Turnkey fixed price during Corona or cost increase?

I find the situation really difficult right now. Imagine the GU goes bankrupt because of the price increase, for which he bears the full risk.

The risk exists, but let's be honest. How many houses does a GU build simultaneously? How much would he max lose? I think that is compensable, and if he makes losses for a year, he won't go bankrupt immediately. There have been many good years recently where a lot of money was made. Maybe he just can't park the newest Porsche or G-Class in the yard for a year, but he'll survive with a BMW or Audi ;)...

Fixed price is fixed price. The risk must be borne 100% by the general contractor. In such a construction project, a general contractor has roughly a 10% margin, so on average let's say 50,000 euros. He can still compensate for that, but it’s not pleasant!

I don’t want to jinx it, but if now all customers insist on adhering to the fixed prices in the course of this "raw material crisis," construction companies will fall like flies by the dozen. If the client’s financial cushion isn’t really very big, which I simply assume for 90% of today’s clients, there will be no one left to finish the house. This scenario is something one should at least consider quietly before running to the lawyer with a knife between the teeth.

I don't want to jinx it, but if now all customers insist on adherence to the fixed prices due to this "raw material crisis," contractors will drop like flies one after another. If the client's cushion is not really very large, which I simply assume is the case for 90% of today's clients, there will be no one left to complete the house. One should at least give this scenario some thought in a quiet moment before running to the lawyer with a knife between the teeth.

Why a lawyer? You always pay risks with the general contractor. Now one occurs and the GC loses margin. Where is the problem? Besides, the GC either secures sufficient material in advance or has contracts with his subs.

I can only write from my experience, and it is not good. We had a contract with a general contractor (GU) with a "guaranteed fixed lump sum price." Theoretically, that means three layers of security: guaranteed, lump sum, fixed price. But none of it helped. The GU stopped work in 2018 after we did not agree to his claims for additional charges and costs, and he saw his profit disappearing. We sued, there was a settlement stating the GU must continue building, but the GU sold his company. I have a paper saying the successor company owes me €130,000, which I can forget about since the successor company is a shell company. The house is still not finished, and the public prosecutor is investigating him. Get a performance bond before making the first payment to the GU; you are entitled to it. That way, you at least have something in hand.

I don't want to jinx it, but if now all customers insist on adhering to the fixed prices in the course of this "raw material crisis," construction companies will fall like flies by the dozen. If the builder's buffer isn't really very large, which I simply assume for 90% of today's builders, there will be no one left to complete the house. One should at least think about this scenario in a quiet moment before running to the lawyer with a knife between their teeth.

And if all construction companies simply raise their prices by 10% after the fact because of this "raw material crisis," private households will fall like flies by the dozen. Most finance quite tightly, and with additional costs of several tens of thousands of euros, it is simply not bearable. This is entrepreneurial risk. Good companies have appropriate contracts, reserves, and partners. Bad ones will go bankrupt, and new ones will come. That's how the world works. Why do I even sign such a piece of paper if it can simply roll its prices after the fact?

I'm curious to see when the Bundeskartellamt will take a look at this "crisis."