The Developer’s Checklist: Mastering Construction Contracts & Works Agreements in Romania

Navigating the intricacies of construction contracts in Romania requires a comprehensive understanding of Romanian law and the specific nuances of the construction sector.

This guide serves as a checklist for developers and investors involved in construction projects in Romania, offering insights into construction contracts, works agreements, standard forms, and key considerations for successful project execution.

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At Atrium Romanian Lawyers, we assist clients with corporate & commercial law, construction contracts, works agreements, and construction dispute resolution.

Understanding Construction Contracts in Romania

Definition and Importance of Construction Contracts

A construction contract in Romania is a legally binding agreement, typically classified under Romanian law as a works agreement (contract de antrepriză), between two or more parties that outlines the scope of construction work, the obligations of each party, and the payment terms.

The object of the contract is to define the responsibilities and rights concerning a construction project, in accordance with the Romanian Civil Code.

Construction contracts in Romania are crucial for establishing project expectations, allocating risk, and providing a contractual framework for dispute resolution under Romanian law.

As a specialized subset of contract law in Romania, construction agreements must comply with mandatory civil law provisions while addressing sector-specific requirements.

Types of Construction Contracts in Romania

Several types of construction contracts are used in Romania, depending on project structure and risk allocation.

These include design and build contracts, EPC contracts, and contracts based on standard forms such as FIDIC contracts.

Understanding these distinctions is important for selecting an appropriate contractual framework for a construction project in Romania.

The chosen contract type influences procurement strategies, risk management, and project governance, including compliance with public procurement procedures where applicable.

For property and real estate development, proper contract selection is essential to protect your investment.

Standard Forms of Construction Contracts

Use of Standard Contract Templates

In Romania, standard forms of construction contracts are frequently used, particularly in complex or international construction projects.

These contracts are often based on international models and offer familiarity for foreign investors and contractors.

Standard construction contracts must be reviewed and, where necessary, amended to ensure compliance with mandatory Romanian civil law provisions and project-specific legal requirements.

Their use does not override Romanian law, particularly in public construction projects.

FIDIC Contracts in Romania

Are FIDIC contracts enforceable in Romania? Yes, provided they comply with mandatory Romanian civil law and public procurement rules where applicable.

FIDIC contracts, developed by the International Federation of Consulting Engineers, are widely used in Romania, particularly for infrastructure and publicly funded projects.

Romanian law does not formally recognize FIDIC as a legal standard, but FIDIC-based contracts are enforceable when compliant with mandatory Romanian law.

In public procurement contexts, FIDIC provisions are frequently substantially amended by statute, especially in relation to variations and claims, payment mechanisms, engineer’s role, and dispute resolution.

Key Aspects of Works Agreements in Romania

Essential Elements of a Works Agreement

A works agreement in Romania should clearly define the object of the contract, including the scope of construction work, timelines, and technical requirements.

While Romanian law does not impose a fixed list of essential clauses, clarity on payment schedules, variation procedures, liability for defects, and dispute resolution mechanisms is essential for proper contract performance.

Performance bonds or guarantees may be included where required by the parties, lenders, or public authorities, but they are not mandatory elements under Romanian civil law.

Parties Involved in Construction Agreements

Construction agreements in Romania typically involve the beneficiary (beneficiar), the contractor (antreprenor), and, where applicable, subcontractors performing specialized construction work.

In public construction projects, the beneficiary is a contracting authority, and the involvement of parties is governed by public procurement legislation, which may restrict contractual freedom and impose mandatory clauses.

Contractual Obligations and Rights

Romanian construction contracts must clearly define the contractual obligations and rights of the parties.

These include obligations relating to execution of construction work, payment of the contract price, cooperation, and compliance with technical and legal standards.

Both parties have rights under Romanian law, including the right to claim damages, penalties, suspension, or termination in case of breach, subject to the Romanian Civil Code.

Navigating Romanian Construction Law

Overview of Romanian Construction Regulations

Construction projects in Romania are subject to a regulatory framework covering zoning, building permits, safety standards, and technical compliance.

Romanian law governs these requirements, and non-compliance may lead to administrative sanctions or suspension of works.

Investors involved in construction projects in Romania must ensure compliance with applicable construction regulations to avoid delays or legal complications.

Before commencing any construction work, ensure that proper cadastral documentation and property ownership verification are in place, as these form the legal foundation for obtaining construction permits.

