A stalled or insolvent project requires a controlled transition. We assess termination grounds, notice requirements, payment consequences and the practical arrangements needed to secure the site and complete the work.
Identify the right to end or suspend performance
Termination for convenience, termination for cause and a statutory response to missing security have different requirements and financial consequences. A threatened insolvency does not make every termination clause effective. Review the contract, facts and applicable insolvency rules before taking an irreversible step.
Section 650h BGB requires written form for termination of a construction contract. Ordinary email alone should not be assumed sufficient. Required warnings, cure periods, authority to sign and receipt need careful handling.
Record the position at termination
Establish the completed work, defects, materials, design documents and site condition. A joint record can reduce later disputes over valuation and responsibility. Coordinate access, insurance, safety and the rights needed by a replacement contractor.
Protect claims and completion options
For an insolvent counterparty, separate existing claims, security, ownership rights and the treatment of ongoing contracts. The insolvency administrator’s position and election rights can be important. Filing a claim does not replace the steps needed to protect a guarantee or recover property.
Four practical examples
Illustrative scenarios: the appropriate steps depend on the contract, evidence and applicable law. These are not reports of client matters.
The employer stops the project
A commercial decision ends the works. Calculate the convenience-termination account rather than assuming only completed work is payable.
Repeated non-performance
A contractor misses critical obligations. Review the seriousness of the breach and any required opportunity to cure.
A supplier becomes insolvent
Paid-for equipment is still at the supplier’s factory. Examine title, identification and security before assuming it can be collected.
A replacement contractor takes over
Urgent completion is necessary. Preserve evidence and define the remaining scope and interfaces before the replacement starts.
Documents that help us assess your position
The full contract, warnings, payment and security records, insolvency information, site inventory, programme and proposed termination notice.
Discuss your project or dispute
Tell us where the project is located, who is involved and whether a deadline is approaching. We can then clarify the scope of the proposed engagement and the next steps.
Related construction law services
Legal framework & further reading
- German Civil Code, section 648
- German Civil Code, section 648a
- German Civil Code, section 650h
- Insolvency Code, section 103
Reviewed: 12 November 2026. Statutory references are to German law unless stated otherwise.