Project, Turn-key and und Consortium Contracts

Project contracts

Project contracts cover orders that exceed the delivery of individual objects or services. A project potentially consists of a number of delivery objects to be bought or produced as well as various services and, in particular, software modules.

A project contract may, for example, be an agreement on the introduction of an enterprise resource planning (ERP) system consisting of hardware, standard software components and software adaptation services. A project contract may also cover the development of a certain machine with various interfaces to third party trades.

General contractor agreement

With a general contractor agreement, one contractor takes on the sole responsibility towards the client for the fulfilment of a contract covering various components and services, which the general contractor has to buy or sub-contract from third party companies. The advantage for the client is having a single point of contact and responsibility. The advantage for the general contractor is that he gets paid a fee for taking on the general responsibility.

Consortium contracts

Consortium contracts are characterised by the fact that two or more companies engage jointly and severally to deliver e.g. a machine park or realise a building project. Should one of the contractors not fulfil its obligation, the client can hold the other contractors liable. The client’s advantage is a wider distribution of risk. The contractors, on the other hands, are enabled by such contracts to take part in a project which they could not have handled on their own.

Turn-key contract

With a turn-key contract the contractor takes on the responsibility for handling a plant including all sub-systems over to the client ready for use. The contractor may either be a general contractor or a consortium. Purpose of the contract is handing over a ‘turn-key’ project. The client can thus transfer risks, in particular planning or co-ordinating risks, to the contractor. The contractor, on the other hand, will get payment for this additional responsibility.

Our Services:

Drafting, examining and negotiating project, general contractor, consortium and turn-key contracts in either German or English
Legal advice during the implementation of such contracts, contract management
Legal advice in adjustments, arbitrations or mediations

International and German Contract Law

Far from being a sign of distrust, written contracts are a sign of professionalism. The “handshake” between business partners has become the exception in our world of increasingly complex business relationships. Written agreements are a must with long-term and international business relationships. They offer security and prevent unnecessary misunderstandings and conflicts.

German civil law is governed by the principle of freedom of contract. It is up to the individual person whether or with whom they enter into a contract, what the contract is going to look like and whether it is terminated again. The legislator provides for different types of contract but allows space for their definition. This space is only limited by protective provisions.

In the last few years, reforms in connection with the implementation of European directives have led to far-reaching changes in contract law. For example, new types of contracts resulting from the development to an information society have been legally regularised for the first time. In addition, consumer protection has been significantly improved and warranty law and statutes of limitation have been reformed. The German law on terms and conditions (Allgemeine Geschäftsbedingungen) has been cancelled and its provisions have been modified and integrated into the German Civil Code.

When entering into a contract, a company and its representatives should not leave anything to chance. Partners to a contract are usually happy to have come to an understanding that, at the beginning of their co-operation, they do not want to think of disagreement, legal action or the termination of the agreement. But the quality of a contract only becomes apparent when the partners to this contract cease to agree on every single point.

Suddenly it is not only the exact wording of contract provisions and terms and conditions which plays an important role but also the question by which law the contract is governed and where the place and what the court of jurisdiction is.

Choice of law and place of jurisdiction not only tend to influence the chances of enforcing a claim. If you have to call in lawyers in another country, must have submissions translated or attend court sessions and other meetings in another place, costs can be significant and the outcome uncertain.

A good contract has a systematic composition, a logical structure and contains clear and complete agreements. We know the possible pitfalls, stumbling-blocks and issues involved and we advise and accompany companies in their national and international business ventures, in particular by drafting terms and conditions as well as purchase, sales and co-operation contracts that do justice to the interests involved.

Our services:

Drafting, examining and negotiating contracts and agreements in an international context
Drafting and examining terms and conditions for international business transactions
Co-ordination and evaluation of information given on foreign law issues
Legal advice and support for and during litigation abroad in co-operation with local law firms