what protections does the client have if the General Contractor leaves the works halfway

Ing. Cristian Angeli –

The company could be forced to complete the works, but a lot depends on the qualification of the relationship as a contract or mandate.

The advent of Superbonus brought about quite a few innovations. One of these is the diffusion also in the case of private works of the figure of the General Contractor, previously known only for public contracts.

The practices concerning building bonuses, in fact, are complex, ranging from preliminary checks, certifications and execution of works until the assignment of the tax credits.

For this, it could be useful to entrust the task of taking care of their intricate management to a company that operates as a GC.

The Revenue Agency has expressed its opinion on the fiscal profiles of the cost of the services provided by the GC, but on the contractual front it is more difficult to orient oneself in the event that the company does not fulfill its tasks satisfactorily, leaving the works halfway or carrying them out badly.

How, therefore, can a client (a condominium, a property owner, etc.) protect himself in the face of this type of problem? The case, among other things, is far from being only hypothetical, considering that the “block” of the transfer of credits linked to building bonuses has unfortunately made this type of situation recurring.

The contractual framework

It is not easy to trace what protections a condominium that has, for example, can put into practice “outsourced” to a GC, works which later proved to be defective from a constructive point of view or which were suspended, despite the fact that he had undertaken to carry them out in a certain way and times, defined in a specification.

Doing so means first of all understanding whether the relationship between the client and the GC has the characteristics of a contract or mandate.

The differences between contract and mandate

If, in fact, with the procurement contract the client entrusts the execution of a work or service to the other party (contractor) upon payment of a cash consideration, which the latter will perform by organizing and managing the necessary means (articles 1655-1677 of the civil code), very different is the mandate (art. 1703 of the civil code) With this, the principal obliges the agent, another contracting party, to perform one or more legal acts only on his behalf (the so-called mandate without representation, art. 1705 of the civil code) or also in his name (the so-called mandate with representation, art. 1704 cc).

How to protect yourself?

It is clear that if the GC leaves the site or carries out defective works, his liability and the consequent possible defenses against him depend on the form of the agreement. Be careful, for example, in the case in which you use a GC that deals with “intangible” activities, such as those of a planning nature, because the contract could be qualified as a mandate and not as a tender.

The broadest possible protections, in fact, concern the contract, in which case the contractor must guarantee that the result is achieved as agreed in the project, liable for the defects and discrepancy of the work.

Otherwise, in the case of a mandate, the obligations are less stringent, and the agent is only required to complete his service with the diligence of a good family man.

What remedies?

The whole of Chapter VII of Book IV of the Civil Code is dedicated to the tender and to the issue of the defects of the results.

If, once the work has been received from the contractor and the price has been paid, the client discovers defects or discrepancies with respect to the project, he will have 60 days from their discovery to report them and request the elimination of the defect at the expense of the contractor or the reduction of the price.

If the GC is entrusted with the “package” contract building bonusesthen, the condominium will always be able to ask for compensation for damages and termination of the contract for work done badly (articles 1667, 1668 of the civil code).

Or again, in the event of “ruin and defects of immovable property”, the GC-contractor is liable for 10 years after completion of the work (art. 1669 of the civil code).

Construction bonuses, General Contractor, condominium developer and subcontractor company: liability and tax aspects

Coming to the mandate, however, the remedies are less, it being established only that the agent operates with a reasonable degree of diligence. In any case, the agent can always revoke the mandate and extinguish it, and in the presence of “just cause” he will not be required to pay any compensation.

What to do in the event of a lack of liquidity for “problem” loans

The contractors can insert termination clauses both in the contract and in the mandate and/or provide that, if specific events occur or not, the obligation will cease. The impossible settlement of credit linked to bonuses, for example, can be an event which affects the relationship between the parties.

And if a similar clause is missing, there are still some cards to play for the condominium who runs into a GC who leaves the work unfinished and wants to close the relationship. If in a contract, for example, the client can withdraw even after the work has begun, on condition that the other party is held harmless from the costs incurred (art. 1671 of the civil code).

As anticipated, then, even the mandate can be extinguished without any clauses being specified, and the condominium will have to compensate the damages to the GC only if the mandate itself was irrevocable and there is no just cause (articles 1722 and 1723 of the civil code).

The just cause, in our case, could be precisely the impossibility of monetizing the credit.

But be careful, because the same lack of liquidity can be considered a just cause for renunciation for the GC (art. 1727), following which the client could only take legal action to protect his rights.

Therefore, the form of the contract is confirmed to be more “secure”, because in the event of problem loans, the GC will still be required to complete the work.

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