{"id":139116,"date":"2026-04-21T12:14:49","date_gmt":"2026-04-21T12:14:49","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=139116"},"modified":"2026-04-21T13:49:29","modified_gmt":"2026-04-21T13:49:29","slug":"armenia-construction","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/armenia-construction\/","title":{"rendered":"Armenia: Construction"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-139116","comparative_guide","type-comparative_guide","status-publish","hentry","guides-construction","jurisdictions-armenia"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">HAP<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/01\/hap.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">HAP<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/01\/hap.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Construction laws and regulations applicable in Armenia<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your jurisdiction a common law or civil law jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Republic of Armenia (RA) has a civil law system, with its Civil Code (CC) adopted in 1998 and in force since 1999.<\/p>\n<p>In Armenian jurisdiction, laws enacted by the legislature are the main source of law, and legal relations are governed by written rules rather than judicial precedent, which distinguishes it from common law systems.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the key statutory\/legislative obligations relevant to construction and engineering projects?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Construction and engineering works in Armenia are regulated by the CC, the Land Code, the Law on Urban Development, and other relevant legislation.<\/p>\n<p>The CC and Land Code establish the general legal framework, while the specific requirements for carrying out work and other procedural details are governed by sector-specific laws and subordinate regulations.<\/p>\n<p>Of particular importance is Government Decision No. 596-N (Decision) dated 19 March 2015, titled \u201cOn Establishing the Procedure for Issuance of Permits and Other Documents for Construction in the RA, and on Annulment of Certain Government Decisions.\u201d<\/p>\n<p>This Decision prescribes the procedural rules for architectural-planning assignments, construction permits, extensions, completion acts, and occupancy permit, and it is supplemented by Annexes that define document forms, expertise procedures and the categorization of construction objects.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any specific requirements that parties should be aware of in relation to: (a) Health and safety; (b) Environmental; (c) Planning; (d) Employment; and (e) Anti-corruption and bribery.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><strong>(a) health and safety;<\/strong><\/p>\n<p>The Labor Code (LC) of the RA establishes the fundamental rules and requirements for protecting employees\u2019 health and ensuring workplace safety.<\/p>\n<p>In addition, each employer, considering the risks associated with the work and its impact on the employee\u2019s health, must implement internal regulations to ensure the safe performance of work.<\/p>\n<p>Simple examination of design documents is carried out in a volume sufficient to verify the compliance of design documents with the mandatory requirements of legislative and regulatory technical documents of the RA aimed at ensuring the reliability, stability, safety, as well as human health of the architectural and construction and external and internal engineering systems of an urban development\u2024<\/p>\n<p><strong>(b) environmental issues;<\/strong><\/p>\n<p>Before obtaining a construction permit, a report assessing the potential environmental impact of the activity must be submitted. Specific requirements for the classification and removal of construction waste from the site must also be provided. Urban planning documents are subject to three types of expertise based on risk level:<\/p>\n<p>Simple expertise \u2013 for Category III and some Category II objects.<br \/>\nState comprehensive expertise \u2013 for Category IV and V objects.<br \/>\nSpecial comprehensive expertise \u2013 for Category V objects.<\/p>\n<p>State comprehensive expertise is required when, in addition to urban planning compliance, approvals are needed in areas such as environmental protection, cultural heritage, safety, infrastructure, and other technical requirements.<\/p>\n<p>It is conducted with the participation of relevant state authorities and requires a prior positive environmental impact assessment.<\/p>\n<p><strong>(c) planning;<\/strong><\/p>\n<p>Decision and its Annexes set out the general list of required documents, typically including ownership or lease documents, an architectural-planning assignment, approved project documentation, required expert opinions, construction site safety plans, and proof of payment of applicable fees.<\/p>\n<p>The exact requirements vary depending on the project\u2019s category and location.<\/p>\n<p><strong>(d) employment; and<\/strong><\/p>\n<p>Employment relationships are governed by LC.<\/p>\n<p>Employment contracts may be fixed-term or indefinite, with fixed-term contracts allowed only in limited cases provided by law.