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Building contracts in Italy: all liabilities and duties you should consider

Building contracts in Italy: liabilities of the contractor for building works

Whether you are building a new property in Italy, or renovating an existing Italian property, having the right building contract is vital to ensure that everyone involved knows their rights and responsibilities. A building contract constitutes a legally binding agreement, recorded in written form between two parties; one or more property owners and one or more contractors.

building contracts in Italy

A building contract sets forth all the terms and conditions under which construction or renovation work is to be carried out. This includes, but is not limited to, the basis of remuneration, time scale, and penalties, if any, for failure to comply with the terms of the contract.

A building contract acts as a reference point and a legal framework. It is an extremely important document that outlines the scope of work, risks, duties, and legal rights and liabilities of both the contractor and the property owner, the latter, hereinafter referred to as, the principal.

The contractor’s obligations

The contractor has a legal obligation to guarantee the quality of the final work and is liable for carrying out a duty to observe the general technical criteria relating to the work commissioned.  The contractor is obliged to verify the feasibility of the project or the instructions given by the principal. However, if the principal’s instructions  are incorrect, the contractor can only be exempted from liability if there is proof that disagreement over such instructions was expressed and that despite this, the contractor has been induced to execute instructions at the behest of the principal; otherwise, according to the Court of Appeal (21 September 2017 no. 21959), in the absence of such evidence, the contractor is entirely liable for any defect or imperfection in the building works.

The role of the construction company in considering geological features of building land

Investigating building land is one of the contractor’s obligations. The correct development of a property depends on the adequacy of the geological characteristics of the building land on which the foundations are to be placed. According to the Court of Appeal (30 January 2017, no. 2304), the contractor, jointly with the architect and the surveyor are liable for any defects related to the failure of property foundations due to any geological characteristics of the building land, not duly considered during the construction works.

However, it is interesting to consider a further case:  a contractor can be held liable for construction flaws resulting from defects and unsuitability of the land due to imperfect or erroneous project information provided by the principal (Court of Appeal 21 November 2016, no. 23665).  

The liability of Italian property developers in building contracts

The liability of property developers is worth pointing out (pursuant to art. 1669 of the Italian Civil Code). Where a property developer constructs a building with the involvement of third parties but acts as project manager to coordinate construction activities, the court will consider the project manager liable for any defects in work, provided that the defects are proven attributable to the property developer’s sphere of exercise and control. (Court of Appeal 29 November 2016, no. 24249).

With regard to building contracts, if the damage suffered by the principal is a consequence of a fault  made by the contractor and project manager, both the contractor and the project manager will be held jointly and severally liable for damage. While the faults may constitute independent and distinct illegal acts, or violations of different laws, the actions and omissions of both the contractor and the project manager will be considered to have contributed to producing the damage.

Project management: liabilities and duties

For the purpose of building contracts, a project manager engaged on behalf of the contractor is considered to have a different role from a project manager engaged by a principal. The contractor’s project manager has a legal duty to provide, from a technical point of view, the execution of work, organising and ensuring that it is carried out in a way that meets health and safety legislative requirements for all workers and third parties involved. A project manager who is working on behalf of the principal is limited to the task of checking that work corresponds to the project plan and reporting this to the principal. So long as these obligations are fulfilled, the principal’s project manager cannot legally be held co-liable, with the contractor, for any damages caused to the principal through defective execution of work and/or by the imprudent execution of the works aimed at project completion.

Finally…

As you can see, issues concerning liabilities related to building contracts represent a complex matter and, for this reason, it is of fundamental importance to engage a lawyer to advise on and draw up contracts. Preparing for and undertaking any construction work inevitably involves a lot of paperwork. Depending on the nature of the project and what you are looking to achieve, a variety of contracts or agreements might be required.

Should you need further information concerning building contracts, feel free to contact De Tullio Law Firm at the following email address info@detulliolawfirm.com Our legal professionals will be glad to provide you with guidance.

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