PARTICULARITIES OF CONTRACTOR AGREEMENT IN CIVIL CODE REGULATION.
In the previous regulation, the contractor agreement was included in the scope of the institution of lease; thus, the Civil Code of 1864 distinguished between lease of things (locatio rei--article 1411 which defined the notion of lease, by using the term of lease of things) and lease of works (the employment contract, the contractor agreement and the transport contract--article 1413). For those reasons, the previous Code used other terms to designate the contractor, such as, depending on the situation: worker (article 1479), craftsman (article 1480), entrepreneur (article 1483) or architect (article 1483).
The new Civil Code abandons this approach, regulating under the general name of lease (article 1851-1880), what the old code considered a lease of things. Consequently, the concept of lease of works has disappeared and the employment contract, the contractor agreement and the transport contract (referred to in article 1413 of the Civil Code of1864 when it analyzed the lease of works) have been totally removed from the scope of the institution of lease (Lazar, 2013: 118).
The contractor agreement is a contract whereby one party, the contractor, undertakes, at his own risk, to execute a certain material or intellectual work or to provide a service to the beneficiary, in exchange of a price. The general rule in the matter of the contract risk is that the risk is borne by the debtor of the obligation impossible to execute, meaning that he will not be able to claim the other party, the execution of the correlative contractual obligation, but also the other party will not be able to claim compensation from the debtor of the obligation impossible to execute, not being at fault (Lazar, 2007: 42). In the new Civil Code, this rule is confirmed by the provisions of article 1634, applicable in principle to all agreements and with regard to transferable ownership agreements is reinforced by article 1274 par. 1. The doctrine uses the term "client" for the beneficiary (Chirica, 2007: 251).
It results from the analysis of the definition given by article 1851 Civil Code that the legislature intended to comply with the opinions constantly expressed in the doctrine published under the previous Code which mentioned the "dematerialization" of the contractor agreement (Deak, 2001: 292), in the sense of applicability of rules concerning the contract, not only to material works, but also to intellectual activities, such as professional consultations provided by a public notary or lawyer under the law governing such activities (Rudareanu, 2006: 168). We emphasize, only in terms of consultations, as in the case of the notary, as in that of the lawyer, other professional activities are governed by other rules, such as for lawyers, legal representation, which is a form of mandate.
As for the object of the legal relationship emerged as a result of the contractor agreement, it is the obligation of the contractor to perform independently (Turianu, 1999: 292). With regard to the independent nature of the contractor's work, the author refers to Dec. no. 912/1954 and Dec.501/1957 of the former Supreme Court, published in Collections of decisions), a material work (for example, the construction of a building) or intellectual work (legal or medical advice) or to provide a service (the repair of an appliance) and to hand over to the beneficiary, the outcome of his work, performing the work at his own risk.
2. Legal Features
1. The contractor agreement is a designated agreement, expressly regulated in the current Civil Code, as in the previous one.
2. The consensual nature stems from the lack of form conditions, the mere agreement of will being sufficient to conclude the contract. Only exceptionally, the contractor agreement has solemn nature when it relates to public works, in such case, public auction being required (Motiu, 2012: 106).
3. The contractor agreement is synallagmatical, characterized by mutual obligations of the parties and by the interdependence of these mutual obligations.
4. As each party concludes the contract in the light of a counter performance of the other party, the contractor agreement has pecuniary interest. As an exception, however, we believe that there can be cases of contractor agreements with free character, from the perspective of the entrepreneur, when he does not claim counter performance (price), in which case the character of the contract is not changed. In this sense, we can exemplify by a pro bono performance, such as the legal or medical advice, from lawyers and doctors or even the construction or repair free of charge, of a building used as a shelter for disadvantaged groups.
5. The commutative character is conferred by the fact that at its conclusion, the parties are aware of the existence and extent of obligations arising from the contract.
6. Since, usually, the contractor's performance is executed in time; the contractor agreement is, from his perspective, with successive execution. Reported to the beneficiary, however, who is compelled to pay the price, the contract is uno ictu (Belu Magdo, 2012: 9), unless the parties have agreed to pay the price by successive performances.
7. Regarding the consideration of the entrepreneur when signing the contract, towards the form of article 1852 Civil Code, but also towards the complex mechanism of operation of the contractor agreement, the doctrine has different opinions. The existence of the subcontractor agreements concluded with third parties leads to the creation of a group of contracts of radiant structure that allows the liability client--contractor for the subcontractors' deeds (Ratoi et al, 2013: 33).
Thus, an opinion considers that the contractor agreement has intuitu personae character (Motiu, 2012: 106), others consider that it has an intuitu personae character in terms of organization and work management (Florescu, 2012: 211; Gheorghiu, 2012: 1883); the execution could be, however, entrusted to a third party (Comanita and Comanita, 2013: 188), and another opinion considers that the contractor agreement is not basically an intuitu personae agreement.