<\/p>\n<p>In construction, works are typically performed by contractors, who are responsible for hiring and managing their workforce. Employment relationships cannot be replaced by service contracts where the work is performed under the employer\u2019s control and fixed working hours.<\/p>\n<p>Certain professionals involved in urban development (such as designers and engineers) must meet qualification and, where applicable, licensing requirements.<\/p>\n<p>In the field of urban development, standard forms of contracts with specialized professionals are established by Urban Development Committee of RA.<\/p>\n<p><strong>(e) anti-corruption and bribery.<\/strong><\/p>\n<p>The Criminal Code of the RA provides for criminal penalties for bribery, which apply to both natural people and legal entities.<\/p>\n<p>In the case of legal entities, liability measures may include fines, temporary suspension of the right to engage in certain types of activities, compulsory liquidation, as well as a prohibition on carrying out activities within the territory of the Republic of Armenia.<\/p>\n<p>At the same time, under the Law of the RA on Procurement, persons are not eligible to participate in procurement procedures if, within the previous five years, they have had a criminal conviction for accepting a bribe, giving a bribe, acting as an intermediary in bribery, or for other crimes directed against economic activity as defined by law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What permits, licences and\/or other documents do parties need before starting work, during work and after completion? Are there any penalties for non-compliance?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><strong>Required permits and documents<\/strong><\/p>\n<p>Construction activities in Armenia require a set of permits and approvals at different stages:<\/p>\n<p><strong>Before starting work:<\/strong><\/p>\n<ul>\n<li>Design permit (architectural-planning assignment)<\/li>\n<li>Approved project documentation (including, where applicable, standard reusable designs)<\/li>\n<li>Relevant expert opinions (e.g. environmental, cultural heritage, health, fire and technical safety, transport, etc.)<\/li>\n<li>Guarantee letter confirming compliance with legal and technical requirements<\/li>\n<\/ul>\n<p><strong>During construction:<\/strong><\/p>\n<ul>\n<li>Construction (building\/installation) permit<\/li>\n<li>Compliance with approved designs and applicable regulations<\/li>\n<\/ul>\n<p><strong>After completion:<\/strong><\/p>\n<ul>\n<li>Completion (final) act<\/li>\n<li>Operation (use) permit confirming the right to use the completed building<\/li>\n<\/ul>\n<p>Urban planning documentation may also be subject to expert examination, resulting in a professional conclusion on compliance with Armenian legislation and technical standards\u2024<\/p>\n<p><strong>Penalties for non-compliance<\/strong><\/p>\n<p>Administrative liability applies for violations such as:<\/p>\n<ul>\n<li>Carrying construction, reconstruction, demolition, or installation without required permits<\/li>\n<li>Continuing unauthorized construction after suspension<\/li>\n<li>Failing to complete construction within prescribed timeframes<\/li>\n<li>Using a building without an operation permit<\/li>\n<\/ul>\n<p>Sanctions typically include fines and other administrative measures.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is tort law or a law of extra-contractual obligations recognised in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes &#8211; tort law is recognized in Armenia, but under civil law terminology.<\/p>\n<p>It is governed by the CC as \u201cliability for harm\u201d (extra-contractual obligations \/ delict).<\/p>\n<p>A person who causes harm must compensate it in full.<\/p>\n<p>Liability generally requires:<\/p>\n<ul>\n<li>harm<\/li>\n<li>unlawful act<\/li>\n<li>causation<\/li>\n<li>fault (with some strict liability exceptions)<\/li>\n<\/ul>\n<p>In short: Armenia has a full tort system, just framed as extra-contractual liability rather than \u201ctort law.\u201d<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Who are the typical parties involved in a construction and engineering project?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the field of urban development, the primary actor is the developer, who is either the property owner or a user legally entitled to modify the property.<\/p>\n<p>Other key participants include entities responsible for preparing project documentation, conducting expert reviews to ensure compliance, carrying out construction work, and supervising quality. These actors operate under the authorities granted by the Law on Urban Development of the RA.<\/p>\n<p>The property owner may choose to execute construction works independently, engage designers and contractors on a contractual basis, or even transfer their rights to another individual or organization.<\/p>\n<p>One of the key parties involved in a construction and engineering project is the competent authority-the head of the community (and in Yerevan, in certain cases, also the head of the administrative district)-who issues the necessary permits and other documents for the immovable property being developed within their administrative jurisdiction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most popular methods of procurement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Public procurement is carried out under the Law on Public Procurement of the Republic of Armenia, primarily through a competitive process.