{"id":5050,"date":"2026-07-12T18:36:20","date_gmt":"2026-07-12T16:36:20","guid":{"rendered":"https:\/\/bwlaw.de\/knowledge-base\/compensation-terminated-construction-contract-germany\/"},"modified":"2026-07-12T18:36:20","modified_gmt":"2026-07-12T16:36:20","slug":"compensation-terminated-construction-contract-germany","status":"publish","type":"page","link":"https:\/\/bwlaw.de\/en\/knowledge-base\/compensation-terminated-construction-contract-germany\/","title":{"rendered":"Compensation for a terminated construction contract in Germany \u2014 how not to lose the pay for unperformed works"},"content":{"rendered":"\r\n<div id=\"progress\" aria-hidden=\"true\"><\/div>\r\n\r\n<!-- EN version of rozliczenie-po-wypowiedzeniu-umowy-budowlanej. Own text, quotes verbatim\r\n     from the reasoning of KG, Hinweisbeschluss 13.5.2025 - 21 U 8\/25 (verified 11-12.07.2026,\r\n     ibr-online). ECJ 28.11.2024 - C-622\/23 (ECLI:EU:C:2024:994) verified 12.07.2026 on\r\n     dejure\/eur-lex. LG Berlin II 16.12.2024 - 14 O 137\/23 per the KG reasoning. -->\r\n<header>\r\n  <div class=\"wrap\">\r\n    <a href=\"\/en\/\" class=\"brand\" aria-label=\"BWLAW\"><img loading=\"lazy\" decoding=\"async\" src=\"\/wp-content\/themes\/bwlaw-child-1\/assets\/img\/logo-bw.png\" alt=\"BWLAW \u2013 law firm in Germany\" width=\"42\" height=\"28\"><\/a>\r\n    <nav aria-label=\"Main navigation\">\r\n      <a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/construction-law\/\">Construction law<\/a>\r\n      <a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/debt-collection\/\">Debt collection<\/a>\r\n      <a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/company-formation\/\">Corporate law<\/a>\r\n      <a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/employment-law\/\">Employment law<\/a>\r\n      <a href=\"https:\/\/bwlaw.de\/en\/knowledge-base\/\" class=\"active\">Knowledge base<\/a>\r\n      <a href=\"\/en\/#zespol\">Team<\/a>\r\n    <\/nav>\r\n    <a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/construction-law\/#kontakt\" class=\"btn\">Contact a lawyer <span class=\"arr\">\u2192<\/span><\/a>\r\n    <button class=\"burger\" aria-label=\"Menu\">\u2630<\/button>\r\n  <\/div>\r\n<\/header>\r\n\r\n<section class=\"shero\" style=\"padding-bottom:3.5rem\">\r\n  <div class=\"glow\"><\/div>\r\n  <div class=\"wrap\" style=\"grid-template-columns:1fr\">\r\n    <div>\r\n      <nav class=\"crumbs\" aria-label=\"Breadcrumbs\"><a href=\"\/en\/\">Home<\/a><span>\/<\/span><a href=\"https:\/\/bwlaw.de\/en\/knowledge-base\/\">Knowledge base<\/a><span>\/<\/span><b>Construction<\/b><\/nav>\r\n      <span class=\"eyebrow\">Construction<\/span>\r\n      <h1 style=\"max-width:30ch\">Compensation for a terminated construction contract in Germany \u2014 how not to lose the pay for unperformed works<\/h1>\r\n      <p class=\"lead\">The principal terminates the contract, the contractor issues a final invoice over the full amount \u2014 and loses everything in court, although in principle he was entitled to remuneration even for the works he never performed. That is how a recent case before the Kammergericht, the Berlin court of appeal, ended. Compensation for a terminated construction contract in Germany follows strict rules \u2014 whoever ignores them can lose hundreds of thousands of euros. Using this fresh decision, we show how to do it properly: from separating the works, through VAT after the ECJ ruling, to the formula AWE = T \u00d7 A.<\/p>\r\n      <div class=\"art-meta\">\r\n        <img decoding=\"async\" src=\"\/wp-content\/themes\/bwlaw-child-1\/assets\/img\/dr-artur-barczewski.webp\" alt=\"Dr. Artur Barczewski\" loading=\"lazy\">\r\n        <div><b>Dr. Artur Barczewski<\/b>Rechtsanwalt \u00b7 attorney-at-law<\/div>\r\n        <div style=\"margin-left:1rem;border-left:1px solid rgba(255,255,255,.25);padding-left:1rem\">\u2248 10 min read<br>updated: July 2026<\/div>\r\n      <\/div>\r\n    <\/div>\r\n  <\/div>\r\n<\/section>\r\n\r\n<article class=\"sec\">\r\n  <div class=\"wrap\">\r\n    <div class=\"prose rv\" style=\"font-size:1.02rem\">\r\n      <h3 style=\"font-size:1.35rem;margin-top:2.2rem\">The story: a claim of almost 600,000 euros \u2014 