Contract with aconstruction contractor

What a good contract with a contractor must include

An investor signs a contract for the construction of a single-family house. Two pages of A4, a vague description of “construction of the house in accordance with the design,” a deadline of “around 10 months,” payment “in installments to be agreed.” It looks reasonable, because both sides trust each other at the start of the cooperation. Four months later the contractor informs them that reinforcing steel has gone up 30% in price, so either the investor pays the difference or the construction stops. The contract is silent on the matter — there is no price-indexation clause, so it is unclear who bears the risk. The investor pays, because there is no choice: a house left at the open shell stage cannot stand unfinished indefinitely, and changing contractors halfway through the project means more months and more cost.

This is not the exception. It is the standard scenario in Polish single-family home construction, because most contracts that land on an investor's desk are written to protect the contractor, not the investor. The contractor is not solely to blame — the blame lies with the lack of precision that both sides treat as an unnecessary formality until a dispute arises. And disputes arise regularly in construction: delays, scope changes, defective work, rising material prices. The contract is the only document that settles who pays in such a situation, and how much.

The problem is that at the moment of signing, both parties are on good terms and neither wants to “spoil the atmosphere” by negotiating the wording line by line. That is a mistake. A good construction works contract is not a sign of distrust — it is the only tool that protects both sides once trust is put to the test by the reality of the construction site.

A contract with a construction contractor that genuinely protects the investor must answer the question “what happens if something goes wrong” for every possible scenario. Below are the elements without which no construction works contract should be signed.

Scope of works, item by item

The clause “construction of the house in accordance with the building design and good building practice” means nothing in practice, because the building design does not specify the finishing standard, the material manufacturers, or the scope of installations. The contract must include an attachment — ideally in the form of an investor's cost estimate or a technical specification — listing every stage and every element: which insulation system, which joinery, which installation manufacturer, which scope of finishing works. Without this, the contractor has full freedom to interpret “compliance with the design” in their own favor.

Schedule with milestones

A final construction deadline is not enough. The contract must set specific dates for each stage: foundation level, open shell, closed shell, installations, finishing. Milestones let you catch a delay early, before it grows to a size that can no longer be made up, and they give grounds for charging contractual penalties before the whole project is put in question.

Contractual penalties for delays

Contractual penalties for house construction are one of the few real leverage mechanisms an investor has over a contractor. Without them, the only sanction for a delay is going to court for damages — months of proceedings and the need to prove the loss. A good contract sets a specific percentage rate for each day of delay against each milestone, with a clearly defined maximum cap (so the penalty does not become legally void in a dispute over it being grossly excessive).

Payment terms tied to stages

Payment installments must be tied to actual progress of works, confirmed by a partial acceptance report — not to the calendar. Payment “for the second month of construction” means the investor pays regardless of whether the works actually progressed. Payment “after acceptance of the closed shell stage” means the money follows completed work, not the passage of time.

Warranty and statutory liability for defects

A warranty for house construction and the statutory liability for defects (rękojmia under the Polish Civil Code) are two different mechanisms, and the contract must address them separately. The statutory liability for defects arises from the Polish Civil Code and applies regardless of what the contract says, but the warranty — its duration, scope, the procedure for reporting defects, and the contractor's response time — must be spelled out explicitly. Without this, two years after acceptance the investor is left alone with a crack in the facade and a contractor claiming “that's no longer my problem.”

Clauses on rising material prices

This is the point most often missing from contracts drafted in a hurry — and the one that hits the investor's wallet hardest, because construction material prices can move by double-digit percentages within a few months. The contract must specify whether the price is fixed (with the contractor bearing the risk of an increase) or subject to indexation (and on what terms — e.g., based on a Polish statistical office (GUS) index, only for selected materials, with a defined percentage cap). Without this clause, the dispute over who pays the difference is settled by whoever has the stronger negotiating position at the time — and that is usually not the investor halfway through construction.

Procedure for changes and annexes

Changes always come up during construction — the investor wants to move a wall, add an outlet, change the layout of the installations. The contract must specify how such a change is reported, priced, and approved before it is carried out. Without this procedure, changes get settled verbally on site, and the final reckoning happens at the end, when there is no room left to negotiate — because the wall is already standing in its new place.

Construction insurance

The contract should specify who insures the construction site against random events (fire, flood, theft of materials) and whether the contractor holds civil liability insurance for its business activity. Without this clause, in the event of damage on site, the investor and the contractor start arguing over whose responsibility it is, instead of dealing with the damage.

Acceptance procedure

The contract must specify how the final and partial acceptances work: who carries them out, the procedure for reporting defects, how much time the contractor has to remove them, and what happens if the defects are not removed on time. Without this procedure, acceptance comes down to signing a report under time pressure, without any real verification of the quality of the work.

Contract element and the consequences of missing it

The most common legal traps in Polish construction contracts

A contract for a specific work (“umowa o dzieło”) instead of a construction works contract. These are two different legal regimes under the Polish Civil Code, with different liability rules and different limitation periods for claims. Some contractors deliberately draft the contract as an “umowa o dzieło” to limit their liability — the investor rarely notices, because the difference sounds like a mere formality.

Overly broad definitions of “force majeure.” Contractors sometimes insert a broad definition of force majeure that includes, for example, “difficulty obtaining materials” — which in practice releases them from liability for delays whenever there is any market shortage, even if it could have been avoided by ordering earlier.

No clarity on ownership of as-built documentation. The investor should be guaranteed the right to the full technical and as-built documentation of the construction — without it, warranty claims are difficult, selling the property is difficult, and any future extension is difficult.

Contractual penalties that only run one way. Some contracts provide for penalties against the investor for late payments, but no penalties against the contractor for delays in the works. This looks symmetrical at first glance, but in practice it protects only one side.

Looking for a ready-made construction works contract template online and filling it in yourself is a risky approach — every construction project has its own specifics, and a generic template will not account for the specific scope of works, the specific schedule, or the specific price risk of a given project. A template can be treated as a starting point, never as a finished document ready to sign.

What a contract looks like at Sigvin

At Sigvin, the contract is not a formality to be signed once the price is settled — it is a document drawn up in parallel with the design and the cost estimate, before the investor decides to work with us. Every line item in the cost estimate is reflected in the contract's attachment, so at the moment of signing both parties know exactly what the investor is paying for and what the contractor is delivering — there is no room for “details to be worked out along the way.”

We settle the question of rising material prices explicitly before the contract is signed — we state which line items in the cost estimate have a fixed price and which are subject to indexation, and on what terms, so the investor doesn't find out about it halfway through construction from the site manager. The same applies to contractual penalties — they run both ways: the contractor is liable for delays in execution, the investor for delays in payment, on the same terms.

We describe the warranty and the acceptance procedure in detail, including the response times for reported defects, because we know that these are exactly the provisions that determine what the relationship with the contractor looks like after construction ends — not during it, when both sides are still motivated to cooperate.

Don't sign the contract until you've checked these nine points

If you'd like us to review your contract before you sign it, or to talk about what the process of building a turnkey single-family house at Sigvin looks like — book a free consultation. We'll check whether the document in front of you actually protects your money, or just looks like it does.