Important Decision on Liability in Construction Contracts Important Decision on Liability in Construction Contracts
In a significant decision, the Federal Court of Justice (BGH) ruled on August 27, 2024, in the case X ZR 71/22. The case concerns the liability of construction contractors for defects in buildings that arise during the warranty period. The decision is particularly relevant for both clients and construction companies, as it clarifies the responsibility for the quality of the work performed.
According to the judges of the BGH, construction contractors are obliged to provide the agreed services in a defect-free condition. In the event of defects occurring within the warranty period, they must bear the costs of rectification. This responsibility encompasses both gross and slight negligence. A contractor cannot exempt themselves from this obligation by arguing that the defect was outside their area of influence.
In the present decision, the BGH states that a contractual provision excluding the liability of contractors for certain defects is often not effective. The judges emphasize that such clauses may violate the requirement for transparency and are therefore void.
This strengthens the position of developers, who must not be left alone in case of defects.
The case that led to this decision involved a construction company that operated despite poor materials and inadequate execution. The Federal Court made it clear that contractors are obligated to take necessary measures for quality control and assurance. This stance has far-reaching implications for the industry, as it will influence the market for construction services. This will encourage companies to more frequently engage with the conditions and requirements of their contracts in order to detect potential defects at an early stage.
Experts see this ruling as a clear indication that the courts will pursue a strict line when it comes to contractual breaches in construction. It is expected that this will lead to increased awareness of the quality of construction work. The decision marks another step in the legal confrontation regarding responsibility and liability in the construction sector.
In summary, the Federal Court has established clear guidelines for the liability of contractors with its decision.These guidelines could not only influence current practices in construction but also significantly shape future contract negotiations and insurance issues in this field.
Author: Anita Faake, Friday, September 13, 2024