dismissed in full<\/h3>\r\n      <p>The contractor extended and maintained the fire alarm system (Brandmeldeanlage) of a clinic. The principal terminated both contracts \u2014 the one for the extension works and the one for the maintenance. The contractor issued a final invoice as if everything had been performed completely and free of defects: the main contract over 200,000 euros net plus two undisputed supplementary orders over 290,000 and 9,500 euros net, together <strong>499,500 euros net, 594,404 euros gross<\/strong> \u2014 including the part he never performed after the termination. On top of that he claimed the lost profit from the terminated maintenance contract.<\/p>\r\n      <p>The regional court (LG Berlin II, judgment of 16 December 2024, 14 O 137\/23) dismissed the claim in full. The Kammergericht announced in a guidance decision (Hinweisbeschluss) of 13 May 2025, <strong>21 U 8\/25<\/strong>, that it would dismiss the appeal \u2014 and the contractor withdrew it. Not because he was owed nothing. But because <strong>he did not know how to settle the claim the way German case law requires<\/strong>. This lost case reads like a complete manual for getting the settlement right.<\/p>\r\n\r\n      <h3 style=\"font-size:1.35rem;margin-top:2.2rem\">Large and small termination payment \u2014 what you can claim after a termination<\/h3>\r\n      <p>German construction law distinguishes two scenarios. After a <strong>free termination<\/strong> (freie K\u00fcndigung, \u00a7 648 sentence 2 BGB, and for VOB\/B contracts \u00a7 8(1) VOB\/B) the principal may end the contract at any time without any reason, but pays a price for it: the contractor is entitled to the agreed remuneration <strong>also for the unperformed works<\/strong>, reduced by the expenses he saves and by what he earns \u2014 or in bad faith fails to earn \u2014 with the capacities freed up by the termination. This is the so-called large termination payment (gro\u00dfe K\u00fcndigungsverg\u00fctung).<\/p>\r\n      <p>Things are different after a <strong>termination for cause<\/strong> by the principal: what remains is only the small termination payment, the remuneration for the part of the works performed up to the day of termination (\u00a7 648a(5) BGB). In the present case the maintenance contract had been terminated extraordinarily on the basis of a contractual clause \u2014 and since the contractor had not yet performed any inspections, his claim under that contract amounted to zero. When the contractor himself may terminate for cause, we explain in our article on <a href=\"https:\/\/bwlaw.de\/en\/knowledge-base\/termination-construction-contract-germany\/\">terminating a construction contract under \u00a7 648a BGB<\/a>.<\/p>\r\n      <p>Along the way the Kammergericht confirmed a point of real importance for installation and service companies: <strong>a contract for the maintenance of the fire alarm system of a clinic is a construction contract<\/strong> within the meaning of \u00a7 650a(2) BGB, because the functioning of that system is essential for the intended use of the building. The consequence: such service contracts are governed by construction law \u2014 settlement rigours included.<\/p>\r\n\r\n      <h3 style=\"font-size:1.35rem;margin-top:2.2rem\">First requirement: a verifiable settlement, not an invoice &#8220;for everything&#8221;<\/h3>\r\n      <p>The large termination payment requires a <strong>verifiable final invoice<\/strong> (pr\u00fcff\u00e4hige Schlussrechnung) \u2014 also under a lump-sum contract. Under the established case law of the Federal Court of Justice the contractor must first <strong>separate the performed works from the unperformed ones<\/strong> and then value the performed part according to the ratio of its value to the value of the entire works covered by the lump sum. The calculation of the price has to be disclosed \u2014 so that the principal can check the settlement and defend himself. How to build such a final invoice, we explain step by step in our article on the <a href=\"https:\/\/bwlaw.de\/en\/knowledge-base\/final-invoice-schlussrechnung\/\">final invoice (Schlussrechnung)<\/a>.