New Case Law: If changes to the scope of work or increases in quantities occur during contract execution, and the contracting parties have entered into a VOB contract, the following principle previously applied: “A good price remains a good price; a bad price remains a bad price.” In plain language: Even for a mandated contract amendment or for increases in quantities for individual line items, the price for these services must be calculated based on the pricing principles of the main bid. If these are favorable, the price in the amendment remains favorable as well. If the initial prices are poor, the contractor may have to cover the difference. This principle has now been “overturned” by case law.
The Federal Court of Justice (BGH) had to rule on the following case:
In a VOB unit-price contract for the performance of facade work, the “facade insulation” item resulted in additional quantities of well over ten percent. In its final invoice, the contractor also charged the “very favorable” contractually agreed unit price and invoked § 2(3)(2) VOB/B, according to which the contractual unit price also applies to the additional quantities. Only if savings can be identified or if the contractor can prove additional costs (for example, higher purchase prices for materials or higher labor costs) does this contractual base price change. Since neither savings nor additional costs were incurred, the contractual price therefore applies.
Is the contractor correct?
The Decision In its judgment of November 21, 2019 (Baurechts-Report 2020, p. 1), the Federal Court of Justice (BGH) stated the following:
1. The right to establish a new price is contingent only on the quantity performed exceeding the quantity specified in the contract by more than 10% and one party demanding that a new price be agreed upon.
2. If the contracting parties cannot agree on the new price, the new price for the additional quantity is determined “based on the actual costs incurred plus reasonable surcharges.”
Practical Notes
1. The VOB principle “A good price remains a good price; a bad price remains a bad price” is therefore no longer valid.
2. This principle naturally applies not only when the contractor has a “good” unit price, but also, for example, when the contractor has miscalculated the contract price to his disadvantage. He may now demand a reasonable price for the additional quantity, i.e., calculate it based on “actual costs incurred.”
3. There have since been additional court rulings stating that the pricing principles used to determine the previous contract price are no longer decisive for calculating the price of additional services and contract amendments. Rather, the new price is also based on the “actual costs incurred” (see Higher Regional Court of Brandenburg, April 22, 2020, Baurechts-Report 2020, p. 22).