From the literal interpretation of article 1852 par. 1, pursuant to which "by a subcontractor agreement, the entrepreneur can entrust to one or more subcontractors, the execution of parts or elements of works or services, unless the contractor agreement was concluded in consideration of his person", it would result that the contractor agreement has an intuitu personae character, only in the second sentence of the text analysed; per a contrario, as a rule, the contractor agreement would not have such a character.
We believe, however, that, beyond the way the legislature intended to draw par. 1 of article 1852 Civil Code, the contractor agreement is, in principle, an intuitu personae agreement. It is true that subcontracting is permitted, but the contractor is liable towards the customer for the deed of the subcontractor to whom he entrusted, in whole or in part, the execution of the contractor agreement (Piperea, 2013: 318).
3. Effects of the Contractor Agreement
3.1 Obligations of the entrepreneur
a. The execution of the performance
Pursuant to article 1857 Civil Code, if the law or the contract does not provide otherwise, the contractor is obliged, within the agreed time, to execute the work with his materials, in which case he is held liable for its quality, under the provisions of the contract of sale.
If the parties do not pursue through the contract, to make of the performance of the work, the main goal of the will agreement, considering also the value of materials, the contract will not be qualified as a contracting contract, but as a sale contract, governed by rules of article 1650 et seq. of the Civil Code.
But if the work is done with materials of the beneficiary and the beneficiary entrusted the materials to the contractor, the latter is obliged to keep and use them according to their destination, pursuant to the technical rules applicable, to justify how they have been used and to return what it has not been used in the execution of the work.
The beneficiary has the right, at his own expense, to monitor the work during its execution, without unduly hindering the entrepreneur, and to communicate him his observations.
Regarding subcontracting, it may cover material and intellectual performances and services provision and is allowed, unless the parties agree that the work is not only coordinated, but also effectively executed by the contractor.
There are no legal contractual relationships between the subcontractor and the beneficiary; the subcontractor is liable towards the entrepreneur, and this, in turn, will be liable towards the beneficiary both for the subcontractor's deed, as well as for his own. Consequently, the beneficiary does not have an action on contractual basis against the subcontractor, but may act against him only by way of tort liability, if legal conditions are met (Comanita and Comanita, 2013: 193).
Subcontracting falls under the legal regime of the contractor agreement, pursuant to article 1852, par.3.
b. The obligation of informing the beneficiary
The contractor is obliged to immediately inform the beneficiary if normal execution of the work, its strength and the intended use thereof are endangered because of the materials that, according to the contract, the beneficiary put at his disposal, because of inadequate instructions given by the beneficiary or of the existence or occurrence of circumstances for which the contractor is not compelled to respond.
In the case when, although the contractor fulfilled his obligation to inform the beneficiary and the latter did not take the necessary measures according to the circumstances, the contractor has the option to terminate the contract or to continue the execution at the risk of the beneficiary, notifying him in this respect.
Nevertheless, when the work is likely to threaten the health or physical integrity of persons, the entrepreneur has no longer just an option, moreover he is obliged to request termination of the contract, under the sanction to take the risk and to be liable for damages caused including to third parties.
c. The obligation of delivering the work
Regarding the delivery, as soon as the contractor informed him that the work was finished, the beneficiary must, within a reasonable time, depending on the nature of the work and practices in the field, to check it and to determine if it met the conditions set by contract, to receive it, after which, where appropriate, to take it. The work reception will be done at the same place where the reception was held (Florescu, 2012: 217).
Article 1860 of the Civil Code regulates the situation where the contractor, for reasons not attributable to the beneficiary, can no longer deliver the work that he had committed to do, because the work was destroyed or damaged. The entrepreneur who bought the material is bound to restore the work at his own expense and by complying with the initial conditions and deadlines, considering, where appropriate, the rules on the accidental suspension of the execution of obligation. However, if the material is purchased by the customer, he is bound to bear the costs for restoring the work only if the destruction was due to a defect of the material. In other cases, the beneficiary is required to provide new materials, if the destruction or damage is not attributable to the contractor.
d. The warranty against defects
Article 1863 of the Civil Code stipulates that the contractor owes warranty against defects of the work and for the agreed qualities (including for the subcontractor), under provisions on the warranty against defects of the work sold, which apply accordingly.
The contractor shall be responsible under warranty against defects and for qualities agreed, also if the work is destroyed or damaged after the work reception (article 1860 par. 3).
With regard to apparent defects, pursuant to article 1862 par. 3, the beneficiary who received the work without reservations, is no longer entitled to invoke apparent defects of the work or the apparent lack of qualities agreed.
