The Situation and Consequences of Finding Uncompleted Work in Construction

Construction contracts are bilateral contracts in which the parties mutually have a number of rights and obligations. In this agreement, the mutual parties are named as the contractor and the employer. The contractor undertakes to build and deliver a building to the owner of the work or land plot in exchange for a fee or independent decommissioning. The contractor is required to deliver the construction and delivery of the building, which is the main debt arising from the contract, completely and flawlessly in accordance with the agreed qualifications, as provided for in the contract.

Incomplete work, is work that is not performed although it is agreed to be done according to the contract and its annexes.[1] In case of incomplete construction, the event of legal delivery does not occur. For this reason, the contractor who does not fulfill the delivery debt cannot demand payment of his fee from the employer or transfer of land shares or independent parts. On the contrary, the employer may make some requests from the contractor. In this bulletin, it is focused on the situation of uncompleted work in construction and the legal consequences of this situation. In particular, the differences between the concepts of defective performance, which are often confused with incomplete work and the results of which are different from each other, were touched upon and explanations were made about which rights that the employer has in which case.

1.    What is Incomplete Work?

Incomplete work is the case when the contractor has never performed the parts that are required to be present in the construction even though they are agreed in the contract and/or its annexes or in accordance with the rules of honesty. Incomplete work is not done completely, the work has not been done incorrectly or corrupted. For example, if the windows have never been installed, the roof has been left open, and the construction has been made smaller than the area specified in the contract, there is an incompletion of work.

2.     The Difference Between the Uncompleted Work And Concept of Defect

The presence of deficiencies in the construction and the defective delivery of the construction are different concepts from each other. The results legally connected to these two are also different. At the time of the defective delivery of the construction, the construction was completed and delivered, but it does not meet the specifications agreed in the contract. If the work is incomplete, the event of legal delivery cannot occur, because the construction has not yet been completed. Delivery of construction is an event that occurs after the completion of construction. For this reason, it is not possible to legally deliver the construction that has uncompleted work.

It may not always be easy to distinguish deficiency and defect from each other. In such cases, first of all, it is necessary to look at whether the work in question has never been done, or whether it was done badly or in a different way than stipulated in the contract. If there is a performance that is present although it is not perfect, it is necessary to mention the defective performance here. Another method used to distinguish between incomplete work and defective work is to see if the elimination of a breach of contract requires intervention in other parts of the work, causing damage. If the elimination of this deficiency requires damage to other parts, then in this case there is a defective work.

In case of defective delivery of the construction, the employer may exercise one of the rights of choice arising from the law. He can also claim compensation for damage suffered by the contractor in accordance with the general provisions. In case of uncompleted work in the construction, there are also requests that the employer can direct to the contractor. Detailed explanations on this issue are given in the continuation of our article. For more detailed information about defective delivery, you can review our article entitled “Faulty (Defective) Delivery of Construction” on the Real Estate Law tab in the Blog section of our site.

3.    The Rights of the Employer in Case of Uncompleted Work in Construction

If there are incomplete works in the construction, the employer will be able to make some requests from the contractor. If there are incomplete works, the construction is considered not delivered. Legally, the delivery does not take place, and in this case, as a rule, the contractor also cannot qualify for the fee. In case of uncompleted work in construction, the employer may choose one of the following options;

  • Request completion of incomplete work from the contractor, avoiding paying the fee
  • Requesting permission from the court for the completion of the construction by themselves at the expense of the contractor
  • Exercising the rights arising from default by defaulting the contractor
  • To demand the price of uncompleted works by not accepting the delivery of the construction,

If the uncompleted works price is requested, it is accepted that the contract is still standing. “In order for the incomplete and defective work price to be requested, it is necessary to eliminate the inconsistency of manufacturing with the construction and project; otherwise, the incomplete and defective work price cannot be requested.”[2]

In the case of incomplete work, the debtor finds the ability to enforce the provisions of the default. As is known, in bilateral contracts that load mutual debt, the creditor who defaults on the debtor can use one of the following 3 rights of choice;

  • Request the same performance and ask for compensation for delay
  • Rescission of the contract and requesting compensation for reliance damages
  • Requesting compensation for positive damages by giving up the performance

As it can be seen, in case of uncompleted work in construction,  it is not the special provisions related to the work contract contained in TCO article 474-478, but that are included in the TCO Art. 112 and the following general provisions are applied. For this reason, unlike the use of rights arising from defect, the business owner does not need to notify the contractor of the uncompleted work in order to make a request due to the uncompleted work. The business owner can put forward his requests to the contractor until the period of limitation expires.

“The price of uncompleted works can be requested as a rule, within a five-year statute of limitations from the date of delivery, regardless of the notification condition and the notification period (TCO art. 147/latest).”[3]

4.    Calculation of the Cost of Uncompleted Work

The cost of uncompleted works is calculated by the expert. If the employer has received the work, the calculation is made according to the market price on the delivery date. If the work has not been delivered, it should not be caused by increasing the damage to the contractor by staying still for long periods of time. The cost of uncompleted work should be calculated according to the market price at the date when the deficiencies will be found by adding the time when they have been completed or can be completed.