<\/p>\r\n      <p>The Berlin contractor did exactly the opposite: he invoiced everything, although in the proceedings he himself conceded that defects and unfinished works existed at the moment of termination. No deductions for reduced works, no saved expenses, no reference to the calculation of the lump sum. The Kammergericht summed it up like this:<\/p>\r\n      <blockquote style=\"margin:1.6rem 0;padding:1.2rem 1.5rem;background:rgba(194,85,49,.08);border-left:3px solid var(--terra);border-radius:0 14px 14px 0\">\r\n        <p style=\"font-style:italic;margin-bottom:.7rem\">\u201eEs bleibt v\u00f6llig unklar, wie die Kl. diese Leistungen urspr\u00fcnglich kalkuliert hat und wie dieser Preisansatz f\u00fcr die Einzelleistung in den Pauschalpreis eingeflossen ist. Ein vollst\u00e4ndig bepreistes Leistungsverzeichnis als Grundlage der vorgenommenen Pauschalierung liegt nicht vor.&#8221;<\/p>\r\n        <p style=\"margin-bottom:.7rem\">&#8220;It remains entirely unclear how the claimant originally calculated these works and how this price for the individual item found its way into the lump sum. A fully priced bill of quantities underlying the agreed lump sum has not been produced.&#8221;<\/p>\r\n        <p style=\"font-size:.85rem;color:var(--ink-soft);margin:0\">KG, decision of 13 May 2025, 21 U 8\/25 \u2014 our translation<\/p>\r\n      <\/blockquote>\r\n      <p>A particularly painful detail: the principal never objected to the verifiability of the invoice within the period under \u00a7 16(3) VOB\/B. He did not have to. <strong>The court examines the conclusiveness of the settlement of its own motion<\/strong> \u2014 and its absence means the claim is dismissed as unfounded, not merely as premature.<\/p>\r\n\r\n      <h3 style=\"font-size:1.35rem;margin-top:2.2rem\">Settling &#8220;from the top&#8221; \u2014 only where at most 5 per cent remained<\/h3>\r\n      <p>There is a shortcut: where only <strong>minor residual works remained, the case law allows a settlement &#8220;from the top&#8221;<\/strong> (Abrechnung von oben) \u2014 only the unperformed part is valued and deducted from the full lump sum. The threshold of insignificance lies at no more than 5 per cent of the value of the entire works. In this case the threshold was 24,975 euros net \u2014 and the principal showed that the completion of the works by a third company had cost <strong>110,451.56 euros net<\/strong>. The shortcut was out of the question.<\/p>\r\n      <p>Added to that was a substantive argument beyond the numbers. At the moment of termination the system had undisputed defects of category M, which excluded operational safety, and had not passed the technical acceptance:<\/p>\r\n      <blockquote style=\"margin:1.6rem 0;padding:1.2rem 1.5rem;background:rgba(194,85,49,.08);border-left:3px solid var(--terra);border-radius:0 14px 14px 0\">\r\n        <p style=\"font-style:italic;margin-bottom:.7rem\">\u201eDie fehlende Funktionalit\u00e4t der Brandmeldeanlage im Zeitpunkt der K\u00fcndigung spricht indiziell gegen die Annahme, dass die Kl. nur noch geringf\u00fcgige Restleistungen zu erbringen hatte [\u2026]. Eine Brandmeldeanlage ohne technische Abnahme und best\u00e4tigter Betriebssicherheit ist kein bis auf geringf\u00fcgige Restleistungen vollendetes Werk.&#8221;<\/p>\r\n        <p style=\"margin-bottom:.7rem\">&#8220;The lack of functionality of the fire alarm system at the time of termination is circumstantial evidence against the assumption that the claimant only had minor residual works left to perform [\u2026]. A fire alarm system without technical acceptance and confirmed operational safety is not a work completed except for minor residual works.&#8221;<\/p>\r\n        <p style=\"font-size:.85rem;color:var(--ink-soft);margin:0\">KG, decision of 13 May 2025, 21 U 8\/25 \u2014 our translation<\/p>\r\n      <\/blockquote>\r\n      <p>The Kammergericht added a control calculation that exposed the entire claim: from the lump sum of 499,500 euros net it deducted the completion costs of 110,451.56 euros \u2014 leaving 389,048.44 euros. The principal, however, had already paid <strong>522,338.75 euros<\/strong>. Even on the most generous view nothing was left for the contractor.