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=U4= Sec631 -- Section 631 Typical contractual duties in a contract to produce a work
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=S=> BGB 631. 1 By a contract to produce a work , a contractor is obliged to produce the promised work and the customer is obliged to pay the agreed remuneration .
=S=> BGB 631. 2 The subject matter of a contract to produce a work may be either the production or alteration of a thing or another result to be achieved by work or by a service .
=U4= Sec632 -- Section 632 Remuneration
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=S=> BGB 632. 1 Remuneration for work is deemed to be tacitly agreed if the production of the work , in the circumstances , is to be expected only in return for remuneration .
=S=> BGB 632. 2 If the amount of remuneration is not specified , then if a tariff exists , the tariff remuneration is deemed to be agreed ; if no tariff exists , the usual remuneration is deemed to be agreed .
=S=> BGB 632. 3 In case of doubt , remuneration is not to be paid for a cost estimate .
=U4= Sec632a -- Section 632a Part payments
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=S=> BGB 632a. 1 The contractor may demand a part payment from the customer for work carried out in accordance with the contract in the amount in which the customer has received an increased value by virtue of the work . The part payment may not be refused because of minor defects . Section 641 ( 3 ) applies with the necessary modifications . The work must be documented by a list which must facilitate a rapid , secure evaluation of the work . Sentences 1 to 4 also apply to required materials or building components that are supplied or specially prepared and made available if ownership of the materials or building components is transferred to the customer or an appropriate security is provided for this , at his option .
=S=> BGB 632a. 2 If the subject-matter of the contract is the construction or conversion of a house or comparable building and at the same time entails an obligation incumbent on the contractor to assign to the customer ownership of the plot of land or to establish or assign a hereditary building right , part payments may only be demanded insofar as they have been agreed in accordance with an ordinance based on Article 244 of the Introductory Act to the Civil Code .
=S=> BGB 632a. 3 If the customer is a consumer , and if the subject-matter of the contract is the construction or conversion of a house or comparable building , the customer must be given a security amounting to five percent of the remuneration claim on effecting the first part payment for the correct implementation of the work without major defects . If the remuneration claim increases by more than ten percent as a result of amendments to or supplements of the contract , the customer is to be given a further security of five percent of the additional remuneration claim on effecting the next part payment . At the request of the contractor , the security is to be provided by retention such that the customer retains the part payments up to the total amount of the security owed .
=S=> BGB 632a. 4 Securities in accordance with this provision may also be provided by means of a guarantee or other payment undertaking by a financial institution or credit insurer entitled to operate in the scope of application of this Code .
=U4= Sec633 -- Section 633 Material defects and legal defects
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=S=> BGB 633. 1 The contractor must procure the work for the customer free of material defects and legal defects .
=S=> BGB 633. 2 The work is free of material defects if it is of the agreed quality . To the extent that the quality has not been agreed , the work is free from material defects if it is suitable for the use envisaged in the contract , or else if it is suitable for the customary use and is of a quality that is customary in works of the same type and that the customer may expect in view of the type of work . It is equivalent to a material defect if the contractor produces a work that is different from the work ordered or too small an amount of the work .
=S=> BGB 633. 3 The work is free of legal defects if third parties , with regard to the work , either cannot assert any rights against the customer or can assert only such rights as are taken over under the contract .
=U4= Sec634 -- Section 634 Rights of the customer in the case of defects
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=S=> BGB 634 If the work is defective , the customer , if the requirements of the following provisions are met and to the extent not otherwise specified , may under section 635 , demand cure , under section 637 , remedy the defect himself and demand reimbursement for required expenses , under sections 636 , 323 and 326 ( 5 ) , withdraw from the contract or under section 638 , reduce payment , and under sections 636 , 280 , 281 , 283 and 311a , demand damages , or under section 284 , demand reimbursement of futile expenditure .
=U4= Sec634a -- Section 634a Limitation of claims for defects
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=S=> BGB 634a. 1 The claims cited in section 634 nos . 1 , 2 and 4 are statute-barred subject to no . 2 , in two years in the case of a work whose result consists in the manufacture , maintenance or alteration of a thing or in the rendering of planning or monitoring services for this purpose , in five years in the case of a building and in the case of a work whose result consists in the rendering of planning or monitoring services for this purpose , and apart from this , in the regular limitation period .
