Hourly-rate construction work in Germany: who has to prove that too many hours were billed?

The dispute over drying a flooded house: what did the OLG Brandenburg decide?

The Higher Regional Court of Brandenburg awarded a company EUR 15,862.33 plus interest at 5 percentage points above the base rate from 17 February 2021, reducing the sum awarded at first instance (EUR 21,079.16), and rejected in full the client’s set-off based on the allegation of uneconomic performance (judgment of 11 June 2026, 10 U 5/26). The client, who accused the contractor of inflated and unnecessary hours, lost that argument because he did not prove the facts pointing to uneconomic performance.

The background is typical for water damage. On 25 May 2020 the client’s house was flooded. A company specialising in repairing fire and water damage set up drying equipment in May and, on the basis of an offer of 27 July 2020 that the client had partly confirmed, carried out drying, decontamination, protective and demolition work. Most items were billed at hourly rates with lump sums for materials. The final invoice (Schlussrechnung) was dated 15 September 2020, and on 2 October 2020 the client terminated the contract. He had paid EUR 15,310.20 and disputed the rest.

The Regional Court (Landgericht) of Frankfurt (Oder) first dismissed the claim by default judgment of 18 November 2022 and then, after the contractor’s objection, ordered the client by judgment of 25 August 2023 to pay EUR 21,079.16 plus EUR 1,088.60 in pre-litigation lawyer’s fees. On appeal the client argued that drying the cavities of the plasterboard walls had been pointless because the boards had to be removed anyway, that decontamination without a prior mould survey made no sense, that the workers took an hour’s breakfast break every day, and that restoring his house would cost at least EUR 590,854.97 net. He claimed release from EUR 26,507.49 gross and additionally set off damages for damaged ceiling beams, laminate flooring and dismantled radiators.

The appellate court heard a court-appointed expert. The expert explained that a conclusive answer would require investigations and air measurements costing about EUR 63,500 gross. With the parties’ agreement the court dispensed with those investigations because their cost was out of proportion to the amount in dispute (section 407a (4) sentence 2 of the Code of Civil Procedure, ZPO). On that basis the court delivered the judgment from which the four practical rules below follow.

Can the contractor demand payment without formal acceptance?

Yes, if the client no longer demands performance of the contract and only raises monetary claims against the contractor. As a rule, the contract price falls due upon acceptance of the work (Abnahme, section 641 (1) of the German Civil Code, BGB). But if the client demands neither completion nor repair and merely sets off damages, the contractual relationship turns into a settlement relationship (Abrechnungsverhältnis) and acceptance is no longer a precondition for payment. The Federal Court of Justice (Bundesgerichtshof, BGH) described this concept in its judgment of 19 January 2017 (VII ZR 301/13): a settlement relationship arises when the client can no longer demand performance and makes clear that he does not want to work with the contractor any more.

In the Brandenburg case the client had terminated the contract, received a verifiable final invoice and defended himself exclusively with set-offs. The court summed this up in one sentence:

„Das Fehlen einer Abnahme der Werkleistung der Klägerin steht der Fälligkeit der Forderung dabei nicht entgegen, da der Beklagte eine weitere Erfüllung des Vertrages nicht verlangt, sondern sich allein auf Geld gerichtete Gegenansprüche stützt, sodass sich das Vertragsverhältnis in ein Abrechnungsverhältnis umgewandelt hat und die Abnahme nicht mehr Fälligkeitsvoraussetzung für den Werklohnanspruch ist.”

“The absence of acceptance of the claimant’s work does not prevent the claim from falling due, because the defendant does not demand further performance of the contract but relies solely on monetary counterclaims, so that the contractual relationship has turned into a settlement relationship and acceptance is no longer a precondition for the contract price to become due.”

OLG Brandenburg, judgment of 11 June 2026 – 10 U 5/26, reasons II.1 – our translation

Two things follow for the contractor. After termination by the client, the contractor must issue a verifiable (prüffähig) final invoice, otherwise the claim does not fall due. How to structure it is explained in our article on the final invoice in Germany. The client, in turn, cannot rely on the missing acceptance and at the same time limit his defence to monetary set-offs, because that very stance opens the way to payment. Other variants of a payment claim without acceptance are covered in our article on acceptance of construction works.

