Work contract: Is a penalty clause mandatory?

Hello, we are close to finalizing our contract for work according to the Building Code for the construction of a single-family house with DEURA (see the related topic here in the forum). According to their regulations, DEURA is liable for damages proven to have resulted from delays (e.g. interest costs, rent, canceled move etc.).

My construction supervisor would like to include a penalty clause according to which the company pays a certain amount per week of construction delay regardless of fault. The company rejects such a clause and refers to their contract (see above).

Our problem is that we do not live in rented accommodation and will not have any additional financing costs. A construction schedule will be contractually agreed upon. The only damage I currently see if we cannot move in as planned is the cost of travel for our daughter's school commute. She is to be enrolled near the construction area to avoid changing classes. For this, we have to drive her about 25 km each way every day. This would be the damage starting from the first day after the agreed completion date.

This damage is not very large, so it is hardly suitable as real leverage.

What would you recommend? On the one hand, I have little fear that there will be a construction delay because first, 8 months are planned and according to previous experience DEURA does not fall behind schedule, on the other hand, the existing regulations might be sufficient.

Is a solution like the above (penalty clause) common or should I not insist on it?

Hello "Bulla",

I'm sorry - even though I have gladly answered one or two questions for you - but this question

...Diese soll gleich in der Nähe des Baugebietes eingeschult werden, um einen Klassenwechsel zu vermeiden. Dazu müssen wir sie jeden Tag ca. 25km hin und 25 km zurück fahren. Das wäre dann der Schaden, beginnend ab dem ersten Tag nach vereinbartem Baufertigstellungstermin. Dieser Schaden ist ja nicht sehr groß, daher kaum als echtes Druckmittel geeignet.

...is petty; my personal opinion.

I think it is time to consider the provider/construction supervisor/developer you have selected here in the forum - after reviewing all the pros and cons - also as a partner!

Kind regards

A fault-independent contractual penalty will not be implemented, because that would mean that as the client I throw as many obstacles as possible in the contractor's way, and if the contractor then does not finish, he has to pay. Only a madman would sign that. Only if the contractor is responsible can he be held liable by means of a contractual penalty.

So you should definitely insist on a completion date. With the current good order situation, as Deura always tells us, many things are being delayed. We signed last October, unfortunately without a completion date, construction started in April. Now it even looks like February might be tight!!