REALWorld Law



Does the law state what has to be achieved before 'completion' of the building works can be certified and, if so, can this be overridden by specific terms in the contract? Who would certify completion of building works carried out in accordance with a construction contract?



The law does not specify when completion under a construction contract is achieved; this depends on the contractual agreement between the parties. The civil law term which indicates that building works are completed in accordance with the contractual agreement is 'acceptance'. Acceptance is a statement by the principal to the contractor that the contractor has substantially performed the work contracted for in compliance with the construction contract. A work shall also be considered as accepted if the contractor has set the principal a reasonable deadline for acceptance after completion of the work and the principal has not refused acceptance within this period, stating at least one defect (so called 'fictitious acceptance'). The principal must reserve the right to assert claims for damages at the time of the acceptance unless otherwise agreed in the construction contract.

Under the Contracting rules for the Construction Contract Procedures Part B (VOB/B) the principal is obliged to accept the work if after completion the contractor demands that it is accepted. The principal can deny acceptance where there are material defects until they are remedied.

The VOB/B provides for three types of acceptance:

  • The acceptance may take place formally by the preparation of an acceptance report. Generally such reports contain a schedule of all defects, the scope of the acceptance, a declaration as to whether claims for damages are reserved and as to the commencement of the warranty period. In view of the duty of verification, in the event of a dispute, formal acceptance should be effected in all projects, not only those which are complex.
  • Section 12 para. no. 1 of the VOB/B provides for what is known as a 'fictitious acceptance'. The work of the contractor is deemed to be accepted if neither party has demanded acceptance of the work within a period of 12 working days following written notification by the principal. A fictitious acceptance still requires that the work is free from substantial defects and is in compliance with the contract. Due to the fact that an oversight by the principal may lead to such acceptance, it may be advisable to exclude the possibility of fictitious acceptance from the construction contract. 
  • Finally, if neither party has demanded acceptance and the principal has started to use the works or part of them the VOB/B provides for acceptance by estoppel. The use of parts of the works in order to continue other aspects of the construction project is not deemed to be acceptance. This implied acceptance also presupposes that the work is free from major defects and in compliance with the contract. It is excluded in most construction contracts.

In contrast to acceptance under civil law, public law provides that the completion of a building in accordance with the building permit must, in principle, be certified and submitted to the competent building authority by the principal or the construction manager (Bauleiter).