The situation
An employer’s draft construction contract, uploaded
Your company, a façade contractor, has two draft contracts on the desk: an office tower in Frankfurt and a hospital extension in Gdańsk. Both are the employer’s standard forms. The bid team wants to know by Friday which clauses to push back on.
The commercial team reads the price. Counsel reads the rest: the retention, the performance and warranty security, the daily penalty and its cap. Each has to be checked against what the statute and the courts allow, and the answers differ between the two contracts.
What the research has to settle
The rules behind the answer
- German standard terms face a fairness review
- Clauses an employer uses for many contracts are standard terms and are reviewed for unreasonable disadvantage. Delay penalties without a reasonable overall cap, and retentions that cannot be replaced by a guarantee, are frequent subjects of that review in the case law.
- German case law caps delay penalties
- The Federal Court of Justice has treated an overall delay-penalty cap above 5% of the contract price as invalid in standard terms. Daily rates are reviewed too, and an invalid clause generally falls away entirely rather than being cut down.
- German contractors can demand payment security
- German law gives a contractor the right to demand security for the agreed payment. A clause excluding that right is ineffective.
- Polish courts can reduce a penalty
- Under the Polish Civil Code, a court can reduce a contractual penalty where the obligation was largely performed or the penalty is grossly excessive. The contract still decides when the penalty applies, so the trigger and the cap are worth negotiating.
How it runs in azta
From the question to the document
The question, as you would type it
Attached are two draft contracts: an office tower in Frankfurt (German law) and a hospital extension in Gdańsk (Polish law). We are the façade contractor. Which retention, security and delay-penalty clauses are likely invalid or open to reduction, and what should we propose instead?
You start with
An employer’s draft construction contract, uploaded
- 01
Upload both drafts
Add the two contracts and their general conditions. azta reads them and refers back to the clause behind each point.
File upload· Pro - 02
Research the limits on each clause
Ask what German and Polish law allows for retention, security and penalties. azta cites the civil codes and the rules on standard terms.
Cited research· Free - 03
Find the decisions on penalty caps
Ask for the court decisions on delay penalties and retention in standard construction terms. azta summarises the holdings and links each one.
Case-law search - 04
Draft the review
Ask for a review table by clause: risk, legal position and proposed wording. Refine it in Canvas and export to Word for the bid team.
Canvas · Ask azta· Pro You send
A clause review of retention, security and delay penalties with proposed changes
What you get
A clause review of retention, security and delay penalties with proposed changes
Contract review · draft
Frankfurt and Gdańsk drafts: security and penalty clauses
Frankfurt, clause 14 (delay penalty). The draft sets a daily penalty with an overall cap of 10% of the contract price. As a standard term, a cap at this level is open to challenge under the case law. We propose a cap of 5% and a daily rate in line with the decisions reviewed.
Frankfurt, clauses 18 and 22 (security). Clause 18 retains 5% of the final account for the warranty period with no right to replace it with a guarantee; we propose adding that right. Clause 22 excludes our statutory right to demand payment security. That exclusion is ineffective, and we will say so in the response.
Gdańsk, clause 9 (delay penalty). A Polish court can reduce an excessive penalty, but the draft sets no cap at all. We propose an overall cap and a penalty calculated on the value of the delayed part of the works rather than the whole contract price.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
14 minutes a month
At €120 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 72
- Capacity at your rate
- €8,640
- More construction contract reviews a quarter
- 3
- Return on Pro
- 26.7×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
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- Gesetze im Internet
- Rechtsprechung im Internet
- Dziennik Ustaw
- SAOS
What stays with you
- The commercial judgement on which points to concede.
- Reading the decisions behind each proposed change.
- The negotiation with the employer.
Frequently asked questions
- Does azta hold standard forms such as the VOB/B?
- No. Standard forms are not legislation. Upload the form you are working with and azta reads it alongside the law and the decisions on similar clauses.
- Does it mark up the employer’s file directly?
- It drafts the review and proposed wording in Canvas, which you export to Word. You carry the changes into the employer’s draft.
- Is the uploaded contract kept private?
- Client documents are never used for training on any plan, and they stay in the EU/EEA.
