Contracts / Civil Law
The Building Contractor Agreement under Jordanian Law
This summary outlines the legal framework for building contractor agreements under the Jordanian Civil Code, emphasizing the contract’s definition, core characteristics and reciprocal obligations of employer and contractor. It also summarizes rules on subcontracting, contractor and engineer liability, termination grounds and practical protections for the parties.
Updated: 21 December 2022
Prepared and reviewed by: Ashraf Al-Khawaja
Definition and Characteristics of the Contracting Agreement
Article 780 of the Jordanian Civil Code defines a contracting agreement as one party undertaking to make or perform something in return for remuneration by the other party. The contract is consensual and reciprocal, requires a clear description of the subject and consideration, and presumes the contractor acts independently of the employer (distinct from an employment relationship). Practically, parties should specify the works, quantities, performance method, timeline and remuneration in the contract to avoid uncertainty, consistent with Article 782’s requirement to describe the subject-matter, manner of performance and price.
Forms of Contracting and the Subcontracting Relationship
Contracting typically occurs directly between employer and contractor, by subcontracting parts of the work to secondary contractors, or in investment arrangements where a financial institution commissions a specialist builder. The law allows subcontracting unless expressly prohibited by contract or where the nature of the work requires personal performance; the principal contractor remains liable to the employer under Article 798. In practice, contracts should expressly address subcontracting permissions, allocation of responsibility, and the subcontractor’s ability to claim from the employer (Article 799) to prevent disputes and unclear direct claims.
Contractor Obligations, Employer Rights and Warranties
The contractor bears statutory duties: supply materials when contracted and meet agreed standards (Article 783), provide necessary tools and machinery unless otherwise agreed (Article 784), and complete the work according to contractual terms. If defects appear, the employer may require correction within a reasonable time, seek cancellation, or have the work completed by another at the contractor’s expense (Article 785). The contractor is liable for loss or damage caused by act or default unless due to an unavoidable accident (Article 786). Where an engineer designs and supervises construction, the engineer and contractor are jointly liable for structural defects and collapse for ten years from delivery (Article 788); an engineer who only designs is liable only for design defects (Article 789), and any clause seeking to limit or exclude such warranties is void (Article 790). Practically, contracts should set clear technical specifications, staged acceptance, and warranty terms to delineate remedies.
Contract Termination, Remedies and Practical Procedures
A contracting agreement ends upon completion of the agreed work, by mutual consent, judicial rescission or because of an impediment preventing performance (Articles 800–801). If the contractor becomes incapable of finishing for reasons beyond his control, he is entitled to payment for the work completed and expenses proportionate to the employer’s benefit (Article 802). The contract may terminate on the contractor’s death if performance depended on his person or heirs fail to provide adequate guarantees; heirs remain entitled to remuneration for completed works (Article 804). Payment timing, acceptance and valuation rules are governed by Articles 792–796 where applicable. In practice, parties should record cure notices, acceptance certificates, measurement records, and termination and claims procedures to preserve rights before courts or in alternative dispute resolution.
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