SLOVENIA Law and Practice Contributed by: Blaž Ogorevc, Miha Štravs and Blaž Murko, Odvetniki Šelih & partnerji, o.p., d.o.o.
Landlords typically hold security deposits post - ed by tenants, usually in cash form, or the ten - ants provide other types of security, such as a bank guarantee or promissory note. 7. Construction 7.1 Common Structures Used to Price Construction Projects In construction agreements, the most common price clauses are either (i) unit prices, where the price of works is determined by the unit of meas - urement of the agreed works applied to the actu - ally implemented quantities of work, or (ii) fixed (lump-sum) prices, where the price is set as a total price for the entire scope of works. Con - struction agreements also commonly include a “turnkey” clause, in accordance with which the contractor independently undertakes to jointly execute all the works necessary for the con - struction and use of the entire building. At the same time, the agreed price also includes the value of any unforeseen and excess works but excludes the price impact of any missing works. Fixed-price clauses are also common as they allow for a shift of the price-change risk (up to 10% increase in price of elements) to the con - tractor. 7.2 Assigning Responsibility for the Design and Construction of a Project Responsibility for the design and construction of a project is split between the contractor and the project designer. The contractor and the project designer may be responsible for defects in the structure, which occur due to the building not being constructed in accordance with the design or the professional code of conduct, as well as the defects in the solidity of the structure, which is stricter, as the liability for defects in the solid -
ity of the structure extends over a period of ten years after handover and acceptance. If there is a defect in the project design, the pro - ject designer is liable. If the defect is due to the special nature of the site, the designer is liable, as it must take the relevant site conditions into account. However, the contractor may also be liable if it should have detected the defect due to the special nature of the site if it acted dili - gently. In the case of a defect in the material, the designer is liable if it has included inappropriate materials in the building design. The contractor may also be liable for a defect in the material if the correct material was planned but the con - tractor used the wrong material. For defects in the manner of execution, liability lies with the contractor. 7.3 Management of Construction Risk Construction risk is managed, to a certain extent, through the appointment of a construc - tion supervisor. The construction supervisor is responsible for the supervision of construction works so as to ensure that the statutory require - ments are complied with, that preventative action is taken and that defects are prevented in a timely manner. The contractor is also obliged to take out insur - ance against liability for damage in connection with its activity. The liability insurance must cover liability for damage caused to the investor or to a third party in connection with the per - formance of the contractor’s activities and must cover damage caused by negligence, fault or default of the contractor and its employees, up to an annual sum insured of at least EUR50,000. The investors commonly request that their con - tractors conclude insurance policies with higher insurance sums.
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