Explanation of Article 478
The article addresses the effect of the contractor's death in a contract for work; it differentiates in judgment between whether the contract stipulated that the contractor must work personally or if the contract was concluded based on considerations related to his person, or if the contract lacked such stipulations.
The first paragraph clarifies the judgment in cases where the contract stipulated that the contractor must work personally or if the contract was concluded based on considerations related to his person; this is often the case in contracts that require special technical skills, such as contracts with a doctor, lawyer, designer, trainer, and the like, if the person of any of them was intended in the contract for their expertise in that work; the contract for work is automatically dissolved upon the contractor's death due to the impossibility of execution, and this does not require a court ruling.
The second paragraph clarifies the judgment in cases where the contract did not stipulate that the contractor must work personally and the contract was not concluded based on considerations related to his person; this is often the case in small contracts that do not require special technical skills, or large contracts that do not rely on the contractor's own competence for execution; the contract does not dissolve automatically; however, the employer has the right in this case to request dissolution if the heirs do not provide sufficient guarantees for the proper execution of the work, such as lacking sufficient expertise to execute the work appropriately; but if they provide sufficient guarantees for proper work, the court will reject the employer's request, and the contract remains in effect, with the contract rights transferring to the heirs and the obligations transferring to them within the limits of the estate.
The third paragraph clarifies the effect of the contract dissolving automatically according to the first paragraph or its dissolution based on the employer's request according to the second paragraph, which is that the heirs are entitled to compensation similar to the compensation the contractor would be entitled to in case of his inability to work in Article (477), by compensating them with the lesser of two values: the first value is the value of the work completed and what their predecessor spent on the unfinished work. The second value is the benefit returned to the employer.
This compensation is not based on contractual liability; if the contract is dissolved or annulled, it has no effect, but the heirs are entitled to it by applying the rules of unjust enrichment.
The article does not address the effect of the employer's death in a contract for work, relying on general rules; his death has no effect on the contract, and his rights in the contract transfer to the heirs, and the obligations transfer to them within the limits of the estate.
Related To
Article 478
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A contract for service shall terminate upon the contractor’s death if it is stipulated that the contractor executes the work himself or if the person of the contractor was a decisive factor in the conclusion of the contract.
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If the stipulation stated in paragraph (1) of this Article is not included in the contract and the contractor’s person was not a decisive factor in the conclusion of the contract, the client may demand termination of the contract if the heirs do not possess sufficient capabilities to execute the work.
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The heirs shall, in the cases provided for in paragraphs (1) and (2) of this Article, be paid for the completed work and for any expenses incurred for the uncompleted work to the extent of the benefit accrued to the client.