<\/p>\n<p>Typically, the participant offering the lowest price is selected; however, in certain cases, non-price criteria may also be considered, which are related to the subject of the contract and help provide a more comprehensive evaluation of the proposals.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most popular standard forms of contract? Do parties commonly amend these standard forms?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the CC a construction contract is specifically regulated to organize the execution of construction works in accordance with their characteristics.<\/p>\n<p>By law, such a contract may be concluded for the construction of buildings, structures, or other facilities, as well as for similar types of works.<\/p>\n<p>CC sets out the rights and obligations of the parties and provides for additional contractual provisions that reflect the specific nature of the works to be performed. These rules serve as a legal framework to ensure that construction projects are carried out in an orderly and predictable manner.<\/p>\n<p>Standard forms of contract<\/p>\n<p>Under CC construction projects are typically governed by construction contracts and design and survey (engineering) contracts, which regulate the execution of work and the parties\u2019 rights and obligations.<\/p>\n<p>While international standard forms (e.g., FIDIC) may be used in practice, especially in large projects, the Civil Code framework remains primary.<\/p>\n<p><strong>Amendments<\/strong><\/p>\n<p>Yes, parties commonly amend these contracts to reflect project-specific requirements, risk allocation, and technical details.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions or legislative regimes affecting procurement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Procurement in the RA is governed by comprehensive legislative framework primarily established by the Law on Procurement. This law regulates the procurement process, including the rights and obligations of the parties involved, and operates alongside the CC and other applicable legal acts.<\/p>\n<p>Public procurement is subject to fundamental principles such as competition, transparency, publicity and non-discrimination, which must be observed throughout the procurement process.<\/p>\n<p>The law also imposes eligibility restrictions on participants. Entities may be excluded from procurement procedures in cases such as insolvency, certain criminal convictions, inclusion in restricted supplier lists, or involvement in anti-competitive conduct.<\/p>\n<p>In addition, all participants are entitled to equal treatment; however, certain limitations may apply in specific cases, including for reasons related to public interest or national security.<\/p>\n<p>Procurement must be carried out through legally prescribed procedures, including tendering, electronic auctions, requests for quotations and, in limited circumstances, single-source procurement. Contracting authorities are required to strictly follow these procedures.<\/p>\n<p>Furthermore, detailed rules on procurement processes, documentation, planning and oversight are established through secondary legislation adopted by the Government.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do parties typically engage consultants? What forms are used?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>According to the CC, the client may enter into an agreement with an architect or an engineering organization to supervise the work carried out by the construction contractor, clearly specifying the scope of the architect\u2019s authority and responsibilities.<\/p>\n<p>In the public sector, consultants or supervisors can also be engaged to oversee the procurement process.<\/p>\n<p>They act as advisors to the client, ensuring compliance with procedures, the law, and the public interest, and their recommendations are discussed with all parties involved.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is subcontracting permitted?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Domestic legislation allows for subcontracting, and it is particularly applicable for large-scale work.<br \/>\nSpecifically, unless the contract between the parties or the law requires that the work specified in the contractor\u2019s agreement must be performed personally, the contractor has the right to involve other people (subcontractors) in fulfilling their obligations.<\/p>\n<p>However, if a subcontractor is engaged in the performance of work in violation of the law or the contract, the risk is borne by the contractor, since the contractor is liable for any damage caused in the execution of the contract with the participation of the subcontractor.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are projects typically financed?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Private construction projects are typically financed through loans provided by banks or lending institutions, while public sector projects may also be funded through government budget allocations in accordance with a government decision.