=S=> BGB 634a. 2 In the cases of subsection ( 1 ) nos . 1 and 2 , limitation begins on acceptance .
=S=> BGB 634a. 3 Notwithstanding subsection ( 1 ) nos . 1 and 2 , and subsection ( 2 ) , claims are statute-barred in the standard limitation period if the contractor fraudulently concealed the defect . However , in the case of subsection ( 1 ) no . 2 , claims are not statute-barred before the end of the period specified there .
=S=> BGB 634a. 4 The right of withdrawal referred to in section 634 is governed by section 218. Notwithstanding the ineffectiveness of withdrawal under section 218 ( 1 ) , the customer may refuse to pay the remuneration to the extent that he would be entitled to do so by reason of the withdrawal . If he uses this right , the contractor may withdraw from the contract .
=S=> BGB 634a. 5 Section 218 and subsection ( 4 ) sentence 2 above apply with the necessary modifications to the right to reduce the price specified in section 634.
=U4= Sec635 -- Section 635 Cure
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=S=> BGB 635. 1 If the customer demands cure , then the contractor may , at his option , remedy the defect or produce a new work .
=S=> BGB 635. 2 The contractor must bear the expenditure necessary for cure , including , without limitation , transport , workmen's travel , work and materials costs .
=S=> BGB 635. 3 The contractor may refuse cure , without prejudice to section 275 ( 2 ) and ( 3 ) , if it is only possible at disproportionate cost .
=S=> BGB 635. 4 If the contractor produces a new work , he may demand from the customer return of the defective work in accordance with sections 346 to 348.
=U4= Sec636 -- Section 636 Special provisions on withdrawal and damages
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=S=> BGB 636 Except in the cases of sections 281 ( 2 ) and 323 ( 2 ) , there is no need for a period to be set even if the contractor refuses cure under section 635 ( 3 ) or if cure has failed or cannot be reasonably expected of the customer .
=U4= Sec637 -- Section 637 Self-help
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=S=> BGB 637. 3 The customer may demand from the contractor advance payment of the expenses necessary to remedy the defect .
=U4= Sec638 -- Section 638 Reduction of price
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=S=> BGB 638. 1 Instead of withdrawal from the contract , the customer may reduce the remuneration by declaration to the contractor . The ground for exclusion under section 323 ( 5 ) sentence 2 does not apply .
=S=> BGB 638. 2 If the customer or the contractor consists of more than one person , reduction of price may be declared only by or to all of them .
=S=> BGB 638. 3 In the case of reduction of price , the payment is to be reduced in the proportion which , at the time when the contract was entered into , the value of the work in a state free of defects would have had to the actual value . To the extent necessary , the price reduction is to be established by appraisal .
=S=> BGB 638. 4 If the customer has paid more than the reduced remuneration , the contractor must reimburse the surplus . Section 346 ( 1 ) and section 347 ( 1 ) apply with the necessary modifications .
=U4= Sec639 -- Section 639 Exclusion of liability
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=S=> BGB 639 The contractor may not rely on an agreement by which the rights of the customer with regard to a defect are excluded or restricted , insofar as the contractor fraudulently concealed the defect or gave a guarantee for the quality of the work .
=U4= Sec640 -- Section 640 Acceptance
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=S=> BGB 640. 1 The customer is obliged to accept the work produced in conformity with the contract , except to the extent that , in view of the quality of the work , acceptance is excluded . Acceptance may not be refused by reason of trivial defects . It is equivalent to acceptance if the customer does not accept the work within a reasonable period of time specified for him by the contractor , although he is under a duty to do so .
=S=> BGB 640. 2 If the customer accepts a defective work under subsection ( 1 ) sentence 1 , even though he knows of the defect , he only has the rights designated in section 634 nos . 1 to 3 if he reserves his rights with regard to the defect when he accepts the work .
=U4= Sec641 -- Section 641 Due date of remuneration
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=S=> BGB 641. 1 The remuneration must be paid upon acceptance of the work . If the work is to be accepted in parts and the remuneration for the individual parts is specified , then the remuneration is to be paid for each part when it is accepted .
