- Types of contracts in construction
- Legislation governing the conclusion of contracts
- Main clauses of contracts
Whether you are making repairs or building a house – any outside help involves the conclusion of a contract. This article will tell you about how to compose the text of the document correctly and protect yourself from negative consequences..
The main principles of drafting contracts in the construction of a country house. Part 2
The time has come when rarely anyone makes repairs, and even more so builds private housing for themselves, on their own from start to finish. The service market today is replete with offers. You can order everything, from gluing ordinary wallpaper to the construction of a multi-level cottage with an individual landscape of a turnkey plot. With the development of the construction business in the country, the number of firms providing certain services has increased, to put it mildly, of poor quality. It is very, very difficult to force such would-be specialists to correct the flaws in the already completed works. An officially signed document – a contract – should guard your interests. Depending on what conditions were laid down in it, you and the employee you hired can count on a certain result: the customer – for an impeccably done job, and the contractor – for appropriate and timely payment.
But let’s remember how we feel about signing this kind of paper. We sign without reading, referring to the lack of time, blindly trust the standard forms or completely abandon all kinds of official documents, considering them a relic of the bureaucratic past.
In doing so, rarely does anyone think about the consequences. As practice shows, in more than half of the cases, the absence of a concluded contract leads to a waste of money: poorly executed construction and installation work, not supplied or defective materials, buildings that have collapsed after a couple of weeks and simply fraudulent schemes of criminals. In this case, it is almost impossible to prove the guilt of workers..
And even when concluding a contract, many cannot avoid difficulties. It is not uncommon for the court to recognize the contract as not concluded during the proceedings. This circumstance often arises due to the absence of essential conditions in the text of the contract. Then it is considered that the parties, despite the signing of the papers, did not manage to agree. The consequences of such recognition are quite deplorable for the customer – there are practically no chances to return the advance paid to the contractor even before the start of work without expensive lawyer work..
There are many articles on the Internet that, if the contract is recognized as invalid, the amounts transferred for the fulfillment of obligations must be returned. However, this statement concerns only those who are recognized as invalid and have nothing to do with those who are not concluded. An agreement that was never concluded does not bind anyone to anything, and the transferred funds can be regarded as sponsorship.
Let’s figure out what types of contracts in construction are most often encountered by ordinary people, what legislation regulates their execution and what essential conditions should be indicated in each specific case.
Types of contracts in construction
For a more detailed consideration of the points and conditions, you should decide on the main types of transactions in construction. Find out what form the contract should wear: written or oral. Do I need state registration. Determine who are the parties and what exactly is the subject of each type of contract.
The very first on our list will be the sales contract. This is the acquisition of things necessary for the repair, the equipment of the construction site with materials and much more. The purchase and sale option is a delivery contract. Such a document formalizes a transaction in which the seller (supplier) is obliged to provide the buyer with the goods produced (purchased) by him for use not related to personal or household use. So the delivery of food from an online store has nothing to do with the delivery contract, but the developer’s equipment with building materials fully fits this definition. As mentioned above, the parties to this type of transaction are the seller and the buyer, and the subject is a product of a certain quality and quantity. According to the legislation, the supply agreement must be concluded in a simple written form.
The next type of transaction that you may have to face during construction work is rent. The most indicative example for consideration will be the hiring of special equipment to perform certain works. Excavators, tractors, cranes and machines that are operated only by specially trained people. As a result, two types of such contracts are distinguished:
- vehicle rental with a crew;
- vehicle rental without crew.
Depending on the choice, additional terms of the contract are determined, in each of the options they have their own characteristics and are determined by various norms of the law. The parties to this transaction are the lessor and the lessee. The subject of this agreement is the obligation to provide technology. Object – a rented item. According to the law, the lease is also subject to a simple written form..
The third and perhaps the most common type of transaction in construction is a contract. Under a contract of this type, one party undertakes, on the instructions of the other party, to perform certain works and transfer the result of these works. In total, construction contracts are divided into 4 types:
- household in a row;
- construction contract;
- contract for the performance of design and survey work;
- contract for state needs.
For a simple layman who has started repairs, redevelopment or construction, the second and third items on the list are of greatest interest. We will dwell on them in more detail. In the general case, the parties to the work contract are the customer and the contractor, and the subject is the subject obtained as a result of performing certain works. In this case, the document, like all previous ones, has a simple written form..
