Stopping the works: what the client's withdrawal costs (art. 1594 Civil Code)

The text is short: "The owner may withdraw, at his sole will, from the construction of the works even if it has been started, compensating the contractor for all his expenses, work and the profit he could have obtained from it" (unofficial translation). Three ideas follow from it. The client needs no cause and no breach by the contractor: its will is enough. It can do so once the works have started. And the compensation is not limited to what has been carried out but includes the profit, that is, the margin the contractor would have earned had it completed the works.

The article comes straight after article 1593, which governs the fixed price and extra works. The two are read together: when a budget runs out of control through changes authorised without a price, as explained in the article on extra works under a fixed-price contract, withdrawal appears as a way out, and it is worth knowing what it costs before invoking it.

The cost of withdrawing is not the compensation: it is the compensation plus the cost of having someone else finish the works. It is calculated in four blocks.

Item	What it includes	Where the figure comes from
Work carried out	the works built to date, at contract prices	last interim certificate and joint measurement at the stopping date
Contractor's expenses	orders, materials stockpiled on site, hire or commitments not incorporated into the works	contractor's supporting documents, reviewed by the dirección facultativa (the site direction team)
Profit	the margin the contractor expected on the outstanding works	analysis of the contract price; this is the most disputed item
Completion	the new contractor's price and the client's own costs	new tender, timescale, site direction, finance

The work carried out is fixed by a measurement at the stopping date. The mechanics of the final account of the works are explained in the quantities guide; what matters here is that the measurement is a joint one (medición contradictoria) and is signed, because it will be the basis for the rest of the calculation.

Expenses are justified one by one. Materials already paid for and delivered to site may be used by the contractor who finishes the job, if the contract and their condition allow; an order cancelled with a penalty is an expense with nothing in return. The difference changes the balance.

Profit is the most disputed item. The text speaks of the profit "he could have obtained" from the works, without setting a percentage or a method. Its amount depends on the evidence in the case, and it is unwise to assume it will be minimal in the forecast.

Completion is the most forgotten item. A new contractor does not take over the works at the outstanding price of the previous contract: it has to review what has been done, take on someone else's warranties and reorganise the site. On top of that come the client's own costs: a new tender, additional months of site direction, interest and delay in bringing the building into use.

The following figures are fictitious and only illustrate the calculation. A fixed-price contract of 1,200,000 euros excluding VAT; at the date of the decision, 480,000 euros has been carried out and certified, leaving 720,000 euros of outstanding works. There are 130,000 euros of extra works under dispute.

Item	Carry on	Withdraw
Work carried out	480,000	480,000
Outstanding works at contract price	720,000
Extra works under dispute, probable amount	130,000
Contractor's expenses not incorporated		45,000
Profit on outstanding works (assumption: 8% of 720,000)		57,600
New contractor's price to complete		790,000
Client's own costs (tender, site direction, delay)		40,000
Forecast final cost	1,330,000	1,412,600

In this example, stopping costs 82,600 euros more than carrying on, even with the disputed extra works counted at their probable amount. Withdrawal would only come out ahead if the price for completion by another contractor were clearly lower, or if the disputed extra works were much larger. Abandoning the scheme without finishing it would come to 582,600 euros (480,000 + 45,000 + 57,600) plus the client's own costs, but with no building: the comparison is then no longer about the budget but about the project itself.

Withdrawal is presented as one more option, in the same format as the others. Alongside carrying on as planned, negotiating with the contractor a reduction in the scope or in the price of the extra works, or accepting a higher final cost with additional funding, the note presents stopping and finishing with another firm and, where relevant, abandoning.

For each option, the note states the forecast final cost, the timescale, the main risk and what remains to be decided. With withdrawal, the main risk is usually the profit claimed and the quality of the handover between contractors; with carrying on, that the disputed extra works grow. The change register and the dashboard described in tracking the final cost during the works provide the starting figures.

If the contract contains a withdrawal clause or a lump-sum compensation, read it first, because it may change the order of the calculation. How far it prevails over article 1594 is a question of interpretation in each case, best put to a legal adviser before the decision is communicated.