Can an Egyptian services contract cap liability for construction defects?

Not for the decennial liability. Article 651 of the Egyptian Civil Code makes the architect and the contractor jointly liable for ten years from handover for total or partial collapse and for defects threatening the building's solidity and safety, and Article 653 makes void any term intended to exempt them from that liability or to limit it. Article 654 gives a claimant three years from the collapse or the discovery of the defect to sue.

When is payment due under an Egyptian service agreement?

Article 656 of the Egyptian Civil Code makes the remuneration due on delivery of the work unless custom or the agreement provides otherwise. Article 655 adds that where the contractor has completed the work and placed it at the client's disposal, and the client refuses to take delivery without a legitimate reason despite a formal notice, the work is treated as having been delivered.

Service Agreement in Egypt

Egyptian services work is drafted against the contract-for-work chapter of the Civil Code, which supplies default rules on price, variations, acceptance and subcontracting that override loose commercial drafting. Two of them bite hardest. Where the price was agreed as a lump sum on an agreed design, the contractor cannot ask for more even if the design was modified or added to, unless that was the client's own doing. Where the work is a building or other fixed structure, the architect and contractor are jointly liable for ten years and any clause excluding or limiting that liability is void.

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Governing law

A services engagement is a contract for work (muqawala) under Articles 646 to 667 of the Egyptian Civil Code (Law No. 131 of 1948), which regulate the contractor's and the client's obligations, pricing, acceptance and termination.

Egyptian Civil Code (Law No. 131 of 1948), Arts. 646 to 667 (Arabic text via WIPO Lex, consolidated to Law No. 55 of 1970)

What a service agreement has to contain in Egypt

Once the contractor completes the work and places it at the client's disposal, the client must take delivery as soon as the ordinary course of dealings permits, and if the client refuses without a legitimate reason despite a formal notice the work is treated as delivered.
Egyptian Civil Code (Law No. 131 of 1948), Art. 655
The remuneration falls due on delivery of the work unless custom or the agreement provides otherwise.
Egyptian Civil Code (Law No. 131 of 1948), Art. 656
Where the contract is made on a unit-rate estimate and it appears during the work that executing the agreed design will require a perceptible overrun of the estimate, the contractor must notify the client at once with the expected increase, failing which it loses the right to recover the excess over the estimate.
Egyptian Civil Code (Law No. 131 of 1948), Art. 657(1)
Where the contract is made for a lump-sum price on a design agreed by the client, the contractor may not claim any increase in the price even if the design was modified or added to, unless the modification is attributable to the client.
Egyptian Civil Code (Law No. 131 of 1948), Art. 658(1)
The architect and the contractor are jointly liable for ten years from the date the work is handed over for total or partial collapse of what they built or of the fixed structures they erected, and for defects that threaten the solidity and safety of the building.
Egyptian Civil Code (Law No. 131 of 1948), Art. 651

What catches drafters out

Any term intended to relieve the architect or the contractor from the ten-year liability, or to limit it, is void, so a liability cap in a construction or fit-out services agreement does not reach that exposure.
Egyptian Civil Code (Law No. 131 of 1948), Art. 653
Claims under the ten-year liability lapse three years from the date the collapse occurred or the defect was discovered.
Egyptian Civil Code (Law No. 131 of 1948), Art. 654
Where the estimate overrun needed to execute the design is serious, the client may withdraw from the contract and stop performance, but must do so without delay and must pay the contractor the value of the work performed assessed under the contract terms, without compensating it for the profit it would have earned on completion.
Egyptian Civil Code (Law No. 131 of 1948), Art. 657(2)