Reform of Construction Contract Law Planned in Germany
By Christoph Mank, K&L Gates, Berlin
Despite the huge economic significance of the construction industry to Germany, there is, as yet, no codified construction contract law. Usually, general services contract law according to the German Civil Code (Bürgerliches Gesetzbuch – BGB) is applied to contract types as varied as manual repair work and project developments involving millions of Euros. Traditionally, general contractual terms known as “VOB/B” (Verdingungsordnung für Bauleistungen), which have existed for almost 100 years, are of considerable practical importance to the German construction industry. They are flanked by increasingly extensive case law regarding individual issues of construction law, requiring expert knowledge to comprehend the legal framework for construction contracts. A codification of construction contract law has been called for in Germany for a long time. The most recent comprehensive reworking of the law of obligations, which came into effect in 2002, also saw a revision of services contract law, but without consideration of the specific characteristics of construction contracts. The pressure exerted by practitioners on the legislature has increased due to recommendations issued by the building commission, “Deutscher Baugerichtstag”, that has been convening biannually since 2006. In September of this year, a draft bill was presented by the Federal Ministry of Justice and Consumer Protection (Bundesministerium der Justiz und für Verbraucherschutz) for the reform of the construction contract law. There will be considerable need for further discussion regarding the details in the consultations currently taking place among interested groups. However, we would like to take this opportunity to give an overview of the planned changes to the law.