Legislation governing the conclusion of contracts
The main document when concluding any transactions for persons carrying out their activities on the territory of the Russian Federation is the Civil Code. General provisions on contracts in it are devoted to articles 420 to 453. Thus, according to article 432, a contract is considered concluded only if the parties have agreed on all essential conditions. Their description is also given there. So for any type of contract, the most basic condition is the subject of the contract, correctly defined and fully described in the text of the document..
The second part of the Civil Code will tell you about certain types of obligations. Articles 506 to 524 are devoted to supply contracts here. However, one should not forget about the general requirements for the sale and purchase, in more detail they are set out in paragraph one of Chapter 30, namely in Articles 454 to 491. Rent of vehicles, including the number of special equipment, both with management and operation services, and without them, is described in articles from 632 to 649. What requirements are imposed on contractors and customers can be found in articles 702-768. The Letter of the Ministry of Construction of the Russian Federation of 10.06.1992 N BF-558/15 “On the Guidelines for the Drafting of Construction Contracts for Construction in the Russian Federation” quite fully discloses the content of the construction contract. However, one should not forget that this document is rather advisory in nature and does not require unconditional execution..
On the Internet, you can also find a lot of documents that in some way interpret or explain some articles and norms of the law. But most of them tell nothing new. For an ordinary person who is going to build a house or make repairs, it is enough to know a few statements based on the requirements of the civil code:
- all transactions are concluded on a voluntary basis (article 421) – no one has the right to force you to sign what you do not agree to, and no clauses in the agreement are required by law, most often any words can be rewritten in such a way that both parties will be satisfied ;
- all transactions in construction are onerous (Art. 423) – even if there is no price in the contract, then upon payment it will be determined in all possible ways: by agreement, at the cost of similar works, and the like;
- all transactions in construction are made out in a simple written form (Article 161) – failure to comply with this simple condition leads to the fact that it will be almost impossible to prove your mutual intentions in court, since the testimony of the judge will not be considered;
- the term for the execution of the contract is long and does not require immediate signing – therefore, for a full and detailed consideration, the document can be taken home and, if necessary, amended by drawing up a protocol of disagreements;
- in order for the contract to be considered concluded, it is necessary to clearly spell out all the essential conditions in the text. We will talk about them below..
Main clauses of contracts
First, consider the contract for the supply of goods According to the Civil Code, this type of document must contain the following essential conditions: the subject of the contract (goods to be supplied) and its quantity. They are not significant, however, they can be recognized as such under Art. 432 of the Civil Code, the following important conditions: price and delivery time. Despite clause 7 of the resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation of October 22, 1997 No. 18 “On some issues related to the application of the provisions of the Civil Code of the Russian Federation on a supply contract” the case still recognize this condition as essential. In the case of the delivery of building materials to an object, the delay in receipt of which by the buyer will entail downtime and losses, the likelihood of recognition of a contract with an unspecified date of receipt of goods unconcluded is very high.
Other issues are also subject to settlement, for example: on whose transport the delivery will be carried out; by which parties, at what time; is there a possibility of early delivery; force majeure circumstances; the possibility of changing the terms of the contract; payment order; responsibility and many others. According to Art. 507 of the Civil Code, the parties have a deadline for eliminating disagreements on the text of the contract, it is 30 days. Moreover, if one party received a notification from the other about this, but left it unanswered, you can claim compensation for losses caused by evading agreement on the terms of the contract.
You should be aware that the supply contract can be terminated unilaterally by either of the parties in case of significant violations of obligations:
- repeated violation of terms (for the seller – delivery of goods, for the buyer – payment);
- non-selection of goods by the buyer more than once (the seller has the right to submit for termination);
- delivery of goods of inadequate quality (the buyer has the right to submit termination).
After unilateral refusal to fulfill obligations, the injured party has the right to compensation for losses. So, for example, if you refused the services of one seller due to constant delays and bought the same from another, but at a higher price (within reasonable limits), then the difference can be collected from the dishonest seller. You can read more fully about the rest of the conditions for compensation for damage in Art. 524 of the Civil Code. However, the contract may provide for additional cases of compensation for damage..
In the next article, we will take a closer look at drawing up a lease agreement and, perhaps, the most controversial in terms of registration – a work contract. We will also tell you about the main mistakes made when drawing up various contracts.