<\/p>\r\n\r\n      <h3 style=\"font-size:1.35rem;margin-top:2.2rem\">VAT also on unperformed works \u2014 the shift after the ECJ ruling<\/h3>\r\n      <p>There is one thread the contractor actually won \u2014 important for every company settling a terminated contract. For years the Federal Court of Justice and the Federal Fiscal Court held that the part of the remuneration attributable to unperformed works was not subject to VAT. The Court of Justice of the EU decided otherwise: the amount owed to a supplier after the customer&#8217;s early termination of the contract is <strong>consideration for a service and subject to value added tax<\/strong> (ECJ, judgment of 28 November 2024, C-622\/23). The Kammergericht drew the conclusion directly:<\/p>\r\n      <blockquote style=\"margin:1.6rem 0;padding:1.2rem 1.5rem;background:rgba(194,85,49,.08);border-left:3px solid var(--terra);border-radius:0 14px 14px 0\">\r\n        <p style=\"font-style:italic;margin-bottom:.7rem\">\u201eHieraus folgt, dass auch die Verg\u00fctung f\u00fcr nicht erbrachte Leistungen grunds\u00e4tzlich einen nach \u00a7 1 I Nr. 1 UStG steuerbaren Umsatz darstellt und bei der Bemessungsgrundlage gem. \u00a7 10 I UStG zu ber\u00fccksichtigen ist.&#8221;<\/p>\r\n        <p style=\"margin-bottom:.7rem\">&#8220;It follows that the remuneration for unperformed works, too, constitutes in principle a taxable turnover under \u00a7 1(1) no. 1 UStG and must be taken into account in the taxable amount pursuant to \u00a7 10(1) UStG.&#8221;<\/p>\r\n        <p style=\"font-size:.85rem;color:var(--ink-soft);margin:0\">KG, decision of 13 May 2025, 21 U 8\/25 \u2014 our translation<\/p>\r\n      <\/blockquote>\r\n      <p>In practice: <strong>the final invoice after a termination may charge VAT also on the unperformed part<\/strong> \u2014 the previous line of the BGH and the BFH is, according to the Kammergericht, outdated. The tax side should still be coordinated with a tax adviser, because the case concerned the settlement in civil proceedings and the practice of the tax authorities is still taking shape.<\/p>\r\n    <\/div>\r\n\r\n    <div class=\"hl rv\" style=\"max-width:760px\">\r\n      <span class=\"eyebrow\">Checklist<\/span>\r\n      <h3>A post-termination settlement that survives in court<\/h3>\r\n      <p>First establish the nature of the termination \u2014 free or for cause \u2014 because it decides whether you may claim the unperformed works at all. Separate precisely the performed from the unperformed works and value them in proportion to the lump sum, disclosing the calculation. Deduct the saved expenses \u2014 material, travel, costs you will no longer incur \u2014 and calculate the other earnings under the formula AWE = T \u00d7 A. Charge VAT also on the unperformed part. And never invoice &#8220;for everything&#8221; while undisputed defects exist or the residual works exceed 5 per cent \u2014 such an invoice can sink the whole case.<\/p>\r\n    <\/div>\r\n\r\n    <div class=\"prose rv\" style=\"font-size:1.02rem\">\r\n      <h3 style=\"font-size:1.35rem;margin-top:2.2rem\">Saved expenses and other earnings: the formula AWE = T \u00d7 A<\/h3>\r\n      <p>The large termination payment arises from the outset <strong>only in the amount reduced by the savings<\/strong>. The contractor must therefore himself identify and value what he will not spend thanks to the termination: material, spare parts, travel costs. In the maintenance dispute the Kammergericht pointed out that the contractor had kept silent both about the material allowance in the contract and about the travel \u2014 more than 300 km one way, at least four times a year. Valuing the savings &#8220;at zero&#8221; was simply not credible to the court.