Contractor delay, defects and the decennial warranty
The office of lawyer Ali Barakat in Baghdad sets out the rule on a contractor's delay in completing the work, and the architect's and contractor's warranty for what occurs within ten years by way of collapse of buildings and other permanent structures, under articles 868 and 870 to 874 of Civil Code No. 40 of 1951, published in the Iraqi Official Gazette, issue 3015, of 8/9/1951. The contractor's duties as to materials, and the inspection of apparent and hidden defects after handover, are the subject of a separate page: Contractor duties and building defects.
Delay in starting or in completing the work
If the contractor delays starting the work, or delays completing it to such an extent that it cannot in any way be hoped that the contractor will be able to perform it properly within the agreed period, the employer may rescind the contract without waiting for the delivery date to arrive, under article 868. The test is not any slight delay. It is a delay that reaches the point at which hope of completing the work as required, within the agreed period, has gone. The right to rescind is not suspended until the delivery date falls due.
That rule is read with the time clause in the construction contract. If the work is the construction of units in a residential complex, some of which have been sold off-plan, sale of the unit still concludes only by registration at the Real Estate Registration Department, as explained on the page Buying a residential unit off-plan in investment complexes. The employer's relationship with the contractor in respect of delay is governed by article 868, regardless of the path by which title is recorded.
If, during the course of the work, a defective method of performance appears, the employer may warn the contractor, require a return to the correct method, or claim rescission or that the work be entrusted to another contractor at the first contractor's expense, under article 869, on the detail set out on the page concerning duties and defects. It is enough to note here that delay beyond the agreed period, and a defect in the method while the work is in progress, are different paths. The first turns on the disappearance of any hope of timely completion. The second turns on a warning, a period and the possibility of repair, unless repair is impossible.
The ten-year warranty against collapse of buildings and permanent structures
The architect and the contractor warrant what occurs within ten years by way of total or partial collapse of buildings they have erected or of other permanent structures they have put up, even if the collapse arises from a defect in the land itself, or if the employer authorised the erection of the defective structures, unless the parties intended those structures to last for less than ten years. The ten-year period runs from the time the work is completed and handed over. Any term intended to exclude or limit this warranty is void, under article 870, first.
The preceding paragraph does not affect any right the contractor may have to recover from contractors who took the work from the contractor, under paragraph 2. The warranty in paragraph 1 also covers defects in the buildings and structures that threaten the strength and safety of the construction, under paragraph 3. The subject of this warranty is therefore not every defect in finishing, or every defect that can be seen on inspection. It is total or partial collapse, and a defect that threatens the strength and safety of the building, in buildings or other permanent structures, within ten years of completion and handover.
The claim on the warranty provided for in this article is extinguished on the expiry of one year from the time of the collapse or of the discovery of the defect, under article 870, fourth. The ten years are the period during which the warranty subsists. The one year is the time for bringing the claim after the collapse or after the defect comes to light.
How liability is shared between the architect and the contractor, and what falls outside the warranty
If the architect confined the role to preparing the design and was not charged with supervising performance, the architect is liable for defects that come from the design, not for defects that come from the method of performance. If the contractor worked under the supervision of an architect, or under the supervision of the employer who stood in the architect's place, the contractor is liable only for defects in performance, not for defects that come from error or want of care in preparing the design. If both the architect and the contractor are liable for a defect in the work, they are jointly liable, under article 871.
The architect and the contractor are released from the warranty laid down in the two preceding articles if it appears, from the circumstances in which the defects in the building came to light, that those defects arose from causes that were not foreseeable at the time the building was erected, under article 872.
Inspection of the work on completion, the invitation of the employer to take delivery by an official warning, and the running of the ten years from completion and handover, are read in articles 873 and 874 together with article 870. The handover from which the ten-year warranty runs is the handover that takes place after the work is completed, in fact or in the manner drawn by article 873 if the employer refuses without a legitimate reason. That link fixes the start of the period. It does not bring every apparent defect after inspection within the ten-year warranty.
If a party disputes the delay, or whether a defect falls within the warranty in article 870, or when the period began, or whether the claim has been extinguished by the expiry of the year, the dispute is heard by the Court of First Instance.
Legal basis and sources
Frequently asked questions
When may the employer rescind a construction contract for delay without waiting for the delivery date?
If the contractor delays starting the work, or delays completing it to such an extent that it cannot in any way be hoped that the contractor will be able to perform it properly within the agreed period, under article 868.
From when does the ten-year warranty run, and how long is the time for bringing a claim after collapse or discovery of the defect?
The ten years run from the time the work is completed and handed over, under article 870, first. The claim on this warranty is extinguished on the expiry of one year from the time of the collapse or of the discovery of the defect, under paragraph 4.
Does the ten-year warranty apply to every defect that appears in the building?
No. The warranty covers total or partial collapse, and defects in buildings and permanent structures that threaten the strength and safety of the construction, under article 870. Defects that arise from causes that were not foreseeable at the time the building was erected release the architect and the contractor from this warranty, under article 872.
Related topics and articles
- 01Contractor duties and building defects under the Civil CodeThe contractor's duties and the warranty for defects in the work under Civil Code articles 864 to 890, without repeating the ten-year structural warranty.
- 02Buying a residential unit off-plan in investment complexesBuying a residential unit off-plan: sale concludes only by registration, the promise to sell, and the investment licence under Law 13/2006.
- 03What a landlord reviews before and after a lease in BaghdadWhat a Baghdad landlord reviews before and after a lease under Rent Law 87/1979 and the Civil Code.
- 04Sale or mortgage and the real-estate tax step in governorates not organised in a regionSale or mortgage and the real-estate tax step in governorates not organised in a region, under Law 162/1959 and Land Registration Law 43/1971.
- 05Ending co-ownership of shared propertyHow co-ownership of property ends under the Civil Code: agreed partition by registration, a First Instance claim, or sale if it cannot be divided.