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What kind of security is available for employers, e.g. performance bonds, advance payment bonds, parent company guarantees? How long are these typically held for?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Within a construction contract, there may be an obligation to insure against risks related to the construction works; however, the law requires that such insurance does not release the party from the duty to take necessary measures to prevent an insurable event.<\/p>\n<p>Moreover, the construction contract may specify a warranty period during which the contractor guarantees that the constructed facility complies with the design documents and can be operated in accordance with the contract within the specified period.<\/p>\n<p>The RA Law on Urban Development provides for cases where the examination of design documents and technical quality control can be replaced by a guaranteed agreement concluded by the contractor, confirming that the construction works comply with the design and the relevant documents.<\/p>\n<p>In Armenian construction practice, employers typically rely on a range of contractual and financial securities, although these are not exhaustively regulated by law and are largely shaped by contract.<\/p>\n<p><strong>Common types of security in practice.<\/strong><\/p>\n<p><strong>Performance bonds:<\/strong> ensure proper completion of works, usually issued by banks or insurers<\/p>\n<p><strong>Advance payment bonds: <\/strong>secure repayment of any advance paid to the contractor<\/p>\n<p><strong>Parent company guarantees (PCG): <\/strong>Used where the contractor is part of a group<\/p>\n<p>Retention: A portion of payments withheld until completion \/ defects period<\/p>\n<p><strong>Guarantee agreements: <\/strong>Contractor may guarantee compliance of works with design and technical requirements (sometimes replacing state technical control)<\/p>\n<p><strong>Duration:<\/strong><\/p>\n<ul>\n<li>Performance bonds: typically, valid until completion and acceptance, sometimes extended through the defects liability (warranty) period<\/li>\n<li>Advance payment bonds: valid until the advance is repaid or amortized<\/li>\n<li>Retention \/ guarantees often held until the end of the warranty period<\/li>\n<\/ul>\n<p><strong>Insurance and warranty\u0589<\/strong><\/p>\n<ul>\n<li>Construction contracts often require insurance for construction risks, but under Armenian law this does not relieve the contractor from taking preventive measures<\/li>\n<li>Contracts usually include a warranty period, during which the contractor guarantees compliance with design and proper operation<\/li>\n<\/ul>\n<p>Security is widely used and contract-driven, with performance bonds, advance payment bonds, and guarantees being standard, typically lasting until completion and\/or the warranty period.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there any specific legislation relating to payment in the industry?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Payment matters are primarily governed by the CC and are based on the principle of freedom of contract. Accordingly, parties are free to determine payment terms, schedules and certification procedures.<\/p>\n<p>At the same time, payments are subject to general financial regulations, in particular the Law of the Republic of Armenia on Currency Regulation and Currency Control.<\/p>\n<p>Under this law, monetary obligations for works and services within the territory of Armenia must generally be denominated and settled in Armenian drams, subject to certain exceptions (for example, in transactions involving non-residents or other cases provided by law).<\/p>\n<p>In addition, payments between legal entities are required to be carried out in non-cash form (bank transfer) in accordance with applicable financial regulations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are pay-when-paid clauses (i.e clauses permitting payment to be made by a contractor only when it has been paid by the employer) permitted? Are they commonly used?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Armenian law does not specifically regulate or provide for pay-when-paid clauses. However, under the principle of freedom of contract established by CC, parties are generally free to include such provisions in their agreements and apply them based on mutual consent.<\/p>\n<p>In practice, such clauses may be used, particularly in subcontracting arrangements, although they are not expressly regulated by law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do your contracts contain retention provisions and, if so, how do they operate?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Retention clauses are also typically included in construction contracts in practice. Specifically, the contract may provide that a portion of the amount payable after the signing of the handover-acceptance certificate (usually determined as a percentage) is withheld as a warranty payment until the end of the warranty period.<\/p>\n<p>The parties may also agree that, subsequently, the employer may recover any damage incurred from this amount without the contractor\u2019s consent.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do contracts commonly contain liquidated delay damages provisions and are these upheld by the courts?