FRANCE Law and Practice Contributed by: Antoine Mercier, Myriam Mejdoubi and Gabriel Dalarun, DLA Piper France LLP
7. Construction 7.1 Common Structures Used to Price Construction Projects There are two main types of construction con - tract under French law: • fixed-price construction contracts ( marché à prix forfaitaire ), where the contractor carries out construction works (as detailed in docu - ments attached to the agreement) for a fixed price agreed prior to the execution of the works; and • quantity construction contracts ( marché aumétré ), where the contractor carries out construction works for a price based on the quantities used for the works. 7.2 Assigning Responsibility for the Design and Construction of a Project The owner can enter into: • separate contracts with the design team and the contractor(s), whereby responsibility for the design studies will mostly be placed on the design team, while the contractor(s) will be liable for the works; • a single “design and build” contract ( contrat de contractant général ) with a contractor who will also take responsibility for the design; and • a real estate development agreement ( contrat de promotion immobilière ), whereby a devel - oper – as agent – will appoint the design team and the contractors on behalf of the owner and be liable for both the design and the con - struction works. 7.3 Management of Construction Risk The following contractual devices are commonly used to manage construction risks.
Retention Provisions The owner is entitled to retain an amount not exceeding 5% of the entire price of the contrac - tor agreement in order to guarantee the remedia - tion of any defects arising on the date of accept - ance of the works. The contractor has the right to replace this retainer with a bank suretyship (cautionnement bancaire). Indemnity Provisions Although such provisions are enforceable in principle, a court may revise the amount of the indemnity if it is deemed to be obviously exces - sive or insufficient. Contract Provisions Regarding Penalties for Delay Delay penalties are calculated by multiplying the contract price by the rate of delay. The damages are payable, unless the delay was due to force majeure/unforeseen event, or was the fault of the owner. Mandatory Set of Warranties Covering Damages to the Construction These include: • a one-year warranty from the date of accept - ance of the works ( garantie de parfait achève- ment ), whereby the owner can claim for the repair of all defects that were not apparent at the date of acceptance of the works; • or two years after acceptance of the works, the owner can claim for the repair of damages to equipment of the buildings ( garantie bien- nale ); and • for ten years after acceptance of the works, the owner can claim for the repair of struc - tural damage caused to the building or where the ability to use the building is jeopardised ( garantie décennale ).
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