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Construction across Europe: one industry, many legal systems

01/10/2010



Major construction projects have a lot in common, wherever you are in Europe, as do many facets of construction law.
Some legislation affecting the industry applies across the European Union, with that relating to public procurement being just one example.

Despite this, major differences can often arise between the approaches adopted by individual legal systems. This can lead to legal results which are surprising to construction professionals from another jurisdiction. The following are a few examples:

  • In the Ukraine, a developer may have to pay up to 10% of the estimated value of the project as a contribution to the cost of the infrastructure development.
  • Courts in the United Kingdom rarely enforce agreements to agree. As a result, problems can often arise when a contractor starts work in reliance on a developer’s letter of intent expressing an intention to conclude a contract in the future.
  • German law relating to standard terms and conditions is so stringent that it outlaws many standard terms seeking to limit liability in FIDIC and other international contract forms. This even applies when the parties involved are major companies.
  • Under Russian law, a contractor may exercise a lien over the project he has constructed and other property of the client in his possession if he is not paid in full.
  • In France, a subcontractor can under certain circumstances pursue a claim for payment directly against the employer, whether or not the main contractor is insolvent.
  • The Polish Civil Code provides that, under certain circumstances, an investor and a general contractor are jointly liable for payment towards a subcontractor, and that a subcontractor may demand payment from either of them as a result.
  • In Spain, if the contractor becomes insolvent the employer is not entitled to terminate the agreement, whatever its terms. The court must reach any decision regarding termination.
  • In the Netherlands, a contractor cannot be held liable for defects which are apparent when the development is taken over but which are not mentioned in the taking over certificate.

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Construction across Europe
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