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the parties may also provide in the contract for the payment of liquidated damages in the event of a delay.<\/p>\n<p>The CC allows for the establishment of liability measures in case of breach of the initial, final, or intermediate deadlines for the performance of work.<\/p>\n<p>The employer is not required to prove the existence of actual damage, and in the event of a breach, payment is due regardless of actual loss.<\/p>\n<p>At the same time, as a rule, the CC stipulates that penalties may not exceed 48% per year or the total amount of the obligation when all damages are taken together and the total amount of all penalties may not exceed the principal amount of the outstanding obligation.<\/p>\n<p>Any contractual provision that contradicts these rules may be deemed invalid by the court.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are the parties able to exclude or limit liability?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The parties may agree to exclude or limit liability, provided that such provisions do not contradict the law.<\/p>\n<p>However, the CC of the RA stipulates that any clause releasing the contractor from liability for certain defects is invalid if it is proven that such defects arose due to the contractor\u2019s fault or negligence.<\/p>\n<p>At the same time, where the law grants the employer the right to choose remedies for liability, the employer may, at its discretion, decide not to provide for or enforce such remedies under the contract.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on termination? Can parties terminate for convenience? Force majeure?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the CC of RA, the parties may terminate the contract in the event of a material breach or on other grounds provided for in the contract.<\/p>\n<p>At the same time, the employer has the right to withdraw from the contract at any time before the delivery of the work, by paying the contractor an amount equivalent to the value of the work performed up to that point.<\/p>\n<p>In addition, the employer is obliged to compensate the contractor for damage caused by the termination of the contract, calculated as the difference between the total contract price and the amount already paid for the work performed.<\/p>\n<p>With respect to force majeure situations, the CC considers them as non-performance of obligations due to extraordinary and unforeseeable circumstances.<\/p>\n<p>As a rule, in such cases, liability may be excluded unless the parties have agreed otherwise in the contract.<\/p>\n<p>In other words, force majeure may serve as a basis for exemption from liability if the contract contains a relevant provision or does not expressly exclude it; however, the parties may also specifically stipulate that such circumstances do not relieve a party from liability.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What rights are commonly granted to third parties (e.g. funders, purchasers, renters) and, if so, how is this achieved?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Armenian law does not provide a construction-specific statutory regime governing third-party rights; such rights arise primarily through contractual arrangements in construction projects, based on the CC of the RA.<\/p>\n<p>In construction practice, third-party rights are commonly granted to funders, purchasers and tenants through project-related contractual structures.<\/p>\n<p>Funders are typically granted rights through assignment of receivables, pledges over project assets and contractual step-in rights, enabling them to intervene in the project or replace the employer in case of default.<\/p>\n<p>Purchasers and tenants are usually granted rights through construction-related agreements, including contracts in favor of third parties and, where applicable, collateral warranties, allowing them to bring claims in respect of construction defects or performance issues.<\/p>\n<p>In addition, direct agreements between the employer, contractor and funders are commonly used in larger projects to ensure the protection of financing interests and continuity of the work.<\/p>\n<p>Accordingly, in the construction sector, third-party rights are typically structured through a combination of contractual mechanisms, security arrangements and project-specific agreements rather than through statutory provisions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do contracts typically contain strict provisions governing notification of claims for additional time and money which act as conditions precedent to bringing claims? Does your jurisdiction recognise such notices as conditions precedent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the CC, the contractor is required to notify the employer in a timely manner if additional work is necessary and lead to a significant increase in the contract price. In such cases, the contractor must also obtain the employer\u2019s prior consent for the performance of additional works.<\/p>\n<p>If the contractor fails to provide such notice, they remain obliged to fulfil the contract but are entitled only to remuneration based on the original contract price. In addition, the contractor must promptly notify the employer of any circumstances that may prevent timely completion of the work.