Croatia
Answer ... Yes, a choice of foreign law or jurisdiction is generally valid and enforceable in Croatia, subject to certain conditions. Under Croatian law, the parties to a contract are free to choose the governing law and jurisdiction that will apply to their agreement. This choice is typically reflected in the contract and, once agreed upon by the parties, is generally binding.
However, there are certain mandatory provisions of Croatian law that cannot be waived or modified by agreement of the parties. For example, certain provisions of the Civil Obligations Act are mandatory and cannot be overridden by a choice of foreign law or jurisdiction. These mandatory provisions may include provisions related to consumer protection, competition law and other public policy considerations.
In addition, parties should be aware that even if they choose a foreign law or jurisdiction, local courts in Croatia may still have jurisdiction over certain aspects of the dispute or transaction. For example, the Croatian courts may have jurisdiction to enforce judgments or to decide matters related to property located in Croatia.
Overall, while a choice of foreign law or jurisdiction is generally valid and enforceable in Croatia, parties should carefully consider the implications of their choice and seek legal advice to ensure that any mandatory provisions of local law are properly accounted for.
Croatia
Answer ... In Croatia, construction contracts are subject to a number of formal, substantive and procedural requirements.
-
Formal requirements:
-
- Written form: Construction contracts must be in writing to be valid and enforceable.
- Signature: Construction contracts must be signed by both parties or their authorised representatives.
- Registration: Public procurement contracts must be registered with the Croatian Public Procurement Agency.
-
Substantive requirements:
-
- Performance: Construction contracts must specify the work to be performed, including the scope, quality and standards required.
- Price: Construction contracts must specify the price to be paid, as well as the payment terms and conditions.
- Time: Construction contracts must specify the time for completion of the work, including any milestones or deadlines.
- Warranty: Construction contracts must specify the warranty period, which is typically two years.
-
Procedural requirements:
-
- Notice: The parties must give notice to each other of any claims, disputes or changes to the contract.
- Payment: The parties must comply with payment obligations, including payment for work performed and payment for any changes or variations to the work.
- Termination: Construction contracts may be terminated by the parties in certain circumstances, such as for breach or frustration.
Mandatory terms: Under Croatian law, certain terms are mandatory and cannot be waived or modified by agreement of the parties. For example, the Croatian Civil Obligations Act prescribes mandatory provisions related to the performance of the work, warranties and liability for defects.
Typically included terms: Construction contracts in Croatia typically include terms related to:
- the scope of work;
- payment;
- time for completion;
- variations;
- warranties;
- termination; and
- dispute resolution.
Prohibited terms: There are no specific terms that are prohibited under Croatian law, but parties should ensure that any terms included in the contract are consistent with the requirements of the law and public policy considerations.
Croatia
Answer ... Risk allocation in construction contracts in Croatia is typically negotiated between the parties and can vary depending on the nature and complexity of the project. However, there are some common ways in which risks are allocated between the parties:
- Scope of work: The contractor is typically responsible for the work specified in the contract and bears the risk of any defects or failures in the work.
- Time for completion: The contractor is typically responsible for completing the work within the agreed timeframe and bears the risk of any delays or extensions.
- Price: The owner is typically responsible for paying the contract price; while the contractor is responsible for any additional costs or variations to the work.
- Site conditions: The owner is typically responsible for providing a suitable site for the work; while the contractor is responsible for dealing with any unexpected site conditions or changes to the site.
To mitigate these risks, the parties can take a number of steps:
- Contractual protections: The parties can include provisions in the contract that allocate risks and provide remedies for breaches or failures.
- Insurance: The parties can obtain insurance coverage to protect against certain risks, such as construction defects, property damage or liability.
- Quality control: The parties can implement quality control measures to ensure that the work is completed to the required standard and to minimise the risk of defects or failures.
- Communication and cooperation: The parties can work together to identify and manage risks, and to address any issues that arise during the course of the project.
It is important for the parties to carefully consider and allocate risks in the contract, as well as to take appropriate steps to mitigate these risks. This can help to ensure that the project is completed on time, within budget and to the required standard.
Croatia
Answer ... In Croatia, parties are generally free to agree on the extent of their liability under a contract, including the ability to cap liability or exclude liability altogether. However, the Civil Obligations Act sets out some general principles that apply to limitation of liability clauses.
