Executing construction projects in Germany as a Danish entity, you will experience notable differences in culture and regulatory framework and significant differences in construction law and practice.
The differences mentioned above may have a crucial effect on the success of your project and, in particular, on how any agreement is enforced.
The contractor’s initial calculation needs to be correct
On one point, in particular, Danish contractors should consider a significant difference, which is variations.
Where the starting point under Danish law is that the contractor sets the price, German law relies on the “urkalkulation”, meaning the contractors initial calculation. Accordingly, if the contractor has gone in with a (too) low price this is, this same price is what the contractor will receive for variations. This also applies if this price is below the market rate and the contractor lose money.
Be careful when relying on the same terms
Under German law, a contract may be considered standard if the exact wording has been reused just once. The effect of a standard provision is an increased risk that “standard” contractual terms deviating from default law and common practice will be considered invalid or construed narrowly. Thus, be very mindful when relying on standard terms in your contracting.
Liquidated damages are hard to agree on but easy to enforce
The rules on liquidated damages vary between jurisdictions, and such terms generally need to be “localised”.
In Germany, there are strict requirements for agreeing on liquidated damages, including a requirement to cap liquidated damages. On the other hand, Danish entities may be surprised that the notice requirements for enforcing validly agreed liquidated damages are much less strict as these may be notified at handover (in the handover protocol). Thus, you cannot expect no liquidated damages to be applied simply because such has not been notified.