Germany Update: CONSTRUCTION AND REAL ESTATE LAW

Ineffectiveness of the defect-related termination before acceptance according to § 4 Abs. 7 S.3 VOB/B – What now?

If the VOB/B has not been agreed as a whole, the validity of individual clauses can be reviewed in accordance with §310 Abs. 1 S. 3 BGB. This check is possible as soon as there is a deviation from the VOB/B in even individual points. This applies regardless of the weight of the interference with the VOB/B. In the past, the effectiveness of the regulation on “defect rights” before acceptance, as regulated in § 4 Abs. 7 VOB/B, was discussed controversially. While several higher regional courts have so far considered § 4 Abs. 7 S. 3 VOB/B in the terms and conditions of the client to be effective, the effectiveness of § 4 Abs. 7 VOB/B in the terms and conditions of the client has been doubted for years in the literature. Now the Federal Court of Justice in its judgment of 19.01.2023 (Az. VII ZR 34/20) to clarify this dispute.

Circumstance

The client commissioned the contractor as subcontractor for road and civil engineering work worth approx. EUR 3,000,000.00. However, the limitation period for warranty claims specified in VOB/B has been amended, and VOB/B has not been agreed as a whole. During construction, the client complained, among other things, about the quality of the concrete used. It repeatedly requested the contractor to remedy the defect (costs approx. EUR 6,000.00) and threatened termination, setting a deadline. After expiry of the deadline, the client terminated the contract. With the lawsuit, the contractor seeks payment of the remaining work wages. The client claims – among other things – the costs of the substitute performance and bases itself on its rights according to § 4 Abs. 7 VOB/B.

Decision

The client cannot demand reimbursement of the costs. § 4 Abs. 7 S. 3 i.V.m. § 8 Nr. 3 Abs. 1 S. 1 Var. 1 VOB/B is ineffective in this case! If the VOB/B has not been agreed as a whole, the termination regulation unreasonably disadvantages the contractor due to defects before acceptance. § 4 Abs. 7 S. 3 VOB/B creates the possibility to terminate also due to insignificant defects. This is contrary to the fact that acceptance may only be refused in the case of significant defects. In accordance with the termination for good cause, a legitimate interest of the client in the premature termination of the contract is also required. Otherwise, the client could terminate “up to the limit of abuse of rights”. By unilaterally drafting the contract, the client would be able to abusively enforce its own interests at the expense of its contractor without the contractor being granted corresponding compensation.

Practical note

As soon as even small changes are made to the VOB/B, caution is required. This applies in particular to clients who provide the contract and thus also the VOB/B. If contracts are (still) to contain deviations from the VOB/B, it is therefore strongly recommended to agree on a clause which largely replaces § 4 para. 7 sentence 3 VOB/B and modifies it accordingly. Otherwise, the client is dependent on the legal regulations. The particular difficulty here is to strike the right balance between the interests of both parties, so that the clause allows the client to intervene as early as possible in the event of defects, but still meets the requirements of the Federal Court of Justice. If you have any questions about the implementation of the judgment of the Federal Court of Justice, please contact our team for private construction and architectural law.

By MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

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