What does the contractor have to prove under an hourly-rate agreement?

The contractor only has to show two things: how many hours were spent on the contractual work and at what rates. A price agreed under section 631 (1) BGB as the product of rate and time does not require proof that every hour was necessary. The BGH so held in its judgment of 28 May 2009 (VII ZR 74/06), following its judgment of 17 April 2009 (VII ZR 164/07): to substantiate a claim measured by time spent, the contractor generally only needs to state the hours that went into the contractual work.

The evidence consists mainly of timesheets (Stundenzettel), the testimony of fitters and site managers, and photo documentation. In the Brandenburg case, 64 hours of decontamination and 84 hours of protective measures were covered by timesheets signed by the client. As for 392 hours of demolition, the court read the client’s submissions as disputing not the performance of the work but its necessity, which is already the objection of uneconomic performance discussed below. The project manager had billed 22.5 hours, of which only 13.5 were accepted, because 9 hours fell on 1 and 9 July 2020, before the contract of 27 July 2020 was concluded, and the contractor had not shown that the contract covered those earlier activities.

The practical rule is this: work done before the contract was signed, such as the first installation of dryers, must be expressly included in the contract or in a separate order, otherwise it stays unpaid. It should also be remembered that the verifiability of an invoice does not reverse the burden of proof. In its judgment of 28 May 2009 (VII ZR 74/06) the BGH expressly rejected the view that a client who fails to object to a verifiable invoice must from then on prove that the entries in the timesheets are wrong.

What is the effect of the client’s signature on a timesheet?

The client’s signature on a timesheet operates as a declaratory acknowledgement of debt (deklaratorisches Schuldanerkenntnis), but only within the scope of the entries on the sheet, which usually means the number of hours. The client is bound by those entries unless he proves that they are wrong and that he did not know this when he signed. The signature does not, however, cut off the objection that the hours were excessive or the work unnecessary. The Brandenburg court adopted this formula from established case law:

„Dabei kommt den unterschriebenen Stundenlohnzetteln grundsätzlich die Wirkung eines deklaratorischen Schuldanerkenntnisses zu, die allerdings auf die in den Stundenlohnzetteln enthaltenen Leistungsangaben begrenzt ist und regelmäßig nur den aufgelisteten Stundenaufwand erfasst.”

“Signed timesheets in principle have the effect of a declaratory acknowledgement of debt, which is however limited to the details of the work contained in the timesheets and as a rule covers only the hours listed there.”

OLG Brandenburg, judgment of 11 June 2026 – 10 U 5/26, reasons II.1 a) cc) – our translation

One source of this rule is the judgment of the Higher Regional Court of Cologne of 16 September 2008 (24 U 167/07), where the client had countersigned sheets for 258.5 hours for demolishing and rebuilding a basalt wall and was nevertheless allowed to argue that the effort was unreasonable. In the Brandenburg case the client had conceded that the decontamination sheets bore his signature, so the 64 hours were treated as worked and his objections shifted to the level of economic efficiency.

A contract based on the German construction contract procedures VOB/B works differently. Under section 15 (3) VOB/B the contractor submits timesheets daily or weekly, and the client must return the certified sheets with any objections within six working days of receipt, otherwise they are deemed acknowledged. This deemed acknowledgement applies only if the VOB/B has been incorporated into the contract. In its judgment of 28 May 2009 (VII ZR 74/06) the BGH refused to transfer it to BGB contracts as a general legal principle. What happens when a site manager signs without authority is described in our article on construction timesheets and the site manager’s signature.

Why do excessive hours not reduce the price automatically?

