The construction contract is named contract regulated by the provisions of the Law on Obligations. In addition to the provisions of the Law on Obligations, the Special Customs of Construction can also be applied to the construction contract, which regulate the relationship between the employer and the contractor in construction works on construction sites. The Special terms of construction are applied if the parties have agreed to their application.
The construction contract is a contract for work in which the contractor undertakes to construct a specific construction project on a designated land within an agreed timeframe, or to perform other construction works on such land or an existing structure. The employer, in turn, agrees to pay a specified price for the services rendered.
In practice, it is not uncommon for the contractor to enter into contracts with subcontractors, which regulate the rights and obligations between the contractor and subcontractors. In such situations, the subcontractor is not in a contractual relationship with the employer of the works, and the subcontractor is solely responsible to the contractor for the quality of their work. On the other hand, the contractor is liable to the employer of the works for both the works they personally performed and the works contracted to the subcontractor, unless otherwise stipulated in the construction contract concluded between the employer and subcontractor.
The Law on Obligations explicitly states that the construction contract must be concluded in written form. However, this does not imply that the contract must be notarized by a competent public notary. For the validity of the contractual form, it is sufficient for the contract to be drafted in written form.
The subject matter of this contract is a “construction” which includes buildings, dams, bridges, tunnels, water supply systems, sewage systems, roads, railways, wells, and other construction objects that require extensive and complex work.
The contractor is obliged to provide the employer with constant supervision over the works and control over the quantity and quality of the materials used. For any deviation from the construction project or the agreed-upon works, the contractor must obtain written consent from the employer. They cannot demand an increase in the agreed-upon price for the works they have performed without such consent.
