Short answer. Yes to both. Article 1726 says that when work was entrusted to a person by reason of his personal qualifications, the contract is rescinded upon his death. The proprietor must then pay the contractor's heirs, in proportion to the agreed price, for the part of the work done and materials prepared that benefit him.
What the law says
When a piece of work has been entrusted to a person by reason of his personal qualifications, the contract is rescinded upon his death.
Civil Code, Article 1726 — Death of a Contractor Chosen for Personal Qualifications. Read the full provision →
Why this contract ends at death
Most contracts survive a party's death and pass to the heirs, who must carry them out. This one is different because of why the contractor was chosen. Article 1726 provides: When a piece of work has been entrusted to a person by reason of his personal qualifications, the contract is rescinded upon his death. If you hired a particular craftsman, artist or specialist precisely for his own skill, reputation or ability, that skill cannot be inherited. The very thing you contracted for dies with him. So the law ends the contract rather than force you to accept performance by someone you never chose.
The heirs are paid for what was done
Ending the contract does not mean the contractor's family gets nothing for work already completed. The article continues: the proprietor shall pay the heirs of the contractor in proportion to the price agreed upon, the value of the part of the work done, and of the materials prepared, provided the latter yield him some benefit. So you owe the heirs a proportionate share of the agreed price for the finished portion, plus the value of materials prepared — but only to the extent those materials are actually of some benefit to you. It is payment for value received, not for the whole contract.
The 'personal qualifications' condition
This rule only applies where the contractor was engaged because of who he is. If the work is ordinary and could be done just as well by anyone competent, the personal-qualifications reason is missing, and death does not automatically rescind the contract in the same way. The test is whether the identity and personal ability of the contractor were essential to the bargain. A commission for a specific artist's original work fits; a routine repair that any tradesman could complete generally does not, and different rules on the parties' obligations may apply.
The same rule for causes beyond his control
The article extends the treatment beyond death. It states: The same rule shall apply if the contractor cannot finish the work due to circumstances beyond his control. So if such a specially chosen contractor is prevented from completing the job by causes he could not help — not by his own fault or abandonment — the contract is likewise treated as rescinded, and he (or his heirs) is paid proportionately for the beneficial part done. The provision balances two interests: you are not bound to a performance you can no longer receive, and the contractor's side is compensated for the value already delivered.