Under the Civil Obligations Act, parties cannot exclude liability for:
- intentional or grossly negligent behaviour; or
- damages resulting from a breach of contract that is essential to the purpose of the contract (ie, a breach of a fundamental term).
In addition, clauses that attempt to limit or exclude liability for death or personal injury are generally not enforceable.
Parties can generally cap their liability under a contract, but there are some limitations on this ability. For example, a cap on liability may be considered unreasonable or unfair if it is disproportionately low compared to the potential damages that could result from a breach of contract. Courts may also refuse to enforce a limitation of liability clause if it is deemed to be contrary to public policy.
In practice, construction contracts in Croatia often include clauses that cap the contractor’s liability for certain types of damages or losses, such as consequential or indirect damages. The specific terms of these clauses will depend on:
- the nature and complexity of the project; and
- the bargaining power of the parties.
It is important for parties to carefully consider the terms of any limitation of liability clauses and ensure that these clauses comply with the requirements of the law and public policy considerations. Parties may wish to seek legal advice to ensure that the terms of the contract adequately protect their interests while remaining legally enforceable.
Croatia
Answer ... In Croatia, the consequences of a delay to a construction project will depend on the terms of the contract between the parties. Construction contracts typically include provisions that address the consequences of delays, including:
- the allocation of risk and responsibility for delays;
- the entitlement to extensions of time; and
- the payment of damages or liquidated damages for delay.
If the contractor is responsible for the delay, the owner may be entitled to claim damages or liquidated damages for any losses suffered as a result of the delay. The amount of damages will depend on the specific terms of the contract, but may include compensation for:
- increased costs;
- lost revenue; or
- additional financing costs.
Alternatively, the contract may provide for liquidated damages, which are a pre-agreed amount that the contractor must pay for each day that the project is delayed beyond the agreed completion date.
If the owner is responsible for the delay, the contractor may be entitled to claim an extension of time to complete the project. The contract may specify:
- the circumstances under which the contractor is entitled to an extension of time; and
- the procedures for making such a claim.
In some cases, the contract may provide for both liquidated damages and extensions of time, allowing the parties to balance the risks and consequences of delay.
In addition to the financial consequences of delay, there may be other impacts on the project, such as:
- reputational damage;
- loss of productivity; or
- increased safety risks.
It is important for parties to carefully consider the potential consequences of delay when negotiating and drafting the contract, and to take appropriate steps to mitigate the risk of delay and to manage any delays that do occur.
Croatia
Answer ... Yes, the concept of force majeure is recognised in Croatia. The Civil Obligations Act provides that a party is not liable for non-performance of its obligations if the non-performance is due to a force majeure event that was unforeseeable and could not have been prevented by reasonable measures.
Force majeure events typically include events that are beyond the control of the parties, such as:
- natural disasters;
- war;
- terrorism; and
- government actions.
The specific events that qualify as force majeure will depend on the terms of the contract and the circumstances of the case.
If a force majeure event occurs, the parties will typically be excused from performing their obligations for the duration of the event. The contract may also provide for additional rights and obligations in the event of a force majeure event, such as:
- the right to terminate the contract;
- the obligation to give notice of the force majeure event; or
- the obligation to mitigate the effects of the event.
In practice, force majeure clauses are commonly included in construction contracts in Croatia. These clauses will typically define:
- the events that qualify as force majeure; and
- the consequences of a force majeure event, including any extensions of time or other relief that may be available to the parties.
It is important for parties to carefully consider the potential for force majeure events when negotiating and drafting the contract, and to ensure that the force majeure clause is sufficiently clear and comprehensive to provide for the parties’ needs and expectations. Parties may also wish to seek legal advice to ensure that the force majeure clause complies with the requirements of the law and is enforceable in the event of a dispute.
Croatia
Answer ... The scope for making material variations to the works will depend on the terms of the construction contract between the parties. In Croatia, the Civil Obligations Act provides that a contract can be amended by mutual agreement of the parties; and the parties to a construction contract may agree to vary the scope of the works, the contract price or other key terms.
However, the contract will typically provide for specific procedures for making changes to the scope of work, including:
- the approval process for changes;
- the timing and documentation requirements; and
- any pricing adjustments that may be required.
