Construction Contracts: new rules from 2018

Germany: From 2018 the legal basis for construction contracts will be specially regulated in the Civil Code for the first time

Reform of the Law on Construction Contracts brings numerous new regulations into the German Civil Code (BGB): For the first time, a legal definition of the term “construction contract” appears. Additionally, issues are regulated which formerly had only been addressed by the GBTC (e.g. VOB/B) or case law.

In addition, two further types of contract will be added to the BGB:

A consumer construction contract regulates questions on consumer rights to terminate and withdraw and sets a duty for the contractor to provide certain building specifications to the customer.

An architect and engineering contract defines certain requirements and duties from architects and engineers.

A significant amendment is the customer’s right to order changes in construction. Under certain conditions the customer may unilaterally change the content of the construction order, thereby requiring additional services. In doing so, the parties have to follow a specific procedure: First, the customer must send instructions to the contractor. Then, within 30 days the parties have the chance to reach mutual agreement with regard to remuneration and other details. If they cannot reach agreement the customer may unilaterally instruct the contractor about the changes in writing. The contractor is bound to do as instructed, to the extent that the instruction is reasonable.

Finally, the law is adapted to current ECJ jurisprudence in the field of sales contracts: A seller that delivers defective items is liable not only for replacement of the items but also for the costs of installation and assembly in this context.

Source: Draft law of German Bundestag, Drucksache 18/8486

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