GREECE Law and Practice Contributed by: Nikolaos Koulocheris, Ioannis Charalampopoulos, Rozita Karasso and Dimitra Kotsovelou, Machas & Partners
tion costs or damages if provided by law or contract. The lease agreement may include specific terms on compensation and early termination in such cases. 6.23 Remedies/Damages for Breach If a tenant breaches a commercial lease, the landlord may claim unpaid rent, eviction and damages. Under Greek law, damages are not unlimited; the landlord can recover actual losses, including lost rent for the remaining term, provided that they take reasonable steps to mitigate losses. Penalty clauses for early ter - mination are enforceable if agreed in the lease. Landlords typically hold security deposits, usually equal to one to three months’ rent, in cash or bank guarantee (letter of credit). The deposit is returned upon lease expiry if no outstanding obligations exist. 7. Construction 7.1 Common Structures Used to Price Construction Projects The most common pricing structures for construc - tion projects are fixed price (lump sum), cost-plus and unit-price contracts. Fixed price arrangements provide certainty, as the contractor delivers the pro - ject at an agreed-upon price regardless of actual costs. Cost-plus contracts reimburse the contrac - tor for actual costs incurred, plus an agreed margin, offering flexibility but limited predictability. Unit-price structures establish fixed rates per unit of work, com - bining elements of certainty and flexibility, especially for projects where exact quantities are uncertain. The choice depends largely on the project’s complexity, scope clarity, risk allocation preferences and the level of control desired by the parties involved. 7.2 Assigning Responsibility for the Design and Construction of a Project Common methods include Design-Bid-Build, Design- Build and Construction Management models. In Design-Bid-Build design, responsibility rests fully with the owner’s architects or engineers, with contractors responsible only for execution. Design-Build assigns both design and construction duties to a single entity, streamlining accountability, reducing disputes and enhancing efficiency. The Construction Manage -
ment method separates design and construction but involves a construction manager co-ordinating early on, offering greater flexibility and control to the owner. Allocation of responsibilities depends on pro - ject complexity, timelines, cost predictability and the owner’s expertise, balancing risk management with clear accountability. 7.3 Management of Construction Risk Key contractual devices used to manage construc - tion risk include indemnification clauses, warran - ties, limitation of liability provisions, and waivers of consequential damages. Indemnifications allocate responsibility by obligating parties to compensate for specified losses. Warranties ensure work quality and performance standards. Limitations of liability cap potential exposure, providing predictability, while waivers exclude recovery for certain indirect dam - ages. However, these provisions are subject to legal constraints, including statutory prohibitions against gross negligence, intentional misconduct or unfair contractual terms. Courts frequently scrutinise such clauses for reasonableness and clarity, ensuring they do not contravene public policy or mandatory laws governing construction contracts. 7.4 Management of Schedule-Related Risk Schedule-related risks are managed primarily through contractual mechanisms, including milestone dead - lines, liquidated damages, bonus incentives and detailed delay provisions. Parties often agree upon liquidated damages, entitling owners to monetary compensation if specified milestones or completion dates are missed, providing predictability and incenti - vising timely performance. Contracts typically include clear definitions of excusable versus non-excusable delay, force majeure clauses and extension of time provisions. While parties have considerable flexibility in structuring such terms, courts commonly require that liquidated damages provisions represent genuine pre-estimates of loss, rejecting clauses that function as penalties or disproportionately punitive measures. 7.5 Additional Forms of Security to Guarantee a Contractor’s Performance It is common for project owners to require additional security measures to ensure contractor performance, particularly on high-value or complex projects. Fre -
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