An hourly-rate agreement imposes on the contractor an ancillary duty to perform economically (Pflicht zur wirtschaftlichen Betriebsführung), derived from good faith (section 242 BGB). A breach of that duty does not reduce the price by itself but gives the client a damages claim under section 280 (1) BGB, the content of which is release from paying for the excessive time. The BGH put it this way in the headnote of its judgment of 28 May 2009 (VII ZR 74/06), building on its judgment of 1 February 2000 (X ZR 198/97):

„Die Vereinbarung einer Stundenlohnvergütung für Werkleistungen begründet nach Treu und Glauben eine vertragliche Nebenpflicht zur wirtschaftlichen Betriebsführung, deren Verletzung sich nicht unmittelbar vergütungsmindernd auswirkt, sondern einen vom Besteller geltend zu machenden Gegenanspruch aus § 280 Abs. 1 BGB entstehen lässt. Dessen tatsächliche Voraussetzungen muss der Besteller nach allgemeinen Grundsätzen darlegen und beweisen.”

“An agreement on hourly-rate remuneration for work creates, under the principle of good faith, a contractual ancillary duty of economic performance. A breach of that duty does not directly reduce the remuneration but gives rise to a counterclaim of the client under section 280 (1) BGB, which the client must assert. The factual requirements of that counterclaim must be set out and proved by the client under the general rules.”

BGH, judgment of 28 May 2009 – VII ZR 74/06, headnote b – our translation

This construction has concrete procedural consequences. The client must assert the counterclaim, usually by set-off (sections 387, 389 BGB) or counterclaim, and put a figure on it. The court does not strike out hours of its own motion. In the Brandenburg case the court calculated that the client’s set-off related to items 1.1.1, 2.1, 2.2 and 2.3 of the final invoice, that is EUR 18,562.80 net or EUR 23,040.15 gross after adding the 7 % site-facilities surcharge and 16 % VAT. The set-off failed not because of the arithmetic but because the client did not prove uneconomic performance.

What does the client have to show, and when does a secondary burden of explanation shift to the contractor?

The client must present facts from which uneconomic performance follows and, if disputed, prove them. The requirements for his submissions are not high, because he usually does not know the conditions under which the contractor worked. He may not, however, dispute the number of hours “ins Blaue hinein”, that is without any factual basis (BGH, judgment of 17 April 2009 – VII ZR 164/07). It is enough for him to name the circumstances known to him or easily ascertainable, so that the court can take evidence, usually through an expert opinion.

The burden of explanation partly shifts to the contractor when the client cannot tell which work was actually performed and is therefore unable to assess whether the time billed was economic. The contractor then bears a secondary burden of explanation (sekundäre Darlegungslast): he must describe the nature and content of the work billed by time in enough detail to allow the client a proper defence (BGH, judgment of 17 April 2009 – VII ZR 164/07, headnote c). If the contractor fails to do so, the court may not dismiss the objection of uneconomic performance as unsubstantiated, and the procedural disadvantages fall on the contractor. No secondary burden arises, however, where the client himself ordered the individual works and is later unable to reconstruct the scope of his order (BGH, judgment of 28 May 2009 – VII ZR 74/06, headnote c).

In the Brandenburg case the client had presented sufficient facts, since the court took expert evidence. He lost at the stage of proof. The court expert could not establish that drying the cavities of the plasterboard elements had been pointless, because there is no method for dating mould growth, and without investigations it remained open whether in May 2020 there had merely been spore contamination (Kontamination) or already an infestation (Befall). In the case of contamination, vacuuming with a class H industrial vacuum cleaner and wiping with alcohol are acceptable methods, whereas infestation requires the removal of the affected components. The client’s private expert report of 27 December 2020 did not help, because the court expert specifically did not confirm its conclusion that the components had to be removed in any event. Photos and videos submitted for the first time in a brief of 11 December 2025 were disregarded as late (section 531 (2) ZPO), and the assertion that the material had only just been found did not dispel the charge of negligence. As the condition in May 2020 could no longer be clarified, the uncertainty went against the client as the party bearing the burden of proof.

The complaint about the one-hour breakfast break failed for a simpler reason: the timesheets showed that at least one hour per employee per day had been recorded as a break and not charged.