<\/p>\n<p>Armenian law does not prescribe specific time limits for such notifications, preferring instead to \u201ctimely\u201d or \u201cprompt\u201d notice. However, in practice, construction contracts typically include detailed notification procedures and fixed deadlines, which may operate as conditions precedent to claims for additional time or payment.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What insurances are the parties required to hold? And how long for?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Armenian law does not impose a mandatory insurance regime for construction projects. However, under the CC, construction contracts may require a party to ensure specific risks related to the project.<\/p>\n<p>In particular, the contract may provide insurance covering the construction object, materials, equipment and other property used in the construction process, as well as liability for damage caused to third parties during the performance of the works.<\/p>\n<p>The party responsible for obtaining insurance must provide evidence of the insurance coverage, including details of the insurer, the insured amount and the insurance risks.<\/p>\n<p>At the same time, the existence of insurance does not release the insured party from the obligation to take necessary measures to prevent the occurrence of an insured event.<\/p>\n<p>As regards duration, insurance is typically maintained throughout the construction period and, depending on the contract, liability insurance may extend beyond completion.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are construction and engineering disputes typically resolved in your jurisdiction (e.g. arbitration, litigation, adjudication)? What alternatives are available?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Armenia, construction and engineering disputes are typically resolved in accordance with dispute resolution mechanisms set out in the contract. As a rule, construction contracts provide for an initial stage of negotiations between the parties as a prerequisite to further dispute resolution.<\/p>\n<p>In practice, disputes may also refer to mediation, although this mechanism is not yet widely used in the construction sector.<\/p>\n<p>If the dispute is not resolved through negotiations or mediation, it may be submitted to the competent courts of the RA. Litigation remains the most common formal dispute resolution method.<\/p>\n<p>At the same time, parties may agree to resolve disputes through arbitration, including institutional or ad hoc arbitration, which offers greater procedural flexibility and is often considered a more efficient alternative to court proceedings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How supportive are the local courts of arbitration (domestic and international)? How long does it typically take to enforce an award?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Although an arbitration award has binding effect, it may be submitted to the court for enforcement within one year of its issuance. The application for enforcement is handled under a special summary procedure, which is completed within 15 days without the need to convene a court hearing.<\/p>\n<p>As for the duration of arbitration proceedings, cases are generally decided within one month from the filing of the case with the arbitral tribunal, in accordance with the tribunal\u2019s rules, unless a longer period is provided by law or agreed upon by the parties.<\/p>\n<p>An application to recognize and enforce a foreign arbitral award is decided within 2 months, without hearing, unless international treaties provide otherwise.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any limitation periods for commencing disputes in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the case of construction disputes, the general statute of limitations applies-three years beginning from the time the person became aware, or could have become aware, of the infringement of their rights.<\/p>\n<p><strong>Limitation periods for claims regarding defective work<\/strong><\/p>\n<p>The limitation period for claims relating to defective work performed under a construction (contract for work) agreement is one year, and for buildings and structures -three years.<\/p>\n<p>If the work is accepted in parts, the limitation period begins from the date of full acceptance of the work as a whole.<\/p>\n<p>If a warranty period is established by law, other legal acts, or the contract, and a claim is made within that period, the limitation period begins from the date the defects are reported.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How common are multi-party disputes? How is liability apportioned between multiple defendants? Does your jurisdiction recognise net contribution clauses (which limit the liability of a defaulting party to a \u201cfair and reasonable\u201d proportion of the innocent party\u2019s losses), and are these commonly used?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Multi-party disputes are recognized under Armenian law and are relatively common in construction projects due to the involvement of multiple participants. Armenian civil law provides that where several persons are responsible for the same obligation, they may be held jointly and severally liable, meaning that the claimant may seek full recovery from any one of them.