Short answer. Yes, the contract is rescinded upon his death under Article 1726. You owe his heirs a proportionate amount based on the price agreed upon, the value of the work already done, and any materials prepared, but only to the extent those materials actually benefit you.
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When a piece of work has been entrusted to a person by reason of his personal qualifications, the contract is rescinded upon his death.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 →
What the law says
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
Civil Code, Article 1726 — Death of a Contractor Chosen for Personal Qualifications. Read the full provision →
The contract ends automatically at death
Article 1726 addresses exactly this kind of engagement, where you hired someone specifically for their personal skill rather than for work anyone could do. It states that when a piece of work has been entrusted to a person by reason of his personal qualifications, the contract is rescinded upon his death. Because you were relying on that particular craftsman's individual talent, not just on the general result, the contract cannot simply continue with someone else stepping in; his death ends it by operation of law, without needing you or his heirs to take any further action to terminate it.
What you owe his heirs for the completed work
Rescission at death does not mean the heirs walk away with nothing for what was already accomplished. 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. You owe payment proportionate to how much of the agreed work was actually finished, valued against the original price, plus the value of materials prepared for the job, but only insofar as those prepared materials actually benefit you as the person who hired the work.
The same rule for incapacity, not just death
Article 1726 extends beyond death alone. It adds: The same rule shall apply if the contractor cannot finish the work due to circumstances beyond his control. If your craftsman became unable to complete the work for reasons outside his control, such as a serious accident or illness that permanently prevented him from continuing, the same rescission and proportionate payment framework applies, even though he did not die. The key trigger is the loss of the specific person the work depended on, not death as such.
What this means for settling with the heirs
Because the contract is rescinded rather than simply suspended, you are not obligated to wait for someone else to finish the work under the original agreement, and the heirs are not obligated to complete it either. What remains is a settlement based on the proportion of work actually done and materials genuinely useful to you, measured against the price you originally agreed to pay for the whole job.