By signing a contract for construction work the customer and the contractor may in addition to obligations under the contract agree on a contractor's guarantee, which will establish an additional and separate legal relationship. Moreover, current legislation (as well as the Building Act draft) sets an obligation for the contractor to ensure conformity of construction work with established requirements as well as safety for a specified period. The contractor's obligation arising under the Building Act is called a building guarantee. Both the building guarantee and the contractor's guarantee complement the general rules on contractor's liability. However, sometimes the contractor may be held liable in civil law (for causing unlawful damage) to parties it has no contractual relationship to (i.e. third parties).
The legal delimitation of the four institutes – contractor's liability, contractual guarantee and building guarantee work as well as civil law liability of the contractor – is legally problematic. In particular, it is debatable who and when should benefit from a building guarantee, what is the legal content of such an institute and what agreements it allows.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