In many cases, the contract may provide for a formal change order process, which requires the parties to agree on any changes in writing before they can be implemented. The change order will typically specify the details of the change, including:
- the new scope of work;
- any changes to the contract price or schedule; and
- any other relevant details.
It is important for parties to carefully consider the potential for changes to the scope of work when negotiating and drafting the contract, and to ensure that the contract includes clear and comprehensive provisions for making changes, including any approvals or notifications that may be required. Parties may also wish to seek legal advice to ensure that any changes to the contract comply with the requirements of the law and are enforceable in the event of a dispute.
Croatia
Answer ... In Croatia, the requirements for completion and taking over will depend on the terms of the construction contract between the parties. However, there are some general legal requirements that apply to all construction contracts.
Under the Civil Obligations Act:
- a construction contract must be completed in accordance with the agreed terms; and
- the contractor must deliver the completed works to the owner in a condition that is fit for their intended purpose.
The owner must then take over the completed works and pay the contractor the agreed price.
The contract will typically provide for specific procedures for completion and taking over, including:
- the timing of completion;
- any inspections or tests that may be required; and
- the documentation required for acceptance of the works.
Once the works are completed, the parties will typically conduct a final inspection to ensure that the works have been completed in accordance with the contract and are fit for their intended purpose. If any defects or deficiencies are identified during the inspection, the contractor will be required to remedy these before the works can be accepted.
Once the works have been accepted by the owner, the contract price will become due and payable. The contract may also provide for retention of a portion of the contract price as security against any defects or deficiencies that may arise during the defect liability period.
It is important for parties to carefully consider the requirements for completion and taking over when negotiating and drafting the contract, and to ensure that the contract includes clear and comprehensive provisions for these processes, including any inspections, tests or documentation that may be required. Parties may also wish to seek legal advice to ensure that the completion and taking-over processes comply with the requirements of the law and are enforceable in the event of a dispute.
Croatia
Answer ... In Croatia, the requirements and restrictions that apply to the termination of a construction contract will depend on the terms of the contract between the parties. However, the Croatian Civil Obligations Act provides some general principles that apply to all contracts, including construction contracts.
Under the Civil Obligations Act, a construction contract can be terminated by:
- mutual agreement of the parties;
- operation of law; or
- court order.
The contract may also provide for specific termination provisions, including:
- the circumstances under which the contract can be terminated;
- the notice periods required; and
- the consequences of termination.
In addition, the Civil Obligations Act provides that a contract can be terminated for breach of contract by one of the parties. If one party breaches a material term of the contract, the other party may have the right to terminate the contract and seek damages or other remedies for the breach. However, termination for breach will generally require a prior notice and opportunity to cure the breach.
It is important for parties to carefully consider the requirements and restrictions that may apply to termination when negotiating and drafting the contract, and to ensure that the contract includes clear and comprehensive provisions for termination, including any notice periods, cure periods or other requirements. Parties may also wish to seek legal advice to ensure that the termination provisions comply with the requirements of the law and are enforceable in the event of a dispute.
Croatia
Answer ... In Croatia, delay or liquidated damages provisions in construction contracts are generally enforceable, subject to certain limitations.
The parties to a construction contract can agree to include provisions for liquidated damages in the event of delay or non-performance by one of the parties. These provisions will typically provide for a specified amount of damages to be paid by the defaulting party for each day or week of delay beyond the agreed completion date.
Under Croatian law, liquidated damages provisions must be reasonable and proportionate to the actual losses suffered by the non-breaching party as a result of the delay. If the amount of liquidated damages is excessive or not reasonably related to the actual losses, it may be deemed a penalty and may be unenforceable.
In addition to liquidated damages, the parties may agree to include provisions for extension of time in the event of delay, giving the contractor additional time to complete the works without penalty. These provisions will typically specify the circumstances in which an extension of time can be granted, such as in the event of unforeseen circumstances or delays caused by the owner or other third parties.
It is important for parties to carefully consider the provisions for delay or liquidated damages when negotiating and drafting the contract, and to ensure that the provisions are reasonable, proportionate and compliant with the requirements of the law. Parties may also wish to seek legal advice to ensure that the delay or liquidated damages provisions are enforceable in the event of a dispute.