It is not possible to ask the banker to finance the construction of a single-family house without the guarantee of delivery insurance. This banker, in such a case, would be at fault, as would be the manager of the construction company personally, explained the Court of Cassation.
A bank, which had agreed to finance a house without this guarantee, was ordered to pay the completion.
To save money, an individual had signed with a builder a project management contract and not a contract for the construction of an individual house because this contract necessarily contains the guarantee of delivery insurance, which has a cost. This is the guarantee of completion of the house at the price and time specified. This customer had also signed a waiver of liability with the bank, asserting that he knowingly waived the delivery guarantee.
Bankruptcy during construction
The bank had agreed to release the funds but the construction company having gone bankrupt during the work, his client had reneged on his commitments and had taken legal action which finally found him right.
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Regardless of this client’s conscious waiver of a legal warranty, The judges said, the project management contract was an arrangement intended to disguise a construction contract and avoid a legal obligation. It was therefore zero. The builder, like the banker, who had agreed to build and release the funds, had to assume the costs of completion, surcharges and resumption of work.
(Cass. Civ 3, 5.1.2022, G 20-19.775).
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