For incomplete work in common places, the employer may be asked for the uncompleted work price only at the rate of the land share, and it is paid this way.

The following are the judicial decisions of a guiding nature regarding the uncompleted work cost;

In case of disputes arising from the work contract, the uncompleted works price may be requested at any time during the period of limitation without the need to file a claim at the time of delivery. Again, the defendant contractor must prove that he has completed all the manufacturing and goods provided for in the contract in full and delivered it to the landowner in a form ready for customer acceptance as agreed in the contract. In addition, the defendant contractor argued in his answer that he did not make some of the productions because they were not included in the contract and license, and that he did not deliver some of the goods because they were not provided for in the contract. In this case, the court gather all the evidence showed that the parties and, if necessary, by the discovery of expert witnesses at the scene with the skill that should be made if we are missing not made in accordance with the contract, as of the date of actual delivery of this production 08.03.2005 local market rates and the contractor whether or not it belongs to the cost paid, and the plaintiff paid the determination of tax liabilities, again, the burden of proof to the defendant in accordance with the obligations by the contract should be delivered, undelivered if they have items to be received as the price of them are identified with the same date of the report and all the evidence to conclude by assessing an appropriate decision must be made.”[4]

The contractor has asked for the price of the work he has done, and the employer has asked for the price of the uncompleted work. The contract fee is set as a lump sum. In such cases, the cost of work that the contractor deserves is determined based on the physical rate of production. In other words, if there is an uncompleted work, the production created by the contractor must be determined according to the physical ratio of the work as a whole, the receivable must be found by applying this ratio to the price agreed in the contract.”[5]

Part of uncompleted works which is made the subject of a lawsuit relates to common places. In this case, the decedent is the owner of the land plot uncompleted works if they have the right to ask for the cost of elimination, they can only make a request at the rate of their share. According to this rule by the court if the decision is made on the basis of the uncompleted work price found by the ratio of the cost of the work to the share of the land owner determined in the expert report, the subject of the lawsuit is also not all of the uncompleted works relate to common places, but some of them relate to independent parts of the plaintiff’s decency. In this case, the plaintiff owner of the land plot has the right to demand the full amount of  uncompleted works designated for its independent sections. This situation was overlooked by the court and the plaintiff was determined regarding the independent sections belonging to the owner of the land plot not all of, uncompleted works but this part of uncompleted works was not correct to make a decision by proportioning the land share for it, it was found appropriate to decry the decision made”.[6]

5.    Time Bar

The rights of receivables arising from the construction contract are subject to a 5 year period of limitations, except in the event that the contractor does not fulfill its debts at all or as required due to its gross defect. Due to uncompleted works, requests must be submitted within this 5 year period of limitations.

Conclusion

In case of incomplete work in the construction, the employer can make requests according to the general provisions. It is very important to distinguish between incomplete work and the concept of defective performance. Because these two situations are subject to different provisions of the Turkish Code of Obligations, the rights that the business owner has in both cases and the conditions for using these rights are also different from each other.

You can contact our team for more information and consulting requests related to the uncompleted work fee request in construction or the exercise of other rights.

Best regards.

References

Erhan GÜNAY, (2021), Arsa Payı Karşılığı İnşaat Yapım Sözleşmesinden Kaynaklanan Uyuşmazlıklar, Seçkin Yayıncılık, Ankara.

İlker Hasan DUMAN, (2021), İnşaat Hukuku, Seçkin Yayıncılık, Ankara.

Zeynep ÖZCAN, “İnşaat Hukukunda Yüklenicinin Ayıplı Ve Eksik İfası”, Uyuşmazlık Mahkemesi Dergisi, Yıl:6, Sayı:11, Haziran 2018.

23rd Civil Chamber of the Supreme Court, 2015/8370 E., 2018/4016 K.

15th Civil Chamber of the Supreme Court, 01.03.2006, 7865, 1103.

15thCivil Chamber of the Supreme Court, 2020/1263 E., 2021/3148 K.

15th Civil Chamber of the Supreme Court, 02.03.2009, 1681/1080.

15th Civil Chamber of the Supreme Court, 01.05.2007, 1818/2856.

15th Civil Chamber of the Supreme Court, 2020/1827 E., 2021/2372 K.

[1] 23rd Civil  Chamber of the Supreme Court, 2015/8370 E., 2018/4016 K.

[2] 15th Civil Chamber of the Supreme Court, 01.03.2006, 7865, 1103.

[3] 15thCivil Chamber of the Supreme Court, 2020/1263 E., 2021/3148 K.

[4] 15th Civil Chamber of the Supreme Court, 02.03.2009, 1681/1080.

[5] 15th Civil Chamber of the Supreme Court, 01.05.2007, 1818/2856.

[6]  15th Civil Chamber of the Supreme Court, 2020/1827 E., 2021/2372 K.

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