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Building contractor in default: claim for damages expires in three years! - BGH, judgement from 19.05.2022 - VII ZR 149/21 BGB Sections 195, 199 (1), Section 280 (1), (2), Section 286

21. September 2022

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Facts of the case: A building contractor started building a detached house in June 2008. The construction period is to be three months. This deadline is to be honoured with a contractual penalty of 45 euros/day, up to a maximum of 5% of the lump sum price.

A dispute arises about the ‘correctness’ of the service. The client refused to make instalment payments. After the contractor stopped the work, the client set a deadline for completion by 5 September 2008, whereupon the contractor failed to act and sued for payment on account. His claim was dismissed because the building was defective. The client then cancelled the contract in 2013 and moved into the house two years later after partial demolition and reconstruction. He only filed a lawsuit in March 2017, claiming damages for the costs of storing the kitchen, interest on provision and loss of use in the amount of approx. He is also seeking a contractual penalty of approx. 8,000 euros. The OLG dismissed the claim with reference to the statute of limitations.

Reason

The BGH shares the opinion of the OLG: On the merits, the client has a claim for damages pursuant to Sections 280, 286 (1) BGB against the contractor because the contractor was in default due to the house not being completed on time. This claim for damages is subject to the regular limitation period of three years. The period begins at the end of the year in which the claim becomes due and the creditor became aware of the facts giving rise to the claim or should have become aware of them without gross negligence.

The contractor fell behind schedule in September 2008, of which the client was aware. It is irrelevant whether and to what extent the client was aware of the defects, as it is sufficient that he was aware of the delayed completion and the resulting damage. The limitation period for the claim for damages pursuant to § 280 (1) and (2), § 286 (1) BGB also covers subsequently occurring consequences of damage that were foreseeable as possible at the time the claim arose (storage of the kitchen, the costs of which have increased on a monthly basis). The limitation period begins uniformly for the entire damage as soon as the first loss of assets has occurred, the so-called principle of unity of damage. In order to suspend the limitation period for damages arising in the future, the client would have had to bring an action for a declaratory judgement. The contractual penalty is also time-barred. Translated with www.DeepL.com/Translator (free version)

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