Is the price increase for the general contractor after signing due to raw material shortages lawful?

You brought up the industry, didn't you? And I claim, yes - the house construction industry works differently. You can't compare the VW diesel scandal with the case of additional costs in house construction. There was a whistleblower who went to the mass media, and the target group of the scandal was much larger. No one cares about a builder who had to pay 5,000 EUR more on a project costing 350,000 EUR.

Believe me, if it’s a major general contractor (GC) building 10 houses a month and then has problems with 10 out of 50 clients, he simply accepts the lower margin... Everything is miscalculated anyway, as long as the annual contribution margin fits, it’s perfectly fine. He adds the amounts to the current/upcoming offers (after all, construction will continue anyway).

For the GC, it is much less stressful just to build the house for a lower margin than to deal with the stress afterwards!

You can tell you’re not from the construction industry. What do you think how common it is for a company to suddenly stop showing up on site overnight? This isn’t a children’s birthday party or a competition to see who ends up with the bigger one. The work is simply stopped and continued on the site where there is more to be earned. There is no long discussion, just action – the subcontractor against the GC and the GC against the client.

They are often not checked whether they are justified or correct in amount. Next lesson learned by the client.

Even if an outside craftsman could do it for half the price, they are usually not available on short notice. So there would be a delay for which the client is responsible. In addition, you have a weak point regarding liability risk. What else does the client have to do but accept the overpriced offer from the general contractor? Take it or leave it.

You can tell that you’re not from the construction industry. What do you actually think about how commonplace it is for a company to stop showing up on the construction site overnight? This is not a kids’ birthday party or a competition over who has the bigger one in the end. They simply stop working and carry on at the site where there is more to earn. There’s no long discussion, just action – the subcontractor towards the general contractor, and the general contractor towards the client.

As I said... behind the scenes there are contracts with fixed price guarantees – with guaranteed construction time, etc. (at least most of the time).

A general contractor cannot just say, "I’m not coming anymore starting today and will let the construction stand still for a year"? That’s complete nonsense... Nobody does that either. It’s completely clear that due to the current phase there are significantly more problems, also regarding supply chains or similar. But that still doesn’t change the principle.

I won’t name any specific prefabricated house providers, but there are certainly some providers where I could actually imagine a lot of "bad things". Therefore, I always stand by my statement: Keep your eyes open when choosing the general contractor :)

If you were to take legal action against the general contractor over €10,000 that you wouldn’t want to pay, then you would win. That’s simply the statement.

Due to the construction boom, even the smallest construction companies won’t go bankrupt because the next projects are already planned and order books are full until mid-2022.

Then perhaps the construction might stop for a while because no materials are available – completely clear, that can happen – but it still has nothing to do with the fundamental question.

Here everything again escalates to the absolute extreme :D Nobody wants their construction to be at a standstill or for the project to deteriorate. That only happens when things really get very, very bad.

However, I would never simply pay €5k because one thinks: "Oh, the general contractor can’t do anything about it either – I’ll just pay, surely he’ll thank me." In my opinion, that's just stupid :D

The only discussion was about not naively just grabbing the pen and signing everything because you think you have no other choice... That simply is not correct.

Honestly: I don’t sign a contract – checked 100 times, taken out tricky clauses and thoroughly gone through it with the general contractor – and if such an incident actually happens later, which is contractually regulated, then just say: "Oh, screw it, I’ll take half"?

The practice is different. Have you contractually defined deadlines for the individual construction phases? Sure, if your fixed price guarantee has no time limit, then it applies, but normally the general contractor only owes completion by date x. Before that, you can't sue. Since the deadlines are usually calculated very generously for the general contractor, you often (not always, but often) run out of the interest-free provision period. That means every month longer without construction progress costs you a few hundred euros. If it comes to a legal case, it will be delayed until it can’t be delayed any longer. Deadlines are missed, then construction continues briefly to show that it can continue, only to pause again afterwards. In the meantime, the general contractor finds a subcontractor who will do it at the necessary price, but of course the quality will be a lottery. etc. pp. Even if you win. The small one goes bankrupt and starts anew. The big one sends you a Romanian crew that finishes everything within a few weeks, shortly before the completion deadline (the defect correction period always goes separately). You practically have no chance to come out unscathed. It would be better to accommodate, on the condition that no further additional claims are made and rapid construction progress is guaranteed. The current market situation makes this possible. In the future, I would only work with individual contracts or exit clauses. You never know what kind of general contractor you’ll get.

A general contractor can’t just say, I won’t show up anymore starting today and leave the construction site standing for a year? That’s total nonsense... Nobody does that, right?

Yes, they do. For example, I have been supervising a developer project for 1.5 years now. Both the shell builder and the landscaping contractor simply stopped coming. We are talking about a project with nearly 300 apartments. Meanwhile, there is a delay of almost a year.
That’s actually how life on construction sites is. Even on large sites.

If you were to take legal action against the general contractor over €10,000 that you didn’t want to pay, you would win. That’s simply the case.

Nobody disputes that. But what do you get out of it? The judgment comes in 2023, next instance in 2024. Are you waiting for the end of a process?

Due to the construction boom, even the smallest construction companies won't go bankrupt, because the next projects are already planned and the order books are full until mid-2022.

No. That’s not true. Especially the small providers have problems. They are now selling their service or the house and only stocking up with craftsmen and materials in 2022. Until then, their costs have run away. That is also normal and has been the case for a few years now.

Honestly: I don’t sign a contract—checked 100 times, included tricky clauses, and thoroughly worked it through with the general contractor—and then if such an incident actually occurs later, which is contractually regulated, just say: Oh, screw it, I’ll take half the responsibility?

No, then you’re the tough guy telling your family “I’m right—you just have to wait longer for the new house. We can handle the double burden of rent and interest on the loan. Also the move to the vacation apartment, since we’ve terminated/sold our current house/apartment.” Yeah, sure.