Defective work is not uneconomic performance

The allegation that the contractor did a poor job is a defect complaint, not an uneconomic-performance complaint, and it has to be pursued under the law on defects in works contracts. The expert confirmed that mould remediation requires complete separation of the remediation area from the living area (the so-called black-and-white separation) with airlocks and negative pressure, and that the contractor’s protective measures did not meet that standard. The court saw no uneconomic performance in this: more extensive protective measures would have meant more hours and higher costs, not fewer. Missing quality is a defect, and a damages claim for a defect (section 634 no. 4, sections 280, 281 BGB) requires notice of the defect, an unsuccessful deadline for remedy and a concretely stated loss. The client had pleaded none of that.

The set-offs for the ceiling beams and the laminate flooring, EUR 6,500 in total, ended the same way. The client claimed at least 120 screw holes in the beams (removal at least EUR 2,500) and a laminate floor in the children’s room that had to be replaced entirely (at least EUR 4,000). But he produced neither a quotation nor a cost estimate, and his private expert report contained no cost figures, so the court could not even estimate a minimum loss under section 287 ZPO. The court also recalled that damages for a defect cannot be measured by fictitious repair costs, that is the cost of a repair that was never carried out (BGH, judgment of 22 February 2018 – VII ZR 46/17). Anyone wishing to set off repair costs must commission the repair or show a difference in value.

The claim for the radiators (EUR 618.62) failed on the evidence. The client’s wife was named as a witness for the first time on appeal (section 531 (2) ZPO), and an expert cannot determine years later whether radiators installed by a third-party firm had previously been removed by the contractor’s staff. Only once removal by the contractor is proved would the contractor have to show a corresponding order. More on the allocation of the burden of proof for defects in our article on construction defects and the burden of proof.

What did the contractor lose despite winning?

The contractor won on principle but lost several items because of gaps in its own documentation. Of 392 demolition hours the court struck 64 hours on 18 and 19 August 2020 (16 foreman hours and 48 skilled-worker hours) because they related to demolishing the upstairs bathroom and the contractor had not shown an order for it. The blanket assertion that destructive interventions were unavoidable was not enough, the invoice did not mention the bathroom, and the court also rejected a claim based on agency without authority (Geschäftsführung ohne Auftrag). The EUR 1,450 materials lump sum for the demolition work was lost because, after the client’s denial, the contractor did not state which materials had been used and the materials column of the timesheets was empty. Of the project manager’s hours, 9 hours before the contract was concluded fell away.

The court also applied a VAT rate of only 16 %: for work performed in the second half of 2020 the reduced rate applied, so an invoice at the higher rate would have been overstated to that extent. The contractor did not recover the EUR 1,088.60 for the pre-litigation lawyer’s letter, because it had not produced the letter and had not shown that the client was already in default when the lawyers were instructed (section 280 (2), section 286 BGB). The costs of the proceedings were split 17 % to 83 % at first instance and 10 % to 90 % on appeal against the client, with the contractor bearing in advance the costs of its own default that had led to the default judgment. Leave to appeal on points of law was not granted.

Is the objection of uneconomic performance worth it for the client?

The objection is only worth raising if the client has concrete indications of unnecessary hours and can prove them at a cost that bears a sensible relation to the amount in dispute. As the party bearing the burden of proof, the client pays the advance for the expert and loses if the question cannot be resolved. In the case decided by the Higher Regional Court of Brandenburg (judgment of 11 June 2026 – 10 U 5/26), clarifying a single question would have cost almost three times what the objection could have saved in total.

The figures in the judgment show the imbalance. The set-off based on uneconomic performance concerned EUR 23,040.15 gross, and the court fixed the value in dispute for both instances at up to EUR 35,000. To establish whether the cavity drying of the plasterboard elements had been pointless, the court-appointed expert would have needed tests and indoor air measurements estimated at EUR 63,500 gross, roughly 2.8 times the entire disputed amount. With the parties’ consent the court dispensed with these tests, and without the findings the client failed to prove the objection.

The advance for an expert opinion is paid by the party that applied for expert evidence, and the court is to commission the expert only once the money has been paid (section 17 (1) Court Fees Act, GKG, and section 379 in conjunction with section 402 ZPO). For a client who has to prove uneconomic performance, this means financing the clarification up front, whatever the outcome of the case.