=S=> BGB 641. 2 The remuneration of the contractor for a work whose production the customer has promised to a third party is due at the latest to the extent that the customer has received from the third party his remuneration or parts of his remuneration for the production of the promised work , to the extent that the work of the customer has been accepted by the third party or is deemed to have been accepted , or to the extent that the contractor has unsuccessfully set the customer a suitable deadline for information on the circumstances referred to in Nos . 1 and 2. If the customer has given the third party security on account of possible defects of the work , sentence 1 applies only if the contractor gives the customer an appropriate security .
=S=> BGB 641. 3 If the customer may demand remedy of a defect , he may , after becoming due , refuse to pay a reasonable portion of the remuneration ; twice the costs necessary to remedy the defect are appropriate as a rule .
=S=> BGB 641. 4 If the remuneration is assessed in money , the customer must pay interest on it from the acceptance of the work on , except to the extent that remuneration is deferred .
=U4= Sec641a -- Section 641a repealed
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=U4= Sec642 -- Section 642 Collaboration by the customer
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=S=> BGB 642. 1 If , in the production of the work , an act by the customer is necessary , then the contractor may demand reasonable compensation if the customer , by failing to perform the act , is in default of acceptance .
=S=> BGB 642. 2 The amount of compensation is assessed on the one hand on the basis of the duration of the default and the amount of the agreed remuneration , and on the other hand on the basis of what expenses the contractor saves or what the contractor can earn by employing his working capacity elsewhere .
=U4= Sec643 -- Section 643 Termination for failure to collaborate
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=S=> BGB 643 In the case of section 642 , the contractor is entitled to give the customer a reasonable period of time for making up for the act to be performed by declaring that he will terminate the contract if the act is not undertaken by the end of the period of time . The contract is deemed to be cancelled if the act is not made up for by the end of the period of time .
=U4= Sec644 -- Section 644 Allocation of risk
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=S=> BGB 644. 1 The contractor bears the risk until acceptance of the work . If the customer is in default of acceptance , then the risk passes to him . The contractor is not liable for any accidental destruction or accidental deterioration of the materials supplied by the customer .
=S=> BGB 644. 2 If , at the demand of the customer , the contractor ships the work to a place other than the place of performance , then the provisions of section 447 governing purchase apply with the necessary modifications .
=U4= Sec645 -- Section 645 Responsibility of the customer
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=S=> BGB 645. 1 If the work , before acceptance , is destroyed or deteriorates or becomes impracticable as the result of a defect in the materials supplied by the customer or as the result of an instruction given by the customer for the carrying out of the work , without a circumstance for which the contractor is responsible contributing to this , then the contractor may demand a part of the remuneration that corresponds to the work performed and reimbursement of those expenses not included in the remuneration . The same applies if the contract is cancelled under section 643.
=S=> BGB 645. 2 A more extensive liability of the customer for fault is unaffected .
=U4= Sec646 -- Section 646 Completion in lieu of acceptance
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=S=> BGB 646 If acceptance is excluded due to the quality of the work , then , in the cases of sections 634a ( 2 ) and 641 , 644 and 645 , completion of the work takes the place of acceptance .
=U4= Sec647 -- Section 647 Security right of the contractor
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=S=> BGB 647 For his claims under the contract , the contractor has a security right over the movable things of the customer that he has produced or repaired if they have come into his possession during the production or for the purpose of repair .
=U4= Sec648 -- Section 648 Mortgage of a building contractor
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=S=> BGB 648. 1 The contractor for a building or an individual part of a building may demand , for satisfaction of his claims under the contract , that a mortgage over the building plot of the customer is granted . If the work is not yet completed , then he may demand that a mortgage is granted for a portion of the remuneration corresponding to the work performed and for expenses not included in the remuneration .
=S=> BGB 648. 2 The owner of a shipyard , for his claims in relation to the building or repair of a ship , may demand to be granted a ship mortgage over the ship under construction or ship of the customer ; subsection ( 1 ) sentence 2 applies with the necessary modifications . Section 647 does not apply .