Public Procurement Procedures in Construction

Public procurement procedures for construction work in Romania are governed primarily by Law no. 98/2016 on public procurement and related secondary legislation, which transpose EU procurement directives into Romanian law.

These procedures impose mandatory rules regarding contract award, performance guarantees, amendments, and payment mechanisms.

Compliance with public procurement procedures is essential for contractors participating in public construction projects in Romania.

Construction Disputes in Romania

Common Sources of Disputes

Construction disputes in Romania commonly arise from contract interpretation, payment issues, variations, delays, or construction work quality.

Understanding these risk factors helps developers and contractors mitigate conflicts throughout the project lifecycle.

Dispute Resolution Mechanisms

Construction contracts often include dispute resolution clauses providing for litigation before Romanian courts or arbitration, in accordance with Romanian civil law.

Romania is a party to the New York Convention, enabling enforcement of foreign arbitral awards, subject to public policy limits.

When construction disputes arise, litigation and dispute resolution services can help protect your interests.

Can international arbitration be used in Romanian construction contracts? Yes. Romania is a party to the New York Convention, allowing recognition and enforcement of arbitral awards, subject to public policy exceptions and statutory limits in public contracts.

Effective Contract Management Strategies

Construction Contract Management Best Practices

Effective management of construction contracts in Romania requires careful drafting, monitoring of performance, and proper documentation of variations and claims.

A well-managed construction contract helps mitigate risks related to time overruns, cost increases, and disputes, protecting both parties throughout the construction project.

Risk Management in Construction Contracts

Risk management in Romanian construction contracts involves identifying and allocating risks related to design, ground conditions, regulatory changes, and force majeure events.

Romanian law allows contractual risk allocation, subject to mandatory statutory limits and public policy considerations.

Dispute Avoidance and Resolution Techniques

Clear contractual clauses, regular communication, and proactive management can reduce the risk of construction disputes in Romania.

When disputes arise, mediation or arbitration may offer efficient alternatives to litigation, depending on the contractual framework and project type.

Specialized Contract Types in Romanian Construction

EPC Contracts: Structure and Implications

EPC contracts in Romania are commonly used for large-scale and infrastructure projects.

These contracts allocate significant responsibility to the contractor for design, procurement, and execution.

However, under Romanian law, risk transfer is not absolute, and liability remains subject to statutory limitations, force majeure provisions, and agreed contractual caps.

Design and Build Contracts in Romania

Design and build contracts are widely used in Romania, particularly in private construction projects.

Under this model, a single contractor assumes responsibility for both design and construction, based on employer-defined requirements.

This contractual approach reduces coordination risks when properly structured and provides clear accountability for project delivery.

Useful Resources & Links

Related Guides & Resources

Expand your understanding of construction and property law in Romania with these complementary guides:

FAQ – Construction Contracts & Works Agreements in Romania

Conclusion: Mastering Construction Contracts in Romania

Construction contracts and works agreements in Romania require careful legal and commercial planning.

Developers and contractors must understand Romanian construction law, select appropriate contract types, manage risks, and ensure regulatory compliance.

Early involvement of legal and technical advisers is essential for minimizing construction disputes in Romania and ensuring successful project delivery.

Shareholder Agreements in Romania – The 2025 Guide for Investors and Entrepreneurs

A shareholder agreement in Romania is a private contract between company shareholders that regulates their rights, obligations, and internal governance. While not mandatory, a well-crafted shareholder agreement can save tens of thousands of euros and years of litigation later.

Need Professional Help?

At Atrium Romanian Lawyers, we assist clients with corporate & commercial law, contract drafting, shareholder disputes, and company formation.

What Is a Shareholder Agreement?

A shareholder agreement is a private contract between shareholders that regulates shareholder rights and obligations, management and governance rules, voting procedures, profit distribution, share transfers and exit mechanisms, deadlock resolution, and restrictions on competition and confidentiality.

Key advantage: Unlike the Articles of Association, shareholder agreements are not filed publicly, making them ideal for protecting proprietary deal structures and maintaining sensitive voting arrangements.

Why Romanian Companies Benefit from Shareholder Agreements

Romanian Companies Law (Law 31/1990) provides only baseline protections. Majority rule dominates decision-making, share transfer restrictions are minimal in SRLs and SAs, there is no automatic deadlock resolution, and founder exit rules are not regulated.

A shareholder agreement allows shareholders to customize protections beyond these statutory defaults, providing greater stability and clarity, particularly for startups and companies with foreign investors.