If costs emerge that are clearly out of proportion to the value in dispute or significantly exceed the advance requested, the expert must warn the court in good time (section 407a (4) sentence 2 ZPO). An expert who fails to do so may have the fee capped (section 8a (3) and (4) Judicial Remuneration and Compensation Act, JVEG). The warning is meant to make the cost risk clear to the parties as early as possible so that they can still decide against disproportionately expensive evidence (OLG Brandenburg, order of 30 May 2024 – 6 W 19/24). A party that insists on the evidence anyway must expect a correspondingly higher advance.

In the end, the allocation of costs decides. The court-appointed expert’s fee forms part of the court’s expenses and is charged in full (no. 9005 of the schedule of costs to the GKG), and the court allocates the costs of the proceedings according to success and failure (sections 91, 92 ZPO). If the objection fails, the client bears the expert costs in proportion to the part lost. In the Brandenburg case the client was ordered to pay 90 % of the costs of the appeal.

The value in dispute can rise as well. If the client pleads set-off in the alternative with a disputed counterclaim, the value in dispute increases by the value of that counterclaim to the extent that the court decides on it with res judicata effect (section 45 (3) GKG), and lawyers’ fees follow the same value (section 23 (1) sentence 1 Lawyers’ Remuneration Act, RVG). In the Brandenburg case the court did not add the alternative set-off based on uneconomic performance, because it concerned the same subject matter as the objections to the amount of the price (section 45 (1) sentence 3 GKG).

It is instructive to see where the client succeeded in the Brandenburg case. The Higher Regional Court reduced the amount awarded from EUR 21,079.16 to EUR 15,862.33 and refused the EUR 1,088.60 in pre-litigation lawyer’s fees. The reduction rests on items the contractor had to plead and prove: 64 hours for demolishing a bathroom without a sufficiently pleaded order, a materials lump sum of EUR 1,450 without any statement of the materials used, and 9 project manager hours from before the contract was concluded. The objection of uneconomic performance worth EUR 23,040.15 gross, which the client had to prove, failed completely.

This suggests a sensible order of defence. First come the objections where the contractor bears the burden of proof: no order for particular work, hours not covered by signed timesheets, work before the contract was concluded and materials billed without proof. These can usually be resolved with documents and witnesses, and if such a question remains open, it goes against the contractor. The client should raise the objection of uneconomic performance only in addition, with concrete indications and evidence that can still be obtained.

How can the client preserve evidence before building elements are removed?

Evidence of unnecessary or unsuitable work must be preserved while the condition on site can still be established, that is before removal, disposal or further construction. The strongest tool is the independent evidence procedure (selbständiges Beweisverfahren), in which a court-appointed expert records the condition before or alongside a lawsuit (section 485 ZPO). Photos, measurement records and a prompt private expert report supplement this, but do not replace the court expert’s opinion.

If no lawsuit is pending yet, a party may apply for a written expert opinion where it has a legal interest in having certain matters established, including the condition of an object, the cause of property damage or a defect, and the effort required to remedy it (section 485 (2) sentence 1 ZPO). The statute assumes such an interest as soon as the finding may help avoid litigation (section 485 (2) sentence 2 ZPO). After water damage, this allows an expert to establish whether building elements are merely contaminated with mould spores or already infested.

Whether or not a lawsuit is already running, section 485 (1) ZPO allows expert evidence if the opponent agrees or there is a risk that the evidence will be lost or become harder to use. That is typically the situation when damp walls are about to be demolished or renovation is to continue. In later proceedings the result is treated as if the trial court had taken the evidence itself (section 493 (1) ZPO), so the findings do not have to be repeated.

Service of the application suspends the limitation period for the claims concerned (section 204 (1) no. 7 BGB), and the suspension ends six months after the procedure has been concluded (section 204 (2) sentence 1 BGB). Preserving evidence is not free, because the applicant advances the expert’s costs (section 17 (1) GKG). Its advantage is timing: the expert sees the condition first-hand instead of reconstructing it years later. That is exactly what failed in the Brandenburg case, because according to the court-appointed expert there is no method for determining the age of a mould infestation.

