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Notice of defects and setting a deadline

from
Prof. Dr. jur. Wolfgang Weller
Lawyer
Specialist lawyer for construction and architectural law

Give me a call: 0261 - 404 99 26
E-Mail:

In the context of construction contracts, the contractor should take the client's notification of defects and the request for rectification, even if these are not worded in a technical manner and at first glance do not indicate any responsibility on the part of the contractor, very seriously.

If the deadlines have passed, it is solely within the client's discretion to decide whether to have the contractor rectify the defect or to commission a third party to rectify the defect at the contractor's expense.

An example case: The owner of a single-family house complains about "a dark, probably damp spot" below the balcony in the black-contrasting, otherwise yellow exterior plaster. The roofer sealed the balcony, the plumber installed a shower inside in this area, and the exterior plasterer finally chose the colors and applied them. All the tradespeople were informed about the spot and given a period of three weeks to the end of the month to rectify the situation. At first, no one feels responsible. After the deadline has passed, the plumber wants to check the drainage pipe to make sure it is properly routed and not obstructed. The building owner refuses. The third-party contractor subsequently commissioned by the client removes the shower and detects and repairs a leak in the drainage pipe that has led to water entering the exterior masonry and ultimately to the moisture stain. The owner demands reimbursement of the costs of substitute performance. The plumber refuses because he did not receive a proper notice of defect and, in any case, was offered the opportunity to rectify the defect.

In a recent decision (judgment of February 27, 2003, VII ZR 338/01), the German Federal Court of Justice again took a clear position on the issues raised above.

The German Federal Court of Justice expressly confirmed its previous ruling, according to which it is sufficient for a proper notification of defects to notify the defects that are visually perceptible to the layman. The client only has to describe the symptoms (therefore called the "symptom theory"). He is not obliged to clarify the causes of the defect and the responsibility of those involved in the construction before the proceedings. It is then up to the expert contractors to assess their liability. The notice of defect must clearly state, in addition to the description, that the client expects the defect to be remedied. Finally, a deadline should be set for the rectification of defects. This deadline must be reasonable. If the deadline is too short in individual cases, the deadline is nevertheless not ineffective, but sets an appropriate deadline in motion.

Once the deadline has expired, the contractor is in default and the building owner is entitled to have the defects remedied by a third-party company. Whether he is nevertheless still obliged to allow the entrepreneur to take action if the latter decides otherwise after the deadline has expired was disputed in individual cases. The Federal Court of Justice has now provided clarity here and established that the entrepreneur is prevented from making improvements without the client's consent after the deadline has expired. The Federal Court of Justice justifies this with the justified interest of the building owner in deciding for himself after the deadline has expired which warranty rights (rectification or reimbursement of costs) he now wants to assert against the contractor. This does not unduly disadvantage the entrepreneur, because the situation is already based on a double breach of duty: the entrepreneur has initially performed the service owed in breach of contract and then, despite being requested to do so, has not carried out the owed rectification.

The above principles apply regardless of whether the parties have made the VOB/B the subject of the contract and regardless of whether the contract was concluded before or after December 31, 2001 and thus the old or new law of obligations applies. The expiry of the deadline thus forms the deadline, even without the threat of refusal, up to which the entrepreneur may carry out improvements without the consent of the client.

The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.