=U4= Sec648a -- Section 648a Builder's security
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=S=> BGB 648a. 1 A contractor for a building , outdoor facilities or a part thereof may demand a security from the customer for the remuneration also agreed in additional commissions and not yet paid , including associated incidental claims , which are to be estimated at ten per cent of the remuneration claim to be secured . Sentence 1 also applies to the same degree to claims replacing the remuneration . The claim of the contractor for a security is not ruled out by the customer being able to demand fulfilment or having accepted the work . Claims with which the customer is able to offset against the contractors right to remuneration are disregarded when calculating the remuneration unless they are non-contentious or have been ascertained with the force of law . The security is to be deemed sufficient even if the provider of the security reserves the right to revoke his promise , in case of substantial deterioration of the financial circumstances of the customer , with effect for claims to remuneration for building work that the contractor has not yet performed when the declaration of revocation is received .
=S=> BGB 648a. 2 The security may also be provided by means of a guarantee or other promise of payment by a banking institution or credit insurer authorised to conduct business operations within the area of application of this Code . The banking institution or credit insurer may only make payments to the contractor to the extent that the customer recognises the claim of the contractor to remuneration or has been ordered by a provisionally enforceable judgment to pay the remuneration and the requirements are met under which execution of judgment may be commenced .
=S=> BGB 648a. 3 The contractor must pay to the customer the customary costs of provision of security up to a maximum amount of two per cent per year . This does not apply to the extent that the security must be maintained because of objections of the customer to the remuneration claim of the contractor and the objections turn out to be unfounded .
=S=> BGB 648a. 4 To the extent that the contractor has obtained a security for his claim to remuneration under subsections ( 1 ) and ( 2 ) , the claim to be granted a mortgage under section 648 ( 1 ) is excluded .
=S=> BGB 648a. 5 If the contractor has unsuccessfully set the customer a suitable deadline to provide the security in accordance with subsection ( 1 ) , the contractor may refuse to carry out the work or may terminate the contract . If he terminates the contract , the contractor is also entitled to claim the agreed remuneration ; he must however allow set-off of the expenses he saves as a result of cancelling the contract or acquires or wilfully fails to acquire from other use of his labour . There is a presumption that the contractor is accordingly entitled to five percent of the remuneration accounted for by the part of the work not yet provided .
=S=> BGB 648a. 6 The provisions of subsections ( 1 ) to ( 5 ) are not applicable if the customer is a legal person under public law or a special fund under public law with regard to the property of which insolvency proceedings are not permissible , or is a natural person and is having the construction work done to build or repair a one-family house with or without a self-contained apartment attached . Sentence 1 No . 2 does not apply if the construction project is looked after by a construction agent authorised to dispose of the financial resources of the customer .
=S=> BGB 648a. 7 Any agreement deviating from the provisions of subsections ( 1 ) to ( 5 ) above is ineffective .
=U4= Sec649 -- Section 649 Right of termination of the customer
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=S=> BGB 649 The customer may terminate the contract at any time up to completion of the work . If the customer terminates the contract , then the contractor is entitled to demand the agreed remuneration ; however , he must allow set-off of the expenses he saves as a result of cancelling the contract or acquires or wilfully fails to acquire from other use of his labour . There is a presumption that the contractor is accordingly entitled to five percent of the remuneration accounted for by the part of the work not yet provided .
=U4= Sec650 -- Section 650 Cost estimate
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=S=> BGB 650. 1 If the contract is based on a cost estimate without the contractor guaranteeing the accuracy of the estimate and if it turns out that the work cannot be carried out without substantially exceeding the estimate , then the contractor is only entitled , if the customer terminates the contract for this reason , to the claim specified in section 645 ( 1 ) .
=S=> BGB 650. 2 If such exceeding of the estimate is to be expected , then the contractor must notify the customer of this without undue delay .
=U4= Sec651 -- Section 651 Application of sale of goods law* )
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=S=> BGB 651 The provisions of sale of goods law are applicable to a contract dealing with the supply of movable things to be produced or manufactured . Section 442 ( 1 ) sentence 1 also applies to these contracts if the defect is caused by the material supplied by the customer . To the extent that the movable things to be produced or manufactured are not fungible things , sections 642 , 643 , 645 , 649 and 650 apply , subject to the proviso that the applicable point of time under sections 446 and 447 takes the place of acceptance .
=S=> BGB 651.* ) Official note : This provision serves to implement Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees ( OJ L 171 , p . 12 ) .
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