<\/p>\n<p>At the same time, although liability towards the claimant is joint, the parties may allocate responsibility between themselves. A party that has fulfilled the obligation in full has the right to recover from the other responsible parties their respective share, which, unless otherwise agreed, is typically divided on an equal basis.<\/p>\n<p>In cases involving damage caused by multiple parties, Armenian law likewise provides for joint and several liability, allowing the injured party to claim the full amount of damages from any of the responsible persons.<\/p>\n<p>Armenian law does not specifically regulate net contribution clauses. However, based on the principle of freedom of contract, parties are generally allowed to agree on the allocation and limitation of liability between themselves, including limiting liability to a fair and reasonable proportion of the loss. Such arrangements are used in practice, particularly in complex construction projects involving multiple contractors and consultants, if they do not contradict mandatory legal rules.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the biggest challenges and opportunities facing the construction sector in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The construction sector in Armenia is a key driver of economic growth, contributing over 20% of GDP when related sectors are included.<\/p>\n<p>However, the industry faces several significant challenges. First, rising construction costs-driven by increasing material prices and higher local fees-put pressure on project viability and real estate affordability.<\/p>\n<p>Second, administrative and regulatory barriers, including delayed permit approvals and constantly changing regulations, create uncertainty and lead to project delays. Third, the sector suffers from limited capacity, as construction companies often lack the resources and capabilities to meet government benchmarks, resulting in delays and quality issues in project delivery.<\/p>\n<p>At the same time, these challenges create opportunities. The strong demand for construction and the government\u2019s capital expenditure programs highlight significant investment potential, particularly in expanding company capacity, adopting modern technologies, and improving efficiency. Ongoing reforms in procurement legislation and state support programs for equipment modernization further incentivize growth and development in the sector.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What types of project are currently attracting the most investment in your jurisdiction (e.g. infrastructure, power, commercial property, offshore)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Currently, the most frequently undertaking construction projects are residential buildings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do you envisage technology affecting the construction and engineering industry in your jurisdiction over the next five years?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Construction companies in Armenia are gradually adopting digital technologies such as Building Information Modeling (BIM) and artificial intelligence, which contribute to more precise project planning, management, and increased efficiency.<\/p>\n<p>However, large-scale implementation is still limited, as many Armenian companies have not fully transitioned to developed digital systems, making it difficult to fully realize the benefits of digitalization in the sector.<\/p>\n<p>These technologies can bring economic and project efficiency, especially if they are more widely adopted.<\/p>\n<p>At the same time, the sector continues to focus on the environment and the development of sustainable construction materials, while modular construction is considered an affordable and cost-effective solution for expanding residential construction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What do you anticipate to be the impact from ongoing supply chain issues and the escalation of material costs over the coming year?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Armenia, the construction sector has been growing strongly in recent years, with output increasing by over 20% in 2025, supported by domestic financing and active residential and transport infrastructure projects. However, this growth occurs amid supply and material cost pressures, which often lead to project delays and higher expenses.<\/p>\n<p>The construction materials market is expanding through imports, but challenges remain, including supply chain bottlenecks, logistical delays, and price fluctuations, especially for cement, steel, and aggregates. The regulatory environment is also a key factor, with raising utility fees, delayed permits, and constantly changing rules creating additional complexity.<\/p>\n<p>As a result, if current conditions persist, construction companies may face higher costs and schedule pressures over the next year. Mitigating these impacts will require improving logistics planning, developing local production, and streamlining administrative processes.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">4966<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/139116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=139116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}