Liability of contractors

Liability of contractors

Construction lawyers in The Netherlands

If there is a deficiency or a construction defect, the executive contractor can be liable. It is important for the client to take action as soon as possible if he finds a construction defect. The time of completion of the building is (also) important, because the contractor is not liable for defects that the client in all reasonableness should have found at the time of completion.

Completion of the building

Article 7:758 of the Civil Code of The Netherlands states that the work is considered completed after acceptance of the work by the client. To attain completion, the acceptance by the client of the work in its completed condition has to be established. In this, it has to be prevented that the client can hold back completion by inaction. For that reason there is a legal stipulation that states that after notice has been given by the contractor that the work is ready for completion, the client has to act, on penalty of loss of rights. If the client does not proceed to inspection of the work within a reasonable term after said notice and accepts the work (whether or not with reserve), respectively rejects the work (listing the defects), the work is considered to be tacitly accepted by the client. What constitutes a reasonable term depends, among others, on the scope and verifiability of the work.

Exceeding term of completion

The contract for services for the work always includes a term within which the work is to be completed. Exceeding this term is mostly sanctioned with a penalty or a deduction of the contract price. Discussions often occur between the contractor and the client on extension of the construction time and the number of days not worked due to weather conditions, for example if there is frost. If the penalty is granted, the contractor will often appeal to moderation. This can be at issue if, for example, the party invoking the fine has suffered no or little damage by the overdue completion. However, the starting point is that moderation shall not be applied unless there are reasonable and just reasons to do so. The construction lawyer of the AMS law firm is more than willing to advise you on the possibilities for moderation or, in contrast, for maintaining a penalty owed.

Opportunity for repairs

If it has been determined that there are defects to the work, the client is in principle obliged to give the contractor the opportunity to repair the defects himself, unless he cannot be required to do so due to the circumstances of that particular case. This can apply if, for example, no successful results can in all reasonableness be expected. The client is entitled to claim that the contractor repairs the defects within a reasonable period of time, unless the costs of repair would be in no proportion to the interest of the client in repairs, compared to, for example, compensation.

Brief time limit

The time limit for claims for defects found is relatively brief and results from the stipulations in article 7:761 of the Civil Code of The Netherlands. This article contains the so-called ‘double’ time limit. In the first place there is a two-year term that commences from the time that the client has protested against a defect. The second term commences from the moment of completion of the work and depends, time-wise, on the nature of the work; there is a twenty-year term for buildings and a ten-year term for other works. Paragraph 3 of article 7:761 of the Civil Code of The Netherlands contains a possibility to extend the time limit, if the legal claim under the stipulations in paragraphs 1 and 2 would expire between the time that the contractor has notified the client that he shall examine or repair the defect, and the time at which he obviously considers the examination and the repair attempts terminated. In that case the time limit is extended pursuant to article 3:320 of the Civil Code of The Netherlands.

Construction lawyer in The Netherlands

Law firm AMS is based in Amsterdam, The Netherlands. Our Dutch construction lawyers have gained a broad experience in advising and litigating for (international) companies and individuals. The attorneys are highly involved with their client’s interests and offer a sharp and transparent fee structure. Should you require more information on construction law in The Netherlands, or should you have any question with respect to litigation in The Netherlands, please feel free to contact one of the lawyers at our Dutch law firm in Amsterdam.