Essential Clauses in a Romanian Shareholder Agreement

1. Capital Contributions & Ownership Structure

Clearly define each shareholder’s initial contribution (cash, assets, IP), future contribution obligations, and ownership percentages and voting rights.

IP Consideration: Without explicit assignment clauses, IP created by founders may legally remain with the individual. To ensure enforceability, draft separate IP assignment agreements and include employment contracts with IP clauses for founder-employees.

Enforceability: Strong if properly documented.

2. Voting Rights and Decision-Making

Shareholder agreements cannot enforce voting obligations in Romanian law. However, they can require supermajorities for internal contractually binding decisions, create additional shareholder rights and internal governance rules, and define reserved matters for shareholder consultation.

Coordination: To affect the company externally, critical voting thresholds must also appear in the Articles of Association.

3. Management Roles & Responsibilities

Define roles, authority, and reporting obligations for CEO, Managing Director, CFO, CTO, and specify decision authority limits and key performance indicators.

Enforceability: Strong. These internal rules are binding among shareholders.

4. Profit Distribution

Set frequency and conditions for dividend distribution, minimum or mandatory reinvestment thresholds, and handling of losses.

Tax Considerations: Dividends face 5% withholding tax for Romanian residents, while management fees vs. dividends have different taxation and deductibility implications. Coordinate with a tax advisor to optimize both corporate and personal tax outcomes.

5. Share Transfer Restrictions

Common clauses include right of first refusal (ROFR), right of first offer (ROFO), tag-along rights (minority protection), drag-along rights (majority exit facilitation), lock-up periods, and transfers to affiliates.

Important Note: Binding between shareholders (strong enforcement) but external enforceability requires Articles of Association registration.

6. Exit Clauses

Include buy-out mechanisms, put/call options, shotgun clauses, drag-along and tag-along clauses, and valuation methodologies.

Enforceability: Buy-sell and call/put options are enforceable; drag-along/tag-along are enforceable internally; external enforceability requires Articles coordination. Valuation clauses are enforceable if clearly defined.

7. Deadlock Resolution

Common mechanisms include mediation → arbitration → binding resolution and buy-sell triggers (Russian roulette, Texas shoot-out).

Important: Romanian law does not enforce vote obligations. Deadlock clauses must rely on mechanisms other than forcing votes. Enforceability is strong if designed around buy-sell or arbitration.

8. Non-Compete and Confidentiality

Specify duration, scope, and geographic limits with reasonable exceptions.

Legal Limits: Article 21 of the Romanian Constitution protects the right to work. Non-compete clauses must be reasonable in time, geography, and scope. Overbroad clauses may be void.

9. Dispute Resolution

Choose between domestic arbitration (VIAC, Romanian Chamber of Commerce) or international arbitration (ICC, LCIA, Vienna). Specify language and governing law.

Enforceability: Strong. Foreign arbitral awards are recognized under the New York Convention.

10. Notarization

Not legally required but provides proof of authenticity and signature dates, enhances enforceability against heirs or successors, with cost of €50–€150.

Common Mistakes and Overstatements

Updating Your Agreement

Review your shareholder agreement every 2–3 years or after major events such as:

• New investors: Add rights, pre-emption clauses, anti-dilution protections
• Founder changes: Update vesting, non-compete, management roles
• Business pivots: Adjust permitted activities, IP clauses, exit rules
• Regulatory changes: Beneficial ownership disclosure, corporate governance, foreign investment rules

Useful Resources & Links

FAQ – Shareholder Agreements in Romania

Conclusion

A shareholder agreement in Romania is not optional for companies with multiple shareholders, foreign investment, or high-value assets. It provides protection against disputes and deadlocks, clarification of governance and decision-making, IP protection and alignment of founders, and clear exit and valuation mechanisms.

Key legal caveats: Voting obligations cannot be enforced; external enforceability requires Articles coordination; vesting must use Romanian-compliant legal mechanisms; non-compete clauses must be reasonable; and tax planning should be integrated.

Next Steps

• Coordinate drafting with a Romanian corporate lawyer
• Ensure key clauses appear in both shareholder agreement and Articles of Association
• Include IP assignment, dispute resolution, and proper exit mechanisms
• Review tax implications for dividends, management fees, and exits

A shareholder agreement, when properly structured, is the foundation for sustainable, conflict-free business in Romania.