Granting Construction Guarantee – To Whom And When Does The Obligation Apply?

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).