Egypt: Liability Of The Main Contractor And Subcontractor

In the case of subcontracting, both the main contractor and the subcontractor have similar obligations to the project and the employer. However, these obligations are not identical, as the subcontractor does not have a direct relationship with the employer as the main contractor. The subcontractor's relationship with the main contractor is subject to the terms and conditions of their agreement. This justifies the liability of the main contractor for error or default of the subcontractor. Nevertheless, both the main contractor and the subcontractor may also commit a default during carrying out construction work. In this regard, the nature of their obligation, which is sometimes expressed in their "contractual" and "tort" liability, shall also be examined.

I. Contractual liability of the main contractor and subcontractor:

The contractor is the executive body of the construction project or any other project. Therefore, it shall make all technical capabilities to make the architect's designs in force. It shall adhere to a range of technical and legal controls and inputs that govern construction contracts. The reasons for the liability of the main contractor and the subcontractor for the breach of their contractual obligations stipulated in the contract may be limited in cases of delay in performance, defective implementation, or failure of safety elements within workshops, including the tort liability that may be included in the subcontractor obligations.

1. Delay in implementation:

The contractor shall complete the work within the period agreed-upon in the contract, even if the contractor could prove that the specified period was not sufficient to complete the work. It may have committed an error by accepting the obligation to complete the work within such period as long as it is not sufficient. If there is no agreement on a period for the completion of the work, the work shall be completed within a reasonable period.

Such period shall consider the nature of the work, the extent of the accuracy, the contractor's capabilities which are known to the employer, the standards of workmanship, and completion of the work within the agreed period or a reasonable period. These obligations shall be fulfilled in full with due diligence. To prove that it exerted the care of an ordinary person in completing the work on time if it was unable to do so, it is not sufficient for the contractor to be released from liability for carrying out the work or for delaying completion and delivery unless it could prove that the delay is due to a foreign reason, such as force majeure, sudden event or fault of the employer, as if the employer delayed in delivering to the contractor the materials for the work, made amendments to the specifications stipulated in the contract, or failed to make the agreed-upon payments on time. The employer may not be entitled to compensation for the delay in the implementation or delivery of the work unless it is proved that damage was caused to it as a result of such delay under the standards. The employer shall be relieved of the burden of proving such damage, as it is stipulated in the contract that specific compensation shall be paid in the event of a delay. But, in this case, the contractor is entitled to prove that despite that it was late in completing the work, the employer has not sustained damage as a result of this delay, or that the agreed compensation is significantly exaggerated, in which case the employer may not be entitled to compensation or that the agreed compensation shall be reduced.

2. Defective performance:

The implementation of the contract requires that it shall be carried out in proper conditions and with satisfactory results. This is one of the most important obligations of the contractor, as its work shall conform to the specifications as set in the contract and be free from defects during implementation.

Article 650 of the Egyptian Civil Code stipulates that:

"(2) If during the performance of the work it is established that the contractor is performing the work in a faulty manner or contrary to the contract, the employer may call on him to rectify the manner of performance within a reasonable period he fixes for him. If the period expires and the contractor fails to adopt the proper manner of work, the employer may either request the rescission of the contract or hand over the work to another contractor for its completion at the first contractor's expense under the provisions of Art. 209.

(2) The employer may request immediate rescission of the contract without granting a period (for rectification) if rectification of the faulty manner of performance is impossible."

We also note that the law made the contractor a guarantor of the due qualities of the materials it uses, whether supplied by the contractor or the employer with a slight difference including the basis of this guarantee. While, in the first case, the contractor is responsible for the materials under the warranty of patent defects, however, in the second case, its liability is proven based on its failure to examine building materials before using them per the requirements of the general theory of contractual liability. The contractor shall be liable for all damage caused by such defects unless they could be hidden for a person like it. This is expressed in Article 648 of the Civil Law, which stipulates that:

This includes the possibility of holding the contractor also accountable for the defective implementation resulting from errors regarding the damage or replacement of building materials by its subcontractors. In this case, the main contractor shall be held accountable under the contractual liability. The contractor shall deliver the building materials, whether supplied by the employer or by the contractor to the subcontractor. It may not replace, dispose of or destroy any of such materials. It also may be subject to criminal liability, as well as civil liability to the employer. This means that is shall supply materials of the same type and quality with indemnification for damage if this results in a delay in the implementation of works.

2. Liability of the main contractor and subcontractor due to an error in the implementation of the design:

The contractor shall not be held accountable to the employer for demolition or defect in their construction works or fixed structure if it has been executed accurately and honestly, in accordance with the designs and measurements set by the architect. However, the contractor shall be accountable if such designs and measurements are defective and contrary to the technical rules, that a professional contractor cannot be ignorant of. Design defects are often due to several reasons, including defects constituting a breach of the standards of architecture, such as the design of foundations that are insufficient to carry the building or fixed structure, or the error in measuring the different dimensions, so that they are not appropriate for with each other. If it is found that the defect has arisen from the default of both the engineer and the contractor, the liability is divided among them in proportion to the contribution of their error to causing the damage, taking into consideration the degree of its severity, whether each of them has committed an independent mistake, or the two have parties participated in the same error.

It should be noted that the subcontractor is not liable in the "ten-year warranty" stipulated in the Law, but rather the liability in this regard lies in the main contractor with the architect since the main contractor has the right to control its subcontractors. The liability of the subcontractor about that warranty is limited by the agreement between the subcontractor and the main contractor.

3. Breach by the main contractor and subcontractor of technical standards and workmanship:

The contractor shall adhere to the architectural technical standards and workmanship, as long as no error or deficiency is detected, or a violation of such standards or provision of laws and regulations, is within its capabilities and skill. If any of this is found, it shall refer to the architect, to agree together to take the right direction about the matter. However, the goal of direction is to pursue the public interest, and not just malice and obstruction. Not only that but in the execution procedure, it shall also take into account all the provisions of the technical standards and workmanship, the laws governing this type of activity and the instructions of the competent administrative authorities in this regard.

4. Tort liability of contractors for failure to achieve safety at workshops:

In addition to the obligations of a contractual nature as mentioned above, the contractor shall bear some other professional duties requiring "tort" liability before the employer or third parties. The contractor, as the head of the workshops, shall be vigilant and cautious in providing the element of safety required to complete the work in the best conditions. It shall take all necessary preventive measures to ensure that the lives and health of its workers and assistants are safe while performing the work under its guidance or for its account. This type of liability is considered originally a form of traditional tort liability. However, this does not affect the possibility of including it in the cases of contractual liability as well, in the operation of the condition of ensuring the safety of the project owner, who instructs the contractor to achieve safety at its workshops until the construction works are received by the project owner.

We point out that a contractor, whether a main contractor or a subcontractor, shall be tort responsible toward third parties concerning the responsibility based on building guarding or that related to guarding equipment and machinery. The first is governed by Article 177 (1) of the Law, which states that:

Performing construction works by the contractor makes it under its control and guard. The contractor shall take the necessary measures to prevent anything threatens third parties. Such liability, as mentioned above, lies in who assumes actual control over the construction. The second liability is regulated by Article 178 of the same Law, which states that: -

The scope of such liability is that these machinery and equipment are under the control of the contractor, at the time of the damage to third parties, noting that this liability is a supposed liability that cannot be proven otherwise. Also, such liability does not cease after the completion of the works and receipt of the works by the employer, under the established principle that the liability in custody changes and is not multiple.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.