Pursuant to article 1709 par. 1 and article 1710 par. 1 letter d) of Civil Code, the beneficiary who discovered hidden defects of the thing, is obliged to notify the contractor within a reasonable period set according to the circumstances, under the penalty of forfeiture of the right to request rescission of the contract.
The action in warranty for defects is prescriptive, in the general limitation period of three years, calculated under the rules stipulated by article 2530 par. 1 and article 2531 of the Civil Code.
3.2 Obligations of the beneficiary
a. The obligation to pay the price
Pursuant to article 1854 of the Civil Code, the price for contracting may consist of a sum of money or any other goods or services and it has to be serious and determined or at least, determinable.
If the contractor agreement does not include clauses on the price, the beneficiary owes the price established by law or determinable under law or, in the absence of such provisions, the price determined in relation to the work performed and costs necessary for carrying out the work or provide the service, taking into account the usages.
In principle, the price is paid on the day and at the place of the work reception and has to be paid even in the situation when the work was destroyed or deteriorated before reception, because of defects of the material given by the beneficiary. On the contrary, when the work was destroyed or damaged before the reception without fault of the beneficiary, when the entrepreneur purchased the material, or destruction or damage had a cause other than defects in material given by the customer, he does not owe any money.
Under the provisions of article 1865-1867 of the Civil Code, the price can be:
- Estimated when concluding the contract;
- Determined by the value of the work performed, services provided or goods supplied (based on an estimate);
- Contractual (overall price).
Pursuant to article 1865 of the Civil Code, if the price of works or services was subject to estimation at the conclusion of the contract, the contractor must justify any price increase; the beneficiary is not compelled to pay this increase unless it resulted from works or services, which could not be foreseen by the contractor when concluding the contract.
However, if the price is determined by the value of the work performed, services provided or goods supplied, based on an estimate proposed by the contractor and accepted by the beneficiary when concluding the contract, the contractor is obliged to account to the beneficiary about the progress of work, about services provided and costs incurred, the price following to be established definitively at the end of the work (Gheorghiu, 2012: 1890).
Another option for setting the price is the lump price, regulated by article 1867 of the Civil Code. If the contract was concluded for an inclusive price, the beneficiary must pay the agreed price and the contractor must accept it; the two sides cannot require modification of that price. In the absence of contrary stipulation, the lump price remains unchanged even if changes to the initial performance conditions provided occur.
If the beneficiary does not fulfil his obligation to pay the price, the entrepreneur has a legal mortgage on the work, created and preserved under the law, to guarantee payment of the price due for the work.
If the beneficiary does not make reception of the property within 6 months from the date agreed for reception or completion (in the context where the work or service were finished later), the contractor, after notifying in writing the beneficiary, is entitled to sell the property.
After deducting the price for the work and selling costs, the contractor is obliged to register the difference at the beneficiary's disposal.
Not only does the entrepreneur benefit from legal protection means if the beneficiary fails to pay the price but also persons who, under a contract concluded with him, have worked for providing the services or carrying out the work contracted. These, if not paid by the contractor, have direct action against the beneficiary, up to the amount that the latter owed to the contractor when the action was brought to Court (article 1856 of the Civil Code). Recently, the doctrine has reviewed the direct action of the entrepreneurship matter governed by article 1856 of the Civil Code of 2009 and article 1488 of the Civil Code of 1864 in the context of the broader discussion on the theory of groups of contracts, the pioneer of which is considered the French professor Bernard Teyssie, in the mid-70s (Ratoi et al, 2013: 332), which was defined as the sum of contracts bound by the general purpose for which they were concluded--achieving a single operation, by preserving the identity of each contract (Popa, 2013: 308).
The direct action, found in the matter of contracting and in the previous legislation (article 1488 Civil Code of 1864) (Statescu and Barsan, 1995: 307; Filipescu and Filipescu, 2004: 86) is defined as a person's right to act in certain cases limitedly provided by law, against any contracting party with which has no connection whatsoever, invoking the contract in his/her favour, being third party in that contract (Pop et al, 2012: 198).
However, if the work was not completed as provided in the contract and the report for final reception was not made, those persons cannot claim their payment from the customer, because a debt of his towards the contractor cannot be retained, as it was shown in Bucharest Court--Commercial Court Practice -- 2000-2001 -- Bucharest Court of Appeal, Commercial Division, in December no. 1872/2000, p. 131 (Belu Magdo, 2012: 32).
b. The obligation to receive and take over the work
Within a reasonable time, depending on the nature of the work and practices in the field, the beneficiary is obliged to inspect the asset and if it fulfils the conditions established by contract, to receive it and then, where appropriate, to take it.
