Architectural and Engineer Contracts in Germany

Architectural and engineering contracts are concluded between contractors or clients. Under Section 631 (1) of the German Civil Code (BGB), the contractor is obliged by the conclusion of the contract to provide the services that are required according to the respective state of planning and execution of the building or outdoor installation to achieve the planning and monitoring objectives agreed with the client. The architect or engineer owes the client this specific result based on the contractually agreed objectives. Section 631 BGB covers the construction of buildings and outdoor facilities. The latter refers only to design work. This means, for example, the redesign of a garden. If a building is not firmly connected to the ground, the work does not fall under the provisions of Section 631 ff. BGB.

It should be noted that the architect or engineer is owed the success typical of the contract for work and services, but not the services. These merely serve to achieve the contractually agreed goal.

Pursuant to Section 631 (2) BGB, if essential planning and monitoring objectives have not yet been agreed, the contractor shall first prepare a planning basis for determining these objectives. The planning basis shall then be submitted to the Employer. A cost estimate for the project must also be made during this.

As soon as the client has received the planning basis and the preliminary cost estimate, he may agree to the project or exercise his special right of termination. If the client agrees to the objectives proposed to him by the submitted planning basis and thus to the cost estimate, the target setting is completed and the subsequent service phase begins.

Under Section 649 BGB, the purchaser may terminate the contract after submitting the documents mentioned above. The orderer has this right for a fortnight. Consumers within the meaning of Section 13 BGB must be informed in advance by the contractor about the right of termination and its consequences (Section 649 BGB). If the consumer was informed in text form, the client’s right of termination expires after 14 days.

Likewise, the architect or engineer has a right of termination. Under Section 649 BGB, the architect or engineer may set a reasonable deadline for the client’s consent. If the client again refuses to give their consent or does not provide an explanation within the period set by the contractor, the architect or engineer may also terminate the contract.

Since the architect or engineer will prepare the planning basis mentioned in Section 631 BGB based on an existing contract between the latter and the client, in the event of termination, the architect or engineer also has a claim to remuneration for the services rendered up to that point.

The German law firm Schlun & Elseven will support you in implementing your rights. We will explain the special right of termination and the consequences of this termination to you in a personal meeting. We also support contractors during the contract process and advise them on any matters related to the architect or engineer contract.

The requirements for termination differ between the respective contracting parties: The ordering party can terminate the contractual relationship at any time and without stating a reason, whereas the commissioning party can only terminate the relationship if, in its opinion, there is an important reason.

In the following, we will go into the different termination options and the requirements necessary to terminate the contractual relationship:

According to Section 649 BGB, the purchaser may terminate the contract at any time until the completion of the work. It is not necessary to state an important reason. It must be considered here that the client may then be obliged to pay the agreed remuneration. According to Section 649 BGB, however, this is only the case if the following expenses or income are considered:

• Expenses saved by the agent because of the cancellation of the contract,
• income from the use of their labour elsewhere,
• income that the contractor could have acquired but maliciously fails to do so.

Both parties to the contract may terminate the contract for good cause without observing a notice period. A good cause exists if the terminating party considers all circumstances of the individual case and, weighing the interests of both parties, cannot reasonably be expected to continue the contractual relationship until completion of the work. If the termination relates to a definable part of the work owed, a partial termination is also possible.

Section 314 paras. 2 and 3 BGB also apply. Here, too, an important reason is required. However, according to Section 314 para. 2 BGB, this consists in the breach of an obligation arising from the contract. Such a breach could, for example, be the failure to pay the agreed remuneration. However, termination because of good cause is only possible if a reminder or warning has been issued beforehand. If the other party fails to fulfil its obligation despite a reminder or warning, termination would be possible (Section 314 para. 2 sentence 1 BGB).

Here, too, in the event of termination by one party to the contract (similar to the special right of termination, see above), the contractor only has a claim to remuneration for the services rendered up to that point.

Our German contract lawyers will be happy to examine your options for terminating the contractual relationship. To do so, contact us today using our online form below. We will check your contract for specific termination agreements and explain your options.

For which defects can the architect or engineer be held liable at all? As a rule, the contractor carrying out the construction is liable for defects in the building. The architect or engineer is only responsible for defects due to their defective performance. The architect or engineer can also be held accountable for defects in the building due to his faulty construction supervision or planning – partly caused by the contractor carrying out the construction.

Many defects for which an architect or engineer can be held responsible arise from the German Ordinance on Fees for Architectural and Engineering Services (HOAI). In Section 34 HOAI, a distinction is made between different service phases. These can be divided as follows:

• Service phase 1-5: Goal setting or planning phase,
• Work phase 6-7: Preparation of or participation in the awarding of contracts,
• Service phase 8-9: Monitoring phase.

Defective performance by the architect or engineer can occur in any phase. A distinction is made between defects in the building, or the outdoor installation and damage caused to a third party or the client themself. Section 634 BGB, regulates the client’s rights in the event of defects, and Section 650t BGB regulates the former. The latter refers to the tortious liability of the commissioned architect or engineer.

Note: The architect’s contract is characterised by the fact that the architect promises a planning or supervisory service suitable as a basis for constructing a defect-free building. In contrast, they do not promise that the building will be built without defects (BGH, decision of 08.10.2020 – VII ARZ 1/20). This means the architect or engineer does not owe the client a defect-free building but rather defect-free planning and supervision. For example, the commissioned architect or engineer is liable if they fail to fulfil their duty to check the performance of other parties involved in the construction work to ensure a smooth construction process or if they have made a mistake in calculating the costs. As a result, the agreed sum is exceeded. The architect or engineer can also be held responsible for the breach of pre-contractual duties.

Regarding the rights of the purchaser in case of defects, Section 650t BGB must be observed. This regulates joint and several liabilities with the company carrying out the construction. Suppose the employer asserts a claim against the contractor because of a supervisory error which has led to a defect in the construction work or the outdoor installation. In that case, the contractor may refuse performance if the contractor carrying out the work is liable for the defect. The employer has not yet unsuccessfully set the contractor carrying out the construction work a reasonable deadline for subsequent performance.

Therefore, the architect or engineer supervising the construction is not immediately liable. Instead, they are granted a right to refuse performance. Although the architect or engineer and the contractor carrying out the construction work are jointly and severally liable, the standard prevents the former from being held responsible immediately if the latter is unable to take the opportunity for subsequent performance. This means that the architect or engineer is only liable if the contractor carrying out the construction work is also liable for the defect and if they also fail to fulfil their duty of supplementary performance so that the defect is not remedied.

The architect or engineer does not have the right to refuse performance if the removal of the defect by the contractor carrying out the construction is no longer possible, is justifiably refused or is time-barred.

Due to their duty to advise and inform, the architect must ensure that the client and third parties do not suffer any damage to the health or property of these persons. If such damage occurs because of the architect or engineer failing to exercise due care, the architect or engineer is liable under Section 823 ff. BGB. However, such tortious liability requires at least negligent conduct on the part of the architect or engineer. This must then have caused foreseeable and avoidable damage.

The claims for supplementary performance, liability for defects and damages in respect of a building and a work, the success of which consists in the provision of planning and supervision services for it, are generally subject to a limitation period of five years (Section 634a (1) no. 2 BGB). It must be borne in mind that the above-mentioned partial acceptance (Section 650s BGB) must be considered here. Partial performance accepted at an early stage is subject to the statute of limitations sooner than later performance.