Termination of a construction contract (Kündigung): VOB/B and BGB at a glance

Two routes: without reason and for good cause

Free termination by the client. Under § 648 BGB and § 8 para. 1 no. 1 VOB/B, it can terminate the contract at any time until the work is completed. The contractor keeps the agreed remuneration, but must allow credit for what it saves as a result of the termination or earns through other use or wilfully fails to earn. Under § 648 BGB, it is presumed that the contractor is entitled to 5 per cent of the remuneration for the part not yet performed.

Termination for good cause. § 648a BGB allows both sides to terminate without observing a notice period if continuing until completion cannot reasonably be expected of them (para. 1). A partial termination is possible if it concerns a separable part (para. 2).

The client’s grounds for termination under VOB/B

Besides free termination, § 8 VOB/B names further cases:

• Insolvency of the contractor (§ 8 para. 2): on cessation of payments, an insolvency petition or the opening of proceedings. Settlement of the work carried out under § 6 para. 5; damages for non-performance of the remainder.
• Defects and default (§ 8 para. 3): The client can terminate if in the cases of § 4 para. 7 and para. 8 no. 1 and of § 5 para. 4 the deadline set has expired without result. So the prerequisite is a reasonable deadline with a threat of termination.
• Anti-competitive agreements and procurement violations (§ 8 para. 4): only in special cases, with a short cut-off period of 12 calendar days after learning of the ground for termination.

After termination under para. 3, the client may have the part not yet completed carried out by a third party at the contractor’s expense. It can also waive further execution and demand damages for non-performance if the execution is no longer of interest to it. It may use equipment, scaffolding and materials against reasonable remuneration and must, within 12 working days (Werktage) after settling with the third party, send a statement of the additional costs.

Termination by the contractor under § 9 VOB/B

The contractor can terminate:

1. if the client omits an act incumbent on it and thereby prevents the contractor from carrying out the work (default of acceptance),
2. if the client fails to make a due payment or otherwise falls into default as a debtor.

The termination must be declared in writing and is only permissible once the contractor has unsuccessfully set the client a reasonable deadline for performance of the contract and has declared that it will terminate the contract if the deadline expires without result (§ 9 para. 2). The work carried out so far is settled at the contract prices, plus reasonable compensation under § 642 BGB (para. 3). Further claims remain unaffected.

An alternative where payment or security is not forthcoming is § 650f BGB: after setting a deadline, you can refuse to perform or terminate.

Termination because of an interruption

If an interruption lasts longer than 3 months, either party can terminate the contract in writing once this time has passed (§ 6 para. 7 VOB/B). Details at Behinderungsanzeige.

Written form and delivery

Termination of a construction contract requires written form (§ 650h BGB). In practice, this means:

• Signed by hand and received as the original. A simple e-mail is generally not enough.
• Proof of receipt: messenger with record, registered letter by hand delivery, or personal handover with acknowledgement of receipt.
• Clear declaration: “I terminate the contract of … for good cause” (“Ich kündige den Vertrag vom … aus wichtigem Grund”), with the reason and, if necessary, an alternative termination without reason.

After termination: establish the state of work

Under § 648a para. 4 BGB, either contracting party can demand that the other cooperate in a joint determination of the state of work. If it refuses to cooperate or does not attend an agreed or reasonably set appointment, it bears the burden of proof for the state of work at the time of termination. This does not apply if it stays away for reasons for which it is not responsible and notified without delay.

In the case of termination for good cause, the contractor is only entitled to claim the remuneration for the part performed up to termination (para. 5). The right to claim damages is not excluded by the termination (para. 6).

What to do before terminating

1. Check the contract: VOB/B agreed? Which clauses govern termination and deadlines?
2. Prove the grounds: deadlines set, notices of defects, payment reminders, photos, records.
3. Deadline with threat of termination formally correct (mandatory under VOB/B).
4. Termination in writing with proof of receipt.
5. Establish the state of work jointly: propose an appointment and document it.
6. Settle the account: measurement (Aufmaß), contract prices, savings, compensation.
7. Take legal advice. A defective termination can be treated as a free termination or trigger damages.

An unjustified termination for good cause is often interpreted as a free termination: the contractor then keeps the remuneration less savings. Anyone who wants to be safe also terminates, in the alternative, without reason. That is a question of the individual case.

Frequently asked questions

Sources and status

• § 6 para. 7, § 8 paras. 1 to 6 and § 9 VOB/B – termination (2016 version, checked against the statutory text in the BauWalker corpus)
• § 648 BGB – customer’s right of termination
• § 648a BGB – termination for good cause
• § 650h BGB – written form of termination
• Stand: 19.10.2026. The delimitation of good cause depends heavily on the individual case. A termination should be checked legally.
• Quotations of statutory text are given in translation; the German wording is authoritative.