The delivery place of the work is where the reception was held. If, however, without good reasons, the beneficiary is not present or does not report promptly the result of verification to the contractor, the work is considered as received without reservations, and he will no longer be entitled to invoke apparent defects of the work or the apparent lack of agreed qualities. The same will be the case even if the beneficiary received the work with no reservations.
4. Termination of the Contractor Agreement
Since the contractor agreement is synallagmatic, its termination occurs generally under the conditions of common law for synallagmatic contracts (Belu Magdo, 2012: 33), but also in the case of special circumstances. Usually, the contract is terminated by its voluntary execution by the parties, but sometimes it may terminate as a result of sanctions imposed by the culpable conduct of a party or by accidental causes that hinder irrevocably the contract execution (Comanita and Comanita, 2013: 198). The execution of a voluntary obligation, regardless of its object, by the debtor, is called payment. Before existing a way to quash an obligation, payment is the voluntary and common way to execute the obligation (Lazar, 2007: 70).
4.1 Rescission or cancellation
Article 1872 of the Civil Code regulates where appropriate, the rescission or cancellation of the contract attributable to the contractor, in cases where, without justification:
- Complying with the agreed deadline for receiving the work became impossible;
- The work or service is not performed as agreed and within a period established by the beneficiary according to the circumstances, the contractor does not remedy the deficiencies found and does not change in the future, the execution manner of the work or service;
- Other obligations of the contractor under the contract or law are not executed.
The rescission or cancellation of the contract can sanction also the wrongful conduct of the beneficiary under article 1873, meaning that if he cannot start or continue the execution of the contract due to failure without justification, by the beneficiary, of his obligations, the contractor is entitled to obtain rescission or termination of the contract with exemplary damages, if it is the case.
4.2 Death of parties
Regarding the death of the beneficiary, it does not generate the termination of the contract unless it makes impossible or unnecessary its execution.
On the other hand, if the contractor dies or becomes, without fault, unable to finish the work or to provide the service, the situation is different as the contract was concluded in consideration of the entrepreneur's personal skills (in which case the contract is terminated ) or not. From the wording of the legal text, we note that article 1871 par. 1 uses the phrase "in consideration of the entrepreneur's personal skills while article 1852 par. 1 speaks of the "in consideration of his person (of the entrepreneur's)".
The beneficiary is required to receive the already executed part (if he can use it) and pay the value of the work performed and of expenses incurred in order to finish the work, but only if these works and charges are helpful, being, however allowed to demand the handing over of materials prepared and of plans to be used, with the corresponding obligation to pay adequate compensation.
5. The Contractor Agreement for Construction Works. General Terms and Delimitation of the General Form of This Agreement
Because of its practical importance, the entrepreneurship in constructions has benefited even from the previous Civil Code, of a special regulation; later, by special regulations, the legislature detailed the conclusion and execution of that kind of agreements (Toader, 2005: 212). As it is known, the legal regime of special agreements is supplemented by rules contained in special laws; these rules constitute special regulations in relation to the law of obligations regulated by the Civil Code (Florea, 2013: 8).
The current Civil Code proposes a special regulation of contracting in constructions, given that it is one of the most common forms of this contract (article 1874-1880 Civil Code) and that works resulting from these contracts have real estate character, being subject to rules stemming from the public interest of the urban domain.
In this form of contractor agreement, the obligations of parties are similar to those of the ordinary entrepreneurship, as the performed work is specific; there are some special requirements for parts without which the execution of the contract under favorable conditions could be questionable (Comanita and Comanita, 2013: 200).
The building entrepreneurship is legally defined as a contract whereby the contractor undertakes to execute works that, under law, require the issuance of a building permit (article 1874 of the Civil Code).
The object of this type of contract is limited to forms of work for which, pursuant to Law no. 50/1991, it is necessary a building permit. In addition, many special regulations shall be applicable to works which are the object of such contracts, among which: Law no. 10/1995 regarding quality in constructions, Law no. 114/1996 of housing, H. G. no. 766/1997 for the approval of regulations regarding quality in construction or, more recently, Law no. 185/2013 on the location and approval of means of advertising. Consequently, the criterion established by article 1874 refers exactly to the work that requires authorization, which means that in the hypothesis of works with identical external manifestations:
- Special rules of the Code (article1874-1880) or outside it will be applied, if for the work, Law no. 50/1991 requires authorization or
- Common rules on contractor agreements in general, if the special law does not require the condition of administrative authorization.
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PATRICK RARES LAZAR
Spiru Haret University
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|Author:||Lazar, Patrick Rares|
|Publication:||Contemporary Readings in Law and Social Justice|
|Date:||Jul 1, 2017|
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