<\/p>\r\n      <p>The second deduction is the <strong>anderweitiger Erwerb<\/strong> \u2014 the earnings from using the freed-up capacities elsewhere. Here the decision hands contractors a very practical tool, because the Kammergericht accepted a simple numerical statement as sufficient at the first stage of the dispute:<\/p>\r\n      <blockquote style=\"margin:1.6rem 0;padding:1.2rem 1.5rem;background:rgba(194,85,49,.08);border-left:3px solid var(--terra);border-radius:0 14px 14px 0\">\r\n        <p style=\"font-style:italic;margin-bottom:.7rem\">\u201eDieser kann jedenfalls im Ausgangspunkt mit der Formel AWE = T x A ermittelt werden, wobei T die Gesamtdauer der k\u00fcndigungsbedingt entfallenen Arbeitslast und A im Zweifel die Bruttogesamtkosten sind, die der Kl. pro Einsatzstunde ihrer k\u00fcndigungsbedingt freigestellten Arbeitskr\u00e4fte entstehen. [\u2026] Es handelt sich dabei nur um ein von der Kl. behauptetes Zahlenwerk, ihrer Erstdarlegungslast ist damit gleichwohl gen\u00fcge getan.&#8221;<\/p>\r\n        <p style=\"margin-bottom:.7rem\">&#8220;It can, at least as a starting point, be determined with the formula AWE = T \u00d7 A, where T is the total duration of the workload that fell away due to the termination and A is, in case of doubt, the total gross cost the claimant incurs per deployment hour of the workers freed up by the termination. [\u2026] This is merely a set of figures asserted by the claimant, yet it satisfies her initial burden of substantiation.&#8221;<\/p>\r\n        <p style=\"font-size:.85rem;color:var(--ink-soft);margin:0\">KG, decision of 13 May 2025, 21 U 8\/25 \u2014 our translation<\/p>\r\n      <\/blockquote>\r\n      <p>At the start it is therefore enough to show two figures: <strong>how many working hours fell away<\/strong> because of the termination and <strong>what one gross hour<\/strong> of the freed-up workers costs \u2014 in the case it was 60 euros per hour. Even mislabelling that statement as &#8220;saved expenses&#8221; did no harm. Watch the other side of this coin, though: the Kammergericht starts from full utilisation of the company. Whoever fails to show that the freed-up capacities could not be used on other jobs will have the entire lapsed workload counted against him as other earnings. The Federal Court of Justice puts the accent more gently, on so-called fill-in orders (F\u00fcllauftr\u00e4ge) which the contractor could only take on because of the termination. That difference can decide the amount of the claim and is worth playing deliberately.<\/p>\r\n\r\n      <h3 style=\"font-size:1.35rem;margin-top:2.2rem\">What this means for a foreign construction company in Germany<\/h3>\r\n      <ul>\r\n        <li><strong>A termination without cause is not the end of the money.<\/strong> After a free termination you are entitled to remuneration also for the unperformed works \u2014 but only if you settle them according to the rules of the case law.<\/li>\r\n        <li><strong>Start with the calculation, not with the invoice.<\/strong> Separate performed from unperformed, value in proportion to the lump sum and disclose the basis of the calculation. An invoice &#8220;for 100 per cent&#8221; in the face of undisputed defects is a straight road to losing.<\/li>\r\n        <li><strong>Settling &#8220;from the top&#8221; only with residuals up to 5 per cent.<\/strong> Where a third company completed the missing part, its costs will be the yardstick \u2014 as in this case, where 110,000 euros buried the shortcut.<\/li>\r\n        <li><strong>Charge VAT also on the unperformed part.<\/strong> After the ECJ ruling C-622\/23 the Kammergericht accepted this approach \u2014 coordinate the details with a tax adviser.<\/li>\r\n        <li><strong>Count the savings and the AWE before the court does.<\/strong> Material, travel, working hours times the gross rate \u2014 a simple statement suffices at the start, and its absence sinks the claim entirely.<\/li>\r\n        <li><strong>Document the state of the works on the day of termination.<\/strong> Photographs, protocols, notices of readiness for acceptance \u2014 without them you can prove neither the scope performed nor the insignificance of the residuals.<\/li>\r\n      <\/ul>\r\n\r\n      <h3 style=\"font-size:1.35rem;margin-top:2.2rem\">Frequently asked questions<\/h3>\r\n      <p><strong>The principal terminated the contract through no fault of mine. What can I claim?<\/strong><br>After a free termination \u2014 the full agreed remuneration, also for the unperformed works, reduced by saved expenses and other earnings (\u00a7 648 sentence 2 BGB, \u00a7 8(1) VOB\/B). The condition is a verifiable final invoice separating the performed from the unperformed works.