Cost Plus Construction Agreement Template for Germany

A Cost Plus Construction Agreement is a contract where you reimburse your contractor for all actual project costs plus an agreed fee or percentage. In Germany, this contract type is governed by the German Civil Code (BGB) sections 631-651 and VOB/B construction contract terms, making it a legally sound option for construction projects with uncertain scope or complex requirements.

When do you need this document?

You need this agreement when undertaking construction projects where the final costs cannot be accurately determined upfront. This is common in renovation projects of historic buildings, emergency repairs, or innovative construction where specifications may evolve during execution. The agreement is also valuable when you want to maintain greater control over material selection and subcontractor choice while ensuring transparency in cost allocation. It's particularly useful for projects requiring specialized expertise where the contractor's knowledge is essential for decision-making throughout the construction process.

Key legal considerations

Under German law, cost plus agreements require detailed cost documentation and verification procedures to prevent disputes. You must establish clear definitions of what constitutes reimbursable costs, including materials, labor, equipment, and overhead expenses. The agreement should specify the contractor's fee structure, whether as a fixed amount or percentage of costs, and include provisions for cost auditing rights. Payment terms must comply with German construction law requirements, including progress payment schedules and retention provisions. Quality standards and acceptance procedures must align with VOB/B requirements, and you should include specific provisions for handling cost overruns and scope changes during construction.

Legal requirements in Germany

German construction law requires compliance with specific regulations including the new construction contract provisions (sections 650a-650v BGB) introduced in 2018. Your agreement must include proper documentation requirements for cost verification and progress reporting. If architectural or engineering services are included, fees must comply with HOAI (Fee Regulation for Architects and Engineers) requirements. The contract must specify defect liability periods according to BGB provisions and include appropriate insurance requirements for construction risks. You must also ensure compliance with German building codes and safety regulations, and include provisions for technical supervision as required by state building laws. Payment terms should align with German commercial law, including proper invoicing procedures and dispute resolution mechanisms under German jurisdiction.