Hello,
how should it be assessed if a fixed price applies under the condition that "no direct or indirect delays to the start of construction occur due to Corona" – and the start of construction is stated in the contract as merely "planned"?
Thank you in advance for any experiences and expert opinions on this.
how should it be assessed if a fixed price applies under the condition that "no direct or indirect delays to the start of construction occur due to Corona" – and the start of construction is stated in the contract as merely "planned"?
Thank you in advance for any experiences and expert opinions on this.
konibar schrieb:
what does the fine print in the contract appendix say about this? What do you mean by the fine print?
There are several sections:
"Due to the COVID-19 pandemic, disruptions in performance, especially delays during the construction period, cannot be ruled out. Neither the client nor the contractor can assess at the time of contract signing the direct effects (e.g., illness-related absence of the contractor’s and/or subcontractors' and suppliers' personnel, absence of workers caring for relatives of any generation, quarantine measures, etc.) or the indirect consequences (restrictions on travel and/or freedom of movement, curfews, border closures, etc.) and potentially resulting subsequent impacts of the COVID-19 crisis.
The parties therefore agree that any direct and/or indirect consequence of the COVID-19 crisis that directly or indirectly affects the performance capacity of either contracting party shall not be considered a breach of contract—especially not a delay.
Any circumstances of this kind will extend the construction period and shall not be regarded as the fault of the client or contractor."
"Due to ongoing supply shortages of various building materials, the following amendment to Section 3, Paragraph 2, Sentences 2–4 of the contract for work and services is agreed:
1. The agreed fixed price remains unchanged for contracts signed by ----- and construction starting no later than -----.
2. For construction starting within the period of ------ under the same contract, the offer price (= base price of the house plus additional services minus reductions) will increase by a flat 1%.
3. For construction starting from ------ under the same contract, the offer price (= base price of the house plus additional services minus reductions) will increase by a flat 2%.
4. For construction starting later, a price adjustment will be made as agreed in the contract for work and services."
Lois L. schrieb:
Any circumstances of this kind extend the construction period and are not considered the fault of either the client or the contractor. This does not take into account that the same type of circumstances can already delay the start of construction. Additionally, a corresponding extension of the price guarantee is missing.
However: where do you think the contractor is supposed to get the money from (print it themselves?), if they simply assume all the risks of price increases? They will have to factor that in beforehand!
The more firmly you want to guarantee your price, the more risk of cost increases the contractor has to account for. Therefore, your price will inevitably be higher the longer and more strictly you want the guarantee to apply.
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Warning: layman’s opinion!
If the contract is not filled out on both sides, I would say you can treat the page with the fixed-price guarantee as a scratch sheet. The wording about “directly” and “indirectly” is basically a loophole that allows everything to be dismissed.
On the other hand, they probably have to prove that connection. However, enforcing the fixed price is a different matter. Later on, you want to have your house completed, but the builder will only continue if you accept the price increase for XYZ (e.g., roof structure). Do you want to spend four years arguing until it is finally determined that they have to honor the fixed price?
If the contract is not filled out on both sides, I would say you can treat the page with the fixed-price guarantee as a scratch sheet. The wording about “directly” and “indirectly” is basically a loophole that allows everything to be dismissed.
On the other hand, they probably have to prove that connection. However, enforcing the fixed price is a different matter. Later on, you want to have your house completed, but the builder will only continue if you accept the price increase for XYZ (e.g., roof structure). Do you want to spend four years arguing until it is finally determined that they have to honor the fixed price?