<\/p>\r\n      <p><strong>What is the difference between the large and the small termination payment?<\/strong><br>The large one covers the remuneration for the entire works \u2014 performed and unperformed \u2014 after deducting savings and other earnings, and is due after a free termination. The small one is the remuneration for the part performed up to the day of termination and is all that remains where the principal terminated for cause.<\/p>\r\n      <p><strong>Do I charge VAT on the remuneration for unperformed works?<\/strong><br>According to the ECJ (C-622\/23) and the Kammergericht \u2014 yes, it is a taxable turnover. The previous contrary line of the BGH and the BFH is considered outdated. Confirm the invoicing details with a tax adviser.<\/p>\r\n      <p><strong>When may I settle &#8220;from the top&#8221;, without a full calculation?<\/strong><br>Only where the residual works are worth no more than about 5 per cent of the entire works and the settlement does not conceal calculatory shifts to the principal&#8217;s disadvantage. Where the insignificance is disputed, the completion costs of a third company are one of the yardsticks.<\/p>\r\n      <p><strong>How do I present the anderweitiger Erwerb so that the court accepts it?<\/strong><br>At the first stage a statement suffices: the total number of working hours that fell away because of the termination and the gross cost of one working hour of the freed-up workers (formula AWE = T \u00d7 A). If the freed-up capacities could not be used on other jobs, that has to be shown separately.<\/p>\r\n\r\n      <p style=\"font-size:.85rem;color:var(--ink-soft)\">Discussion and quotations based on the reasoning of the KG decision of 13 May 2025, 21 U 8\/25 (our translation), which concerns the judgment of the LG Berlin II of 16 December 2024, 14 O 137\/23. The ECJ judgment of 28 November 2024, C-622\/23, and \u00a7\u00a7 648, 648a, 650a BGB as well as \u00a7\u00a7 8, 16 VOB\/B are taken into account. This article is for information purposes and does not replace legal advice in an individual case.<\/p>\r\n    <\/div>\r\n\r\n    <div class=\"mini-cta rv\"><b>Has your German construction contract been terminated?<\/b><span style=\"color:var(--ink-soft);font-size:.92rem\">Contact us before you issue the final invoice \u2014 we will structure the settlement so that it survives the court&#8217;s scrutiny: separation of the works, savings, AWE and VAT. In English, German and Polish.<\/span><a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/construction-law\/#kontakt\" class=\"btn\">Describe your case <span class=\"arr\">\u2192<\/span><\/a><\/div>\r\n    <div class=\"prose rv\" style=\"margin-top:1.5rem\">\r\n      <h3 style=\"font-size:1.1rem\">Related topics<\/h3>\r\n      <div class=\"chips\" style=\"margin-top:.8rem\">\r\n        <a href=\"https:\/\/bwlaw.de\/en\/knowledge-base\/final-invoice-schlussrechnung\/\">The final invoice (Schlussrechnung) \u2192<\/a>\r\n        <a href=\"https:\/\/bwlaw.de\/en\/knowledge-base\/termination-construction-contract-germany\/\">Terminating a construction contract \u2014 \u00a7 648a BGB \u2192<\/a>\r\n        <a href=\"https:\/\/bwlaw.de\/en\/knowledge-base\/extra-work-nachtrag-german-construction\/\">Extra work (Nachtrag) \u2014 pricing and payment \u2192<\/a>\r\n      <\/div>\r\n    <\/div>\r\n  <\/div>\r\n<\/article>\r\n\r\n<section class=\"sec alt\">\r\n  <div class=\"wrap\">\r\n    <div class=\"lawyer rv\">\r\n      <img decoding=\"async\" src=\"\/wp-content\/themes\/bwlaw-child-1\/assets\/img\/dr-artur-barczewski.webp\" alt=\"Dr. Artur Barczewski \u2013 author\" loading=\"lazy\">\r\n      <div>\r\n        <b>Dr. Artur Barczewski<\/b>\r\n        <div class=\"role\">Rechtsanwalt \u00b7 attorney-at-law<\/div>\r\n        <p>Author of this article. Handles construction disputes for foreign companies across Germany. <a href=\"https:\/\/bwlaw.de\/en\/team\/artur-barczewski\/\">View profile \u2192<\/a><\/p>\r\n      <\/div>\r\n    <\/div>\r\n  <\/div>\r\n<\/section>\r\n\r\n<section class=\"cta-end\">\r\n  <div class=\"glow\"><\/div>\r\n  <div class=\"wrap\">\r\n    <span class=\"eyebrow rv\">Contact<\/span>\r\n    <h2 class=\"rv d1\">Does your situation look similar?