingénieurs-Conseils ). FIDIC is an international standards organization in the field of construction technology and engineering. The FIDIC organization is best known for its FIDIC contracts. According to the GZS, the latter were used for construction contracts in Slovenia at the suggestion of international financial institutions for construction projects more than 30 years ago, and in recent years they have been used for infrastructure construction projects that are co-financed with EU funds, mainly from cohesion funds .
FIDIC contracts are complex and extensive, and all the provisions of FIDIC contracts do not necessarily correspond to the individual national legal order, so when negotiating the FIDIC provisions in construction contracts, the FIDIC provisions need to be adapted accordingly.