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Construction newsletter | January 2014

28/01/2014

We wish to draw your attention to a major decision entered on 7 November 2013 by the Chambéry Court of Appeals.

In the said case, the project owner of a building construction development had entrusted structural works to a masonry company, which had, in turn, executed a subcontracting agreement with a Polish company.

The Chambéry Court of Appeals considered that it was proved in the said case that the subcontracting arrangements were not genuine, insofar as the Polish company’s contribution was limited to the mere secondment of its employees who were reporting directly to the masonry company. The purpose of this transaction was to lower the cost of labor and avoid the application of the French Labor Code to which the Polish workers were not subject, since they had not been declared to the relevant authorities.

The Chambéry Court of Appeals did not only condemn the Polish company and the masonry company for an unlawful loan of labor and for engaging in practices detrimental to the employees, but also ordered the project owner to pay a fine of €210,000 for relying, in connection with a construction project, on the services of companies using concealed labor through the covert use of employees.

This editorial also provides us with the opportunity to wish you a very happy new year, with an abundance of new construction projects!

CA Chambéry, 7 novembre 2013, n° 13/795, 13/00587


Focus

  • Off-plan sales and lack of sound insulation (2/3)
    Off-plan sale deeds are accurately reflecting provisions regarding sound insulation warranties according to which the seller warrants, in respect of the first occupant of the "property sold" and for one year from taking possession, that the works shall comply with the minimum requirements in terms of sound insulation stipulated by legal or regulatory provisions (French Construction and Housing Code, art L.111-1) ...

Construction contracts

  • End of the intrinsic financial completion guarantee
  • Lender’s liability in relation to a private house construction contract

Implementation of private works contracts

  • Maximum amount of payment guarantee stipulated in article 1799-1 of the French Civil Code

Construction insurance

  • Starting point of the 60-day time limit
  • Penalty for non-compliance with the 60-day time limit – unenforceability of the maximum cover mount

Sub-contracting

  • Second-level subcontracting – project owners’ obligations

Contractors’ legal liability

  • 10-Year Liability insurance and future problems
  • Definition of a structure
  • Builders' strict liability

Other liability schemes

  • Exclusion of performance warranty for inert parts separable from the structure seller
  • Contractor’s liability in the event of an error siting the structure in the absence of a project management consultant

Read the Construction newsletter | January 2014

Authors

Picture of Aline Divo
Aline Divo
Partner
Paris
Jean-Luc Tixier