<\/h2>\r\n    <p class=\"rv d2\">Every case has details that change the outcome. Describe yours \u2014 you will receive a concrete answer and a fee estimate.<\/p>\r\n    <div class=\"row rv d3\">\r\n      <a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/construction-law\/#kontakt\" class=\"btn\">Describe your case <span class=\"arr\">\u2192<\/span><\/a>\r\n      <a href=\"tel:+4933555310969\" class=\"phone\">\u260e +49 335 553 10969<\/a>\r\n    <\/div>\r\n  <\/div>\r\n<\/section>\r\n\r\n<footer>\r\n  <div class=\"wrap\">\r\n    <div class=\"foot-grid\">\r\n      <div>\r\n        <div class=\"foot-brand\"><img loading=\"lazy\" decoding=\"async\" src=\"\/wp-content\/themes\/bwlaw-child-1\/assets\/img\/logo-bw.png\" alt=\"Logo BWLAW\" width=\"38\" height=\"26\"><\/div>\r\n        <p>Kanzlei Dr. Barczewski &amp; Dr. Wr\u00f3blewska GbR<br>Rudolf-Breitscheid-Stra\u00dfe 10<br>15230 Frankfurt (Oder), Germany<br><a href=\"tel:+4933555310969\">+49 335 553 10969<\/a> \u00b7 <a href=\"mailto:info@bwlaw.de\">info@bwlaw.de<\/a><\/p>\r\n      <\/div>\r\n      <div>\r\n        <div class=\"foot-h\">Practice areas<\/div>\r\n        <ul>\r\n          <li><a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/construction-law\/\">Construction law and VOB\/B<\/a><\/li>\r\n          <li><a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/employment-law\/\">Employment law<\/a><\/li>\r\n          <li><a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/debt-collection\/\">Debt collection in Germany<\/a><\/li>\r\n          <li><a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/company-formation\/\">Corporate law and company formation<\/a><\/li>\r\n        <\/ul>\r\n      <\/div>\r\n      <div>\r\n        <div class=\"foot-h\">Information<\/div>\r\n        <ul>\r\n          <li><a href=\"\/en\/\">Home<\/a><\/li>\r\n          <li><a href=\"https:\/\/bwlaw.de\/en\/knowledge-base\/\">Knowledge base<\/a><\/li>\r\n          <li><a href=\"https:\/\/bwlaw.de\/en\/impressum\/\">Imprint<\/a><\/li>\r\n          <li><a href=\"https:\/\/bwlaw.de\/en\/privacy-policy\/\">Privacy policy<\/a><\/li>\r\n        <\/ul>\r\n      <\/div>\r\n    <\/div>\r\n    <div class=\"foot-bottom\">\r\n      <span>\u00a9 2026 BWLAW \u00b7 Kanzlei Dr. Barczewski &amp; Dr. Wr\u00f3blewska GbR<\/span>\r\n      <span>Rechtsanw\u00e4lte \u00b7 attorneys \u00b7 Frankfurt (Oder)<\/span>\r\n    <\/div>\r\n  <\/div>\r\n<\/footer>\r\n\r\n<div class=\"sticky-cta\">\r\n  <a href=\"tel:+4933555310969\" class=\"call\">\u260e Call us<\/a>\r\n  <a href=\"https:\/\/bwlaw.de\/en\/practice-areas\/construction-law\/#kontakt\" class=\"book\">Describe your case<\/a>\r\n<\/div>\r\n\r\n<script type=\"application\/ld+json\">\r\n{\r\n  \"@context\": \"https:\/\/schema.org\",\r\n  \"@graph\": [\r\n    {\r\n      \"@type\": \"Article\",\r\n      \"headline\": \"Compensation for a terminated construction contract in Germany \u2014 how not to lose the pay for unperformed works\",\r\n      \"description\": \"Large and small termination payment, the verifiable final invoice, settling from the top with residuals up to 5 per cent, VAT after ECJ C-622\/23 and the formula AWE = T \u00d7 A.\",\r\n      \"inLanguage\": \"en\",\r\n      \"author\": { \"@type\": \"Person\", \"name\": \"Dr. Artur Barczewski\", \"url\": \"https:\/\/bwlaw.de\/en\/team\/artur-barczewski\/\" },\r\n      \"publisher\": { \"@type\": \"LegalService\", \"name\": \"BWLAW \u2013 Kanzlei Dr. Barczewski & Dr. Wr\u00f3blewska GbR\", \"url\": \"https:\/\/bwlaw.de\/\" },\r\n      \"datePublished\": \"2026-07-12\",\r\n      \"dateModified\": \"2026-07-12\",\r\n      \"mainEntityOfPage\": \"https:\/\/bwlaw.de\/en\/knowledge-base\/compensation-terminated-construction-contract-germany\/\"\r\n    },\r\n    {\r\n      \"@type\": \"FAQPage\",\r\n      \"mainEntity\": [\r\n        {\r\n          \"@type\": \"Question\",\r\n          \"name\": \"The principal terminated the contract through no fault of mine. What can I claim?