Plant Engineering & Construction Law

Case study – Plant Engineering & Construction Law

1) The case

Background

Acceptance is blocked, €1.5 million is at a standstill. The customer labels subsequent requests as “defects”. I draw a clear line between the agreed quality and the wish list, present a court-proof inspection program, base the acceptance on this and secure the facts – this is how we open the way to payment.

The case

On 10 March 2024, a beverage manufacturer commissioned a turnkey filling and packaging line for €8 million. The core of the specification: 24,000 bottles per hour at 0.5 l. Open points remained regarding format range, permissible reject rates, maximum changeover times and boundary conditions. Acceptance was agreed, but no binding test programme was defined. An interim payment of €1.5 million was expressly linked to successful acceptance.

On commissioning, peak output is reached only briefly. At the 0.33-l format it is well below target. Changeover times are longer than expected. Data evaluation is incomplete. The purchaser demands additional buffer capacity, higher-grade components and bespoke analytics, treats these as part of the agreed scope and alleges “defects”. An acceptance run fails because no clear benchmark was defined. The purchaser refuses acceptance and asserts counterclaims in the amount of > € 1.5 million:

• 300,000 € Contractual penalty Default
• 400,000 € contractual penalty Failure to achieve performance
• 1,000,000 € operating loss (plus other items)

Stalemate.

2) How I help the plant manufacturer

I structure the contract and project documents to clearly separate agreed specifications, boundary conditions and subsequent requests.Based on this, On this basis, I submit a written proposal for a testing and acceptance programme: two reference formats (0.5 l / 0.33 l), defined runtime across several shifts, threshold values for failures, rejects and changeover times, specified material and media qualities, and a clear protocol format. At the same time, I declare readiness for acceptance and set a deadline for its execution.

If the deadline expires without a specific, significant notice of defects, acceptance is deemed to have taken place (fiction of acceptance under § 640(2) BGB). Minor issues do not prevent acceptance; where separable, I demand partial acceptances to trigger partial payments. In parallel, I secure records of conditions, protocols, run and downtime, configurations and documented test runs. Where information may be lost or a neutral finding is decisive, I apply for independent evidentiary proceedings – either to preserve the current state of the plant or as a neutral performance verification under precisely this programme.
For the payment stream, I prepare litigation: primarily for payment of the acceptance instalment (based on readiness for acceptance or deemed acceptance), alternatively for an order to carry out acceptance; depending on the case, in parallel with evidentiary proceedings. I rebut counterclaims by tracing them back to their prerequisites: absence of an agreed benchmark, deficiencies in the purchaser’s cooperation, causation, duty to mitigate damages. Requests without contractual basis do not constitute a defect and are only to be performed against additional remuneration and schedule extension.

3) Result

We enforce either a verifiable acceptance or its legal fiction, thereby achieving (partial) maturity and triggering the €1.5 million payment flow. Exaggerated counterclaims shrink to what is legally sustainable: I completely defend against business interruption damages – they regularly fail for lack of proven causation and breach of the duty to mitigate. Without an agreed performance benchmark, they also lack any contractual basis. Contractual penalties lapse for want of a viable standard and due to the purchaser’s cooperation deficits – or are reduced to a minimum.