A private expert report is available faster but does not bind the court (section 286 (1) ZPO). In the Brandenburg case the client had already commissioned an expert on 27 December 2020 who considered the drying generally unsuitable. The court-appointed expert did not share that view and considered further tests necessary, so the private report changed nothing. Early documentation is still valuable, such as dated photos and moisture measurement records, provided it is submitted at first instance, because the appeal court admits new evidence only within narrow limits (section 531 (2) ZPO). Who has to prove what after acceptance when water damage occurs is explained in our article on water damage subrogation in Germany.

Frequently asked questions

Does the contractor have to prove that the hours were necessary under an hourly-rate agreement?
No. The contractor shows the number of hours and the rate (section 631 (1) BGB). The objection that there were too many hours is a damages claim of the client under section 280 (1) BGB, which the client must assert and prove (BGH VII ZR 74/06, OLG Brandenburg 10 U 5/26).

Does a signed timesheet cut off all of the client’s objections?
Only as to the number of hours. The signature operates as a declaratory acknowledgement of debt within the scope of the entries. The client may still argue that the hours were unnecessary or excessive, but must prove it. To attack the number of hours itself, he must show that the entries are wrong and that he did not know this when signing.

How do VOB/B contracts and BGB contracts differ when it comes to timesheets?
Under the VOB/B the client must return the sheets with objections within six working days, otherwise they are deemed acknowledged (section 15 (3) VOB/B). A BGB contract has no such fiction, and the client’s silence is not an acknowledgement (BGH VII ZR 74/06).

Can the contractor sue for payment if there was no acceptance?
Yes, if the client no longer demands performance and defends himself only with monetary claims. The contract then turns into a settlement relationship (Abrechnungsverhältnis) and acceptance is no longer a precondition for the price to fall due (BGH VII ZR 301/13, OLG Brandenburg 10 U 5/26).

What should a client do who considers the work pointless?
Gather facts and evidence immediately: photos, an independent expert opinion before demolition, correspondence. In court he must name circumstances pointing to uneconomic performance and prove them, usually by expert evidence. If the expert cannot establish anything, the uncertainty goes against the client.

Is it worth arguing in court that the contractor worked uneconomically?
Only with concrete indications and reasonable costs of proof. The client bears the burden of proof, pays the advance for the expert (section 17 (1) GKG) and loses if the question cannot be resolved. In OLG Brandenburg 10 U 5/26 the tests on the drying alone would have cost an estimated EUR 63,500, while EUR 23,040.15 was in dispute.

How can the client preserve evidence before building elements are removed?
Most reliably through independent evidence proceedings (section 485 ZPO). A court-appointed expert records the condition, in later proceedings the result is treated like evidence taken by the trial court (section 493 (1) ZPO), and service of the application suspends the limitation period (section 204 (1) no. 7 BGB).

Does poor quality reduce the hourly-rate price?
Not automatically. Defective work gives rise to defect rights, including damages after an unsuccessful deadline for remedy (section 634 no. 4, sections 280, 281 BGB). Fictitious repair costs cannot be claimed (BGH VII ZR 46/17), so actual repair costs or a difference in value must be shown.

Basis of this article: OLG Brandenburg, judgment of 11 June 2026 – 10 U 5/26 (previously LG Frankfurt (Oder), judgment of 25 August 2023). BGH case law: judgments of 17 April 2009 – VII ZR 164/07, 28 May 2009 – VII ZR 74/06, 1 February 2000 – X ZR 198/97, 19 January 2017 – VII ZR 301/13 and 22 February 2018 – VII ZR 46/17, and OLG Köln, judgment of 16 September 2008 – 24 U 167/07, and OLG Brandenburg, order of 30 May 2024 – 6 W 19/24. Provisions: sections 204, 242, 280, 286, 387, 389, 631, 634, 641 BGB, section 15 VOB/B, sections 91, 92, 286, 287, 379, 402, 407a, 485, 493, 531 ZPO, sections 17, 45 GKG and no. 9005 of the GKG schedule of costs, section 8a JVEG, section 23 RVG. Legal position: September 2026. This article is for general information and does not replace legal advice in an individual case.

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