the problem of business-as-usual costs. The issue is not readily apparent to clients who are not active in the construction industry. The customer of a work performance must contribute an amount - the "no matter what costs"- to the costs of remedying the defect. This applies even though there is a claim for rectification of defects against the building contractor. We take a brief look at why this is the case.
The functional definition of defects
According to the case law of the Federal Court of Justice, the functional concept of defects applies in the law on contracts for work and services - which also includes construction contract law: "A work performance is defective if it does not fulfill the agreed function or the function required by the contract." This means, for example, that a roof must be watertight, i.e. keep the rain out. This is not surprising at first glance. Nevertheless, it sometimes requires more complex reasoning for lawyers - and so the Federal Court of Justice (as the third instance!) actually had to decide that a leaky roof is defective because it has to be watertight.
This result is directly comprehensible for technical errors in the execution of the work. In construction contracts, however, the work to be carried out by the contractor is often specifically described in a construction or service description and with reference to construction drawings. The building contractor must then generally produce the work in accordance with these documents.
Question: But what happens if the roof to be erected is described in the specifications and/or in the plan drawings referred to in the construction contract in such a way that rain can penetrate? Can the contractor then reject a notice of defects from the client with the argument that he has ultimately built the roof as agreed?
Answer: No, if the permeable roof has not been expressly agreed between the contracting parties or the contractor has pointed out the problem with a notice of concern, he will not be able to do so.
Reason: The fact that a roof does not let rain through is one of the properties of a roof that the customer can normally expect. According to the Federal Court of Justice's functional definition of defects, it is one of the contractor's tasks to produce his work in such a way that the purpose of the contract to produce a work is achieved and the work fulfills its agreed function or the function required by the contract. This applies regardless of whether the contracting parties may have agreed a different type of execution that does not make this possible. A roof must therefore be watertight.
The costs anyway
Let's assume that the roof is leaking because the specification forgot to include the installation of a roof underlay. It is installed under the tile covering of the roof to ensure that it is rainproof. The contractor will obviously object that the underlayment was not part of the services calculated in the contract and therefore not part of his remuneration. If he had offered it when the contract was awarded, he would have received additional remuneration for it. Why should this be any different now if he carries it out in the course of remedying the defect to construct a functional work?
This argument will indeed be heard by the Federal Court of Justice: If the service required for the defect-free construction of the work was not included in the price of the contract, the costs of its execution would have been incurred anyway if the contract had originally been concluded taking it into account. The customer must therefore also reimburse the contractor for the costs required for execution in the course of remedying the defect from the point of view of equalization of benefits. However, the costs of remedying the defect as a whole will usually go far beyond this. In the example case, the client would only bear the costs of installing the underlayment itself. The costs of dismantling the roof and the subsequent reconstruction, on the other hand, would have to be borne by the building contractor.
Result
As a result, the functional concept of defects and the no-worries costs complement each other to form a balanced system: the building contractor must provide those services that are necessary for a functioning work. The customer must pay for these.