Construction Work Contracts: Legal Obligations and Liability

Leasing of Work

A lease agreement commits the execution of a specific work in exchange for a price that the lessee is obligated to pay. In a broad sense, work refers to any activity committed to a specific outcome; however, this context focuses strictly on physical construction.

Key Parties

• Contractor: The lessor.
• Owner or Promoter: The lessee.

Risk and Contractual Obligations

If a project is destroyed before delivery due to causes not attributable to the contractor, the obligation is extinguished by supervening impossibility. Consequently, the promoter's obligation to pay is also extinguished.

Legal Provisions (Civil Code)

• Art. 1589 CC: If the owner provides the materials, they must bear the loss if the work is destroyed before delivery, unless the owner was in default of receipt.
• Art. 1590 CC: If the contractor provides only labor, they cannot claim payment if the work is destroyed before delivery, unless the owner was in default or the destruction resulted from poor material quality that the contractor warned the owner about in time.

Exceptions to Obligation Extinction

The promoter remains obligated to pay in the following scenarios:

• Default of Receipt: The promoter unjustifiably refuses to accept the completed work.
• Poor Material Quality: The contractor performs work using materials supplied by the developer, provided the contractor formally notified the owner of the material defects.

Liability for Defects

The contractor is held responsible for vices or defects that appear after completion. The contractor's liability period is 10 years.

If the owner sells the property to third parties, the contractor's liability extends to the buyer for the remainder of the 10-year period, creating a joint and several liability framework.

Subcontracting

Subcontracting occurs when the primary contractor delegates the execution of the work to a third party.

Direct Action Rights

Under Art. 1597 CC, those who provide labor and materials for a project have a direct action against the owner for the amount owed to them by the contractor. In this case, the subcontractor exercises their own right, and the funds recovered do not enter the primary contractor's assets.