Cover your back

摘要

In Principle, German Building Contract law is based on a simple concept: a contractor undertakes to construct a building and in turn, the employer undertakes to pay the contractor for the work done. However, as opposed to many other types of contract provided for in the German civil code (BGB), the employer's obligation to pay does not automatically arise when the contractor has completed the job. The employer must also be satisfied that the building has been constructed in accordance with the contract. If this is not the case, because of defects for example, the contractor cannot demand remuneration for the labour. The contractor does of course have the option of taking the employer to court in order to prove his case, but this is often a cumbersome process. This means the contractor is obliged to work in advance of payment as well as bearing the risk of insolvency on the part of the employer.