A construction contract is a type of service contract in which the contractor commits to constructing a specific building on a designated site in accordance with a predetermined plan within an agreed timeframe, or to carrying out other construction work on such a site or on an existing structure, while the client commits to paying a specified price for the work.²⁶⁹ The term “building” refers to structures such as buildings, dams, bridges, tunnels, water supply systems, sewage systems, roads, railways, wells, and other construction projects that require extensive and complex work.²⁷⁰ The primary contractual obligation of the contractor is either the construction of a new structure or the execution of other construction work, including modifications to an existing building. The client, in turn, is obliged to pay for the work performed.

A construction contract requires a formal written form. The contract must be concluded in writing.²⁷¹ The written form is required to protect the interests of the parties and for evidentiary purposes.²⁷²

In practice, construction contracts often include a “turnkey” clause. This contractual provision states that the contractor assumes full responsibility for the execution of the project at a fixed price, including planning, implementation, and delivery. The contractor is responsible for all costs and risks associated with the project and commits to completing it in accordance with the agreed specifications and deadlines.²⁷³ In such cases, the agreed price also includes the value of unforeseen and additional work but excludes the impact of missing work on the total price. If multiple contractors are involved in a “turnkey” contract, their liability towards the client is joint and several.²⁷⁴

Liability for defects in construction is governed by the applicable provisions of the OZ regarding service contracts, except in cases where specific legal provisions state otherwise.