which is to be passed during the current legislative period. If the draft is implemented in this form, construction contract law will be incorporated into the German Civil Code (BGB), including architects' law. We provide an overview of the specific changes.
With this project, the German government is following a recommendation from lawyers specializing in private construction law. For years, they have been advocating the creation of special rules for building and architects' contracts in the German Civil Code. With the introduction of the draft bill, the "Act to reform construction contract law and to amend the liability for defects under sales law" has reached a first milestone.
Complex construction law needs legal regulation
To date, the subject matter of construction and architectural law has been inadequately regulated by law. In its justification for the legislative initiative, the German government correctly describes the fundamental problem as follows:
"The construction industry is one of the largest and most important economic sectors in the Federal Republic of Germany. Construction technology has developed steadily over the past decades. Construction law has also become - partly in parallel with this - a complex specialized subject matter on which extensive case law has been issued. This is almost impossible for the legal practitioner to keep track of. The current law on contracts for work and services is very general with regard to the various possible contractual objects. The provisions of the law on contracts for work and services are often not detailed enough for complex construction contracts with a longer performance period. Essential questions of construction contract law are not regulated by law, but left to the agreement of the parties and case law."
The German government's proposed solution
With its draft bill, the German government intends to regulate fundamental issues and special problems of construction and architectural law in separate chapters of the BGB. If the German government's proposal is implemented, this will in future contain rules on construction contracts in Sections 650a - 650g BGB, rules on consumer construction contracts in Sections 650h - 650n BGB and rules on architects' and engineers' contracts in Sections 650o - 650s BGB.
A brief outline of the key changes:
The construction contract
For the construction contract, the German government wants to introduce a regulation in Section 650b BGB that enables the client to enforce changes to the contract if his construction requirements are to be executed differently or changed. At present, this is difficult to enforce without a corresponding contractual agreement. At the same time, an adjustment to the contractor's remuneration claim will be regulated for these cases in Section 650c BGB. Both regulations expressly open the way to interim legal protection in order to take account of the special time problems associated with ongoing construction projects.
Section 650f BGB creates the possibility for the building contractor to have the condition of the construction work performed by him bindingly determined, even without the cooperation of the client. This represents a fundamentally appropriate solution to the problems arising from the passage of time in construction processes that often last many years, although it still has to prove itself in practice.
The consumer construction contract
For a construction contract concluded with a consumer, the Federal Government intends to regulate three central aspects, among others:
- The building contractor will be obliged to provide the client with a building specification that must meet certain statutory requirements (Section 650i BGB).
- The client is given the option of revoking a concluded construction contract if the parties do not notarize the construction contract (Section 650h BGB). In addition to this, the contractor is subject to instruction obligations.
- In future, the client will have the right to demand that the contractor hand over the relevant planning documents for the building (Section 650m BGB).
The architect/engineer contract
Architect and engineer contracts sometimes have the problem that it is not sufficiently clear from them what the object of the planning is supposed to be. For this reason, the Federal Government wants to stipulate in Section 650o BGB that a basis for determining the main objectives of the planning must first be created. The rest of the contract is based on this. If this planning basis, including a corresponding cost estimate, is missing or if the client is not satisfied with it, he should in future be given a special right of termination subject to a time limit (Section 650q BGB). The BGB already recognizes a free right of termination for work contracts. However, the special right of termination for the client has the advantage that he does not have to pay the commissioned architect/engineer any compensation for terminating the contractual relationship prematurely.
In addition, a regulation on partial acceptance will be created in Section 650r of the German Civil Code (BGB) for architectural contracts. The architect can then demand acceptance of his services at the time the construction project is completed, even without a separate agreement. For the architect, this regulation means a way out of a dilemma: In cases in which he has undertaken to continue to supervise the construction project during the warranty phase, the warranty ends for him without such a partial acceptance at the earliest 10 years after acceptance of the building.
Conclusion: An important step in the right direction
The government's draft is an important step in the right direction. It will not solve all the problems of construction contract practice because many issues that should also be regulated in a good construction or architect's contract are not addressed in the draft law. This is not the aim of the law. Until the regulation comes into force, it is recommended that the issues addressed be regulated in the building or architect contracts to be concluded. However, even after entry into force, there will still be a need for supplementary regulations for the contracts to be concluded.
Dr. Christian Kuhlmann