In 1973 as the general building contractor for the District of M the plaintiff built a centre for the disabled. The plaintiff delegated to the defendant the tiling operation of the proposed structure. For this purpose they agreed that the standard contract VOB\B (1952) should apply, but they made special provision concerning delivery and conditions and warranties in respect of legal or physical defects. According to the list of work to be done, the surrounds of the swimming pool of the Special School were to be covered with tiles made of artificial stone which were to be ‘non-slip as a cover of the bottom’.

The architect K, who was appointed by the District of M, selected the tiles from samples submitted by the defendant.
When the swimming pool was opened, it appeared that the tiles submitted by the defendant did not prevent slipping. At first the District asked the plaintiff to remedy the defect free of cost. The plaintiff refused and referred the District to its remedy against the architect.

Thereupon the District instructed the plaintiff by an additional contract and against further payment to replace the unsuitable tiles by others which prevented slipping. The plaintiff once again employed the defendant for the fixed price of DM 7992 and received in return DM 9000 from the District. To the latter extent the District claimed damages from the architect on the ground that he made a mistake in selecting the tiles. The latter’s Insurance Company paid this sum in full and in subsequent proceedings sued the plaintiff for the payment of two-thirds of this amount. The District Court of Essen, by a decision of 5 November 1976 condemned the plaintiff to pay one half of the amount (i.e. DM 4500). The plaintiff accepted this and, in turn, claimed compensation from the defendant.

The District Court rejected the claim. The Court of Appeal of Düsseldorf gave judgment in favour of the plaintiff for DM 1500. Upon leave to lodge a second appeal the judgment of the District Court was restored.

Reasons

The Court of Appeal allowed the plaintiff’s claim to the extent of one half of the sum paid to the Insurance Company of the architect on the ground that the defendant’s performance was fundamentally defective in the meaning of § 13 nos. 1 and 7 of the standard contract. It held that in selecting the tiles both the defendant as well as the clerk of the works had failed, in violation of their duty according to § 4 no. 3 of the standard contract, to make an examination and to give advice; as a result the work had been defective.

The liability of the defendant in respect of defects was not ruled out by the fact that the plaintiff had not asked the defendant to remedy the defect. It was true that, had the owner of the building sued the plaintiff as the principal contractor for damages in respect of defects, the plaintiff would have been obliged to give the defendant in his capacity of sub-contractor the opportunity to make good the defect. However, instead of asking for the defects to be remedied the District M had instructed the plaintiff to replace the defective tiles by non-slip tiles and had demanded with justification that the architect should pay for the expenses in remedying the defects. In the opinion of the Court of Appeal the plaintiff had been under an obligation to compensate in part the architect’s insurance company and had been unable to rely in relation to the latter, upon its right to ask for the defect to be removed—even if the claims of limitations or if liability had been restricted by agreement. As between the principal building contractor and the sub-contractor it would be inequitable if the latter, who was the real cause of the damage, could effectively plead that he had not been asked to remedy the defect, while the principal contractor was precluded from relying on this defence. If the latter was liable to pay, he should also be entitled to hold the sub-contractor liable for the consequence of the defect.

The conclusions of the Court of Appeal cannot be accepted. They are contrary to the particular legal nature of sub-contracting.

1. Since no question arises as to claims sounding in tort, the plaintiff’s claims against the defendant can only result from the instructions given on 4 April 1973. The contract of the general or principal building contractor with the sub-contractor is an independent contract to perform building operations; it creates mutual rights and duties which are independent of those which may exist between the owner of the building or others connected with the building operation and the principal building contractor and of the extent to which they rely on them [references].

The liability of the principal building contractor does not as such have any repercussions upon his contractual relationship with the sub-contractor. Neither the letter appointing the sub-contractor nor the documents accompanying the contract provide, in addition to liability for defects, for liability of the sub-contractor by way of recourse in the sense that he must assume liability for pecuniary obligations of the principal contractor, if the sub-contractor is liable in the last resort for the basis of this obligation. Such a right of recourse cannot be derived either from a general liability for a breach of contract by a positive act. If the breach of contractual duties to examine and to advise does not result in more than a defective performance, any liability of the sub-contractor—as the Court of Appeal does not fail to recognize—can only be based on the responsibility for defective performance (see §§ 4 no. 3 and 13 no. 3 of the standard contract); it cannot be based in addition on the failure to observe the general duty to protect the other party to the contract against loss [references].

2. Since the defendant fitted tiles on the surround of the swimming pool which were not anti-slip and thus were contrary to the contract and unsuitable, without having drawn the attention of the plaintiff that the tiles selected by the architect in the presence of the clerk of the works were unsuitable, the plaintiff has a claim to have the tiles replaced or—if the defendant should refuse to do so—for damages in remedying the defect. However, the plaintiff has forfeited this claim not only because he failed to invite the defendant to remedy the defect, as required by § 13 no. 7 of the standard contract [reference], but also because he gave additional instructions, accompanied by the promise of payment, to exchange the tiles for others [reference]. Thereby any claim for damages according to § 13 no. 7 of the standard contract was lost [reference].

3. It is true that the principal contractor is liable for the culpable acts of the sub-contractor as his aid in performing the contract; however they are not co-debtors of the owner of the building and of others connected therewith as regards their liability for defects. The sub-contractor owes his duty to the main contractor, not to the owner of the building, and thus § 421 BGB does not apply. A claim by the architect of the building owner against the main contractor for partial compensation cannot therefore be brought against the sub-contractor at the same time. The plaintiff, too, did not acquire a claim for partial compensation against the defendant by repaying to the architect and his insurance company half of the expenses in remedying the defects.

4. The plaintiff cannot either base his claim on considerations of equity.

(a) It is true that according to § 242 BGB reasons of equity may result in the reduction or even in the rejection of claims.

On the other hand, reasons of equity cannot create claims which do not exist in law or in contract [reference].

(b) The rejection of the claim by the District Court is also not inequitable.

When the plaintiff received, on 20 June 1974, the additional order, he was not prevented from requesting the defendant to replace the tiles on the ground of liability for defects, seeing that they were clearly defective [references]. If the plaintiff should have regarded this as inequitable, having regard to the additional order received from the owner of the building, he could at least have reserved his right of recourse, in case the architect who was involved in the wrong selection should be sued by the owner of the building in respect of the defects in the building which were partly caused by the architect, but by the architect, who would ask for partial compensation, if sued by the owner of the building. A main or general contractor can provide adequately for such a risk in his contracts with the sub-contractors. If he fails to do so, he cannot shift the legal consequences to the sub-contractor on the ground that they are inequitable.

The plaintiff as the main contractor has received a higher remuneration than the sub-contractor in respect of the same performance. The fact that as the main contractor he received a higher remuneration is justified, in particular, by the higher risk run by the main contractor as a co-debtor side by side with the architect and other specialists.

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