\",\r\n          \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"After a free termination \u2014 the full agreed remuneration, also for the unperformed works, reduced by saved expenses and other earnings (\u00a7 648 sentence 2 BGB, \u00a7 8(1) VOB\/B). The condition is a verifiable final invoice separating the performed from the unperformed works.\" }\r\n        },\r\n        {\r\n          \"@type\": \"Question\",\r\n          \"name\": \"What is the difference between the large and the small termination payment?\",\r\n          \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"The large one covers the remuneration for the entire works \u2014 performed and unperformed \u2014 after deducting savings and other earnings, and is due after a free termination. The small one is the remuneration for the part performed up to the day of termination and remains where the principal terminated for cause.\" }\r\n        },\r\n        {\r\n          \"@type\": \"Question\",\r\n          \"name\": \"Do I charge VAT on the remuneration for unperformed works?\",\r\n          \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"According to the ECJ (judgment of 28 November 2024, C-622\/23) and the Kammergericht \u2014 yes, it is a taxable turnover. The previous contrary line of the BGH and the BFH is considered outdated. Confirm the invoicing details with a tax adviser.\" }\r\n        },\r\n        {\r\n          \"@type\": \"Question\",\r\n          \"name\": \"When may I settle from the top, without a full calculation?\",\r\n          \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"Only where the residual works are worth no more than about 5 per cent of the entire works and the settlement does not conceal calculatory shifts to the principal's disadvantage. Where the insignificance is disputed, the completion costs of a third company are one of the yardsticks.\" }\r\n        },\r\n        {\r\n          \"@type\": \"Question\",\r\n          \"name\": \"How do I present the anderweitiger Erwerb so that the court accepts it?\",\r\n          \"acceptedAnswer\": { \"@type\": \"Answer\", \"text\": \"At the first stage a statement suffices under the formula AWE = T \u00d7 A: the total number of working hours that fell away because of the termination and the gross cost of one working hour of the freed-up workers. If the freed-up capacities could not be used on other jobs, that has to be shown separately.\" }\r\n        }\r\n      ]\r\n    }\r\n  ]\r\n}\r\n<\/script>\r\n","protected":false},"excerpt":{"rendered":"<p>Construction law Debt collection Corporate law Employment law Knowledge base Team Contact a lawyer \u2192 \u2630 Home\/Knowledge base\/Construction Construction Compensation for a terminated construction contract in Germany \u2014 how not to lose the pay for unperformed works The principal terminates the contract, the contractor issues a final invoice over the full amount \u2014 and loses [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":4417,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"template-bwlaw-page.php","meta":{"footnotes":"","rank_math_title":"Compensation for a terminated construction contract | BWLAW","rank_math_description":"Compensation for a terminated construction contract in Germany: verifiable final invoice, the 5 % rule, VAT after ECJ C-622\/23 and the formula AWE = T \u00d7 A.","rank_math_focus_keyword":"compensation for a terminated construction contract","rank_math_robots":[]},"class_list":["post-5050","page","type-page","status-publish","hentry"],"bwlaw_import":{"lang":"en","template":"template-bwlaw-page.php"},"_links":{"self":[{"href":"https:\/\/bwlaw.de\/en\/wp-json\/wp\/v2\/pages\/5050","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bwlaw.de\/en\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/bwlaw.de\/en\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/bwlaw.de\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bwlaw.de\/en\/wp-json\/wp\/v2\/comments?post=5050"}],"version-history":[{"count":0,"href":"https:\/\/bwlaw.de\/en\/wp-json\/wp\/v2\/pages\/5050\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/bwlaw.de\/en\/wp-json\/wp\/v2\/pages\/4417"}],"wp:attachment":[{"href":"https:\/\/bwlaw.de\/en\/wp-json\/wp\/v2\/media?parent=5050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}