When parties cooperate in construction, the agreements they have made together apply in the first place. Dutch law has a large degree of freedom of contract; parties are free to determine with whom they make agreements, what the content of the agreements is and how the agreements must be carried out. This is possible as long as these agreements are not contrary to the law. Agreements can be made either verbally or in writing. The latter is preferred, considering the parties’ position of proof. If a discussion arises about the assignment, the execution, the additional work or the payment, it is convenient to have agreements on paper.

Statutory regulations for construction contracts

In the absence of (written) agreements, parties fall back on the law, including the general law of obligations and the statutory regulations for special agreements. For construction contracts, the statutory regulations can be found in Book 7 of the Dutch Civil Code (BW). Book 7 of the Dutch Civil Code includes at least three special agreements that may relate to construction work: the commission contract, contract work and sale. Each of these agreements has its own rights, obligations, responsibilities and liabilities. Depending on the stage of the building process in which the work is performed, it will have to be determined how the agreement is to be qualified and therefore which statutory regulation should be looked at. Broadly speaking, the construction process can be divided into the design stage, the tender stage, the execution stage, completion and the period after completion or the maintenance stage. In the case of a commission contract one can think of the commission to the architect and other consultants. In the case of a contract for work, one should think of the assignment to the contractor, installer or maintenance party.

Construction contracts: commission contract

In principle, the commission contract includes all contracts for the performance of work, with the exception of (among others) contracting and the employment contract. The contracts with the architect, engineer, construction supervisor, constructor or other consultants involved in the building process are considered to be commission contracts. A general term for all these parties is “consultant”. The consultant must carry out his commission as an independent and non-subordinate of the client, so that there is no question of an employment relationship.

A commission contract will often exist when the building process is still in the design stage. The client then concludes a commission contract with the architect, consultant or designing contractor. This is then (only) about the realization of works of an intellectual nature (the design). In the executing stage the commission agreement may concern the supervision of the realization of the design. Would you like to know more about the rights, obligations and liabilities of parties to a commission agreement in the construction process? Then click on: “What are the rights, obligations and liabilities of clients and consultants in the commission agreement in a construction process?“.

Construction contracts: contract work

Construction contracts to contractors are classified as contracts for work. The characteristic difference with the contract for work is that the contract for work involves material objects, while the commission contract involves the provision of a service. Contracting of work is the agreement whereby the contractor, on the instructions of the principal – without being employed by the principal – constructs and delivers a material work. The processing of goods also falls under the scope of contract work. Processing involves the repair, maintenance or cleaning of an existing movable, immovable or tangible item. Renovations, alterations and repairs to utensils or buildings are all covered by contract work. Because of the lack of employment, the contract qualifies as contracting work and not as an employment contract.

The statutory regulation of contracting work contains much regulatory law. This means that the parties can make different arrangements. However, the statutory regulations are also important if the parties have made agreements. Some rules may not be deviated from to the disadvantage of the client. This concerns rules about additional work, judicial intervention in the event of dissolution due to probable shortcomings and in the event of concealment of hidden defects.

Would you like to know more about the rights, obligations and liabilities of both the contractors and the principal in contracting work? Then click on: “What are the rights, obligations and liabilities of contractors and principals in contracting work?“.

Construction contracts: purchase

The statutory rules on purchase also relate to the purchase of real estate, so this special regulation in Book 7 of the Civil Code is also important for construction practice. The statutory scheme includes provisions to strengthen the position of the private home buyer. There is also a separate regulation for purchase agreements and building contracts between consumers and contractors for the construction of a home. Such an agreement may not contain any agreements that are more disadvantageous for the consumer than the statutory regulation. Also, such a purchase/contracting agreement must always be entered into in writing. In practice, a model purchase/contracting agreement with accompanying general terms and conditions will usually be used for this.

Difference between purchase and contracting

An important difference between purchase and contracting work is that the contracting of work is personal in nature, whereas with the contract of sale it is generally less important who the person of the seller is. In contracting work, the work is explicitly part of the agreement. This is not the case with purchase. In a sale and contracting agreement, both elements are inextricably linked. For that reason, both legal rules apply to the purchase/contracting agreement. The circumstances of the case will always play an important role in determining which rules apply to the performance. Would you like to know more about the purchase/contracting agreement of immovable property? Then click on: “How does a purchase/contracting agreement work in real estate?“.

Real estate lawyer in Rotterdam

The real estate lawyers at LVH regularly assist clients, consultants and contractors. They advise on (the conclusion of) construction contracts, building contracts, the performance of the work, additional work carried out and completion. They also regularly assist clients and contractors in disputes. If necessary, we conduct legal proceedings.