ANDORRA Law and Practice Contributed by: Elena Redondo, Albert Hinojosa and Marc Ambrós, Cases & Lacambra
of it, leaving the contractor or the other parties involved to be responsible. 7.3 Management of Construction Risk The risk of destruction, loss or deterioration of construction lies with the contractor, and the immediate consequence of such destruction, loss or deterioration is that the contractor cannot charge the price agreed by the parties. There - fore, it is necessary to differentiate between two scenarios: • when the contractor provides the work but not the materials because the client provides them (in these cases, the contractor must bear the risk of losing or deteriorating, as long as it is not attributable to the contractor or in default due to the contracting party not hav - ing received the work when it was agreed); and • when the contractor provides the work and the materials (the contractor will be responsi - ble for these damages as long as there is no default on the part of the contracting party). 7.4 Management of Schedule-Related Risk The reception of the construction project must be carried out within the term agreed by the par - ties. In the absence of any agreement, it will be understood that the term of termination of the work will be the usual for completion of the con - struction project, as agreed by the parties. Often, a conventional penalty is established as a guarantee of the contractor’s obligation to deliver the construction project within the agreed term, usually based on the days of delay in deliv- ery. Such conventional penalty shall be enforce - able when the delay in delivery is attributable to the contractor, provided that it acts with guilt or fraud, and the determination of the amount cor -
responds to the parties but may be moderated by the judicial authority if it is excessive. 7.5 Additional Forms of Security to Guarantee a Contractor’s Performance Other guarantees may be agreed upon to guar - antee the execution of a construction project, as long as both parties have accepted them. Comfort letters, parent guarantees and letters of credit are commonly used. 7.6 Liens or Encumbrances in the Event of Non-payment The contractor has a legal guarantee that sub - stantiates their right to receive the price of the construction project carried out. The guarantee consists of the retention of the property until the price agreed by both parties is paid. The contractor’s right to claim in relation to the contracting party to obtain the agreed price lasts 30 years. In cases where the client does not pay the agreed price to the contractor, and the contractor is a debtor of the subcontractor in the construction project, the latter may exercise direct claims against the contracting party, with the maximum limit of the amount owed to the contractor. 7.7 Requirements Before Use or Inhabitation The management plans, the zoning plans of the village and the regulatory ordinances will estab - lish the conditions of habitability of the residen - tial buildings and those destined for other uses. These conditions must respect the minimum requirements of the law. In general, the law requires obtaining a cer - tificate issued by the Andorran government to demonstrate that the residential building com - plies with the conditions of habitability. This cer -
34
CHAMBERS.COM
Powered by FlippingBook