If an architect knows that a contractual penalty was agreed in the building contract, he has to instruct his client about its retention at the time of acceptance.
GRP Rainer Lawyers and Tax Advisors, Cologne, Berlin, Bonn, DГјsseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Stuttgart, Bremen, Nuremberg and London explains: The Bremen Higher Regional Court ruled in its decision dated 6 December 2012 (Ref. no.: 3 U 16/11) that it may number among an architectвЂ™s responsibilities to inform his client that they have to reserve a contractual penalty provided for in the contract with the builder at the moment of formal acceptance of construction work in order to be able to ultimately enforce this.
In the present case, the architect who was lately engaged had signed an architectвЂ™s agreement with the claimant, in which the supervision and monitoring of the contractual object were also agreed upon. The claimant thereafter concluded a construction law contract with a builder, which appeared to set a contractual penalty for the eventuality of the timeframes as laid out in the contract being exceeded. The construction was significantly delayed and the architect also apparently informed the builder about the deviation from the timeframes contractually agreed upon, as well as the impending contractual penalty.
After concluding formal acceptance, seemingly without having been instructed about the right to withhold the contractual penalty, the clientвЂ™s claim laid against the builder. The client subsequently held the architect liable for this. The Court agreed with the claimantвЂ™s point of view that the architect should have instructed his client that the final acceptance of construction work would have to be subject to withholding of a contractual penalty.
The responsibilities of an architect include informing the clients in advance that at the moment of formal acceptance the withholding of a contractual penalty has to be declared to the construction company, in order to avoid omitting this unintentionally. The case may only be different if the client already has sufficient experience with these issues, or if a consultation to this effect is clearly being carried out by another party.
An architect is faced with many responsibilities with regard to all obvious legal matters. It would be best for architects to consult a lawyer in order to avoid infringing responsibilities.
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