The Practical Conflict
A cleaning company carries out building maintenance using its own staff, under its own organisation, without day-to-day instruction from the client. The building is clean. The invoice, however, arrives back as a reduced payment — with the explanation that the productive hours stated in the tender or the contract were not performed. The cleaning company objects: it owes a result, not a fixed number of hours. The client insists: the hours are part of the agreed scope, and their performance is an obligation.
This dispute is common in the sector. It arises in routine maintenance cleaning, in specialist cleaning, in publicly procured contracts, and in long-term private commercial relationships. It has a clear legal structure — though one that, at the margins, is highly sensitive to the exact wording of the contract in question.
Works Contract or Service Contract — The Legal Distinction Under the BGB
German civil law distinguishes between the service contract (Dienstvertrag, §§ 611 ff. BGB), under which the contractor owes the act of performing — irrespective of the outcome — and the works contract (Werkvertrag, §§ 631 ff. BGB), under which a specific result is owed. Under a service contract, the contractor's obligation is discharged when the activity has been carried out. Under a works contract, it is not discharged until the agreed work has been completed. The distinction follows not the label the parties have chosen but their actual intentions and the structure of what has been agreed.
The Federal Court of Justice (Bundesgerichtshof, BGH) has settled this classification question for the building cleaning sector in a consistent line of decisions. As early as its judgment of 6 June 2013 (BGH, VII ZR 355/12), the Seventh Civil Senate stated that the critical question is whether the contractor owes a service as such or owes the result of that service. Neither periodic flat-rate remuneration nor the ongoing nature of the performance prevents a contract from being classified as a works contract.
In its judgment of 10 October 2019 (BGH, VII ZR 1/19, BGHZ 223, 260), the Senate went further, explicitly characterising a cleaning agreement as a "continuing obligation structured as a works contract." The case arose from Berlin's extraordinary termination of three cleaning contracts on grounds of deficient performance, with subsequent claims for the additional costs of engaging replacement contractors. The Court resolved not only the contract classification but also a limitation question of practical importance to public authorities: consequential termination losses — the premium costs of re-procurement — are subject to the general three-year limitation period under §§ 195, 199 BGB, not to the special works contract limitation provisions of § 634a BGB. This distinction frequently determines whether a public client's claim is still enforceable.
The governing principle may be stated as follows: a contractor who owes a state of cleanliness using self-selected staff, without being subject to the client's direction as to how the work is carried out, has entered into a works contract. The acceptance requirement under § 640 BGB does not apply to ongoing cleaning services by their very nature, in accordance with § 646 BGB — in its place stands the completion of each periodic unit of performance.
What Hours Mean in a Works Contract — and What They Do Not
The substantive question in practice is not whether a cleaning contract is a works contract. For the standard case, that is settled. The substantive question is: what legal function do the hours stated in the tender, the price schedule, or the scope of works actually perform?
A clear distinction is necessary between three categories:
- Pricing calculation: The contractor has calculated internally how many hours the cleaning will require. This figure feeds into the price. It may appear in price schedules or in the tender documents, but it does not create an independent contractual obligation.
- Performance benchmark and audit instrument: Performance ratios such as m²/hour or hourly allocations per site serve, particularly in public procurement, as tools for assessing the plausibility of prices and for monitoring contractual performance — not as a basis for independent attendance requirements.
- Express contractual obligation: The contractor has committed to delivering a specific number of productive hours as an independent obligation alongside the cleaning result, with separately defined consequences for shortfalls.
The difference between these three categories is decisive. The Cologne Court of Appeal addressed this distinction directly in its decisions of 12 April 2012 (Az. 19 U 215/11) and 12 July 2012 (Az. 5 U 30/12): beyond the cleaning result owed under the works contract, no additional obligation to perform the monthly hours stated in price schedules arises without more. The Cologne Regional Court, in the first instance (10 January 2012, Az. 5 O 51/11), had found that minimum hours are no more than a calculation basis, and that providing fewer hours while delivering a compliant clean does not constitute deficient performance. The Bonn Regional Court, in a parallel case (28 November 2011, Az. 1 O 154/11), found that a standard terms clause elevating minimum hours to an independent main obligation, with a deduction linked to shortfalls, violated § 307 paras. 1 and 2 BGB.
This is the dominant line, and it protects the contractor: where the cleaning standard is met, no particular number of hours is owed.
The Counterargument: Where Hours Can Become Binding
The case law is not uniform at one important point — and this reflects the principle of contractual autonomy, not an inconsistency in the courts.
The Hamm Court of Appeal, in its judgment of 28 November 2017 (Az. I-24 U 120/16), decided a case in which the parties had expressly incorporated a specific hourly performance as a contractual obligation alongside the cleaning result and had agreed a flat 15% deduction in the event of shortfalls. The Senate classified the contract as a mixed-type agreement — combining elements of both works and service contract — and upheld the deduction clause. Its reasoning: deficient performance consists not only in a failure to achieve the cleaning result but also in a failure to provide the contractually agreed hours. On facts showing an approximately 15% shortfall in hours, a deduction of nearly €79,000 was justified — notwithstanding the absence of any quality complaint.
The Düsseldorf Court of Appeal, in its reference ruling of 12 July 2021 (Az. I-22 U 8/21), examined a comparable situation arising out of a public procurement. The contractor had tendered productive hours and was contractually bound by them. The Senate held that the productive hours obligation was compatible with the contract's classification as a works contract: the hours were intended to underpin quality, so the result-oriented character of the agreement was preserved. At the same time, the Senate recognised that the productive hours obligation constituted an independent primary performance obligation alongside the cleaning result, falling outside the substantive fairness review under § 307 para. 3 BGB and subject only to the transparency requirement.
The message from these decisions is precise: hours can become binding — but only if the contract clearly says so. Where they were merely calculated, estimated, or applied internally to the pricing, the works contract principle prevails: what is owed is the result.
Invoice Deductions: The Conditions That Must Be Met
From the case law, three cumulative conditions emerge for an invoice deduction based on hourly shortfalls to be legally sustainable:
First: An express contractual obligation to perform the hours
The agreed number of hours must be established as an independent main obligation — not merely as a pricing basis or a line item in a price schedule. A figure in a tender document or a unit price in a schedule of rates is insufficient. The contract must expressly state that the specified hours must be performed, not merely that they underlie the calculation.
Second: A transparent deduction clause
The legal consequences of a shortfall must be defined clearly, comprehensibly, and without internal contradiction. A clause that leaves open whether hours are a primary obligation or a planning parameter fails the transparency requirement under § 307 para. 1 sentence 2 BGB. The trigger for the deduction, the basis of calculation, and the resulting consequence must all be precisely determined.
Third: Compliance with Germany's standard terms control rules
Where the clause forms part of standard terms — which is the norm in cleaning contracts — it is subject to the fairness review under §§ 307 ff. BGB. Several provisions are particularly relevant:
- § 309 No. 5 BGB: A flat-rate deduction characterised as liquidated damages is only permissible if it does not exceed the typically expected loss and if the other party is expressly permitted to demonstrate that no loss, or a lesser loss, has in fact occurred. The absence of a countervailing proof provision renders the clause invalid. Where cleaning has been carried out to standard, a shortfall in hours frequently causes no measurable loss — which makes a flat-rate deduction structurally vulnerable.
- § 309 No. 6 BGB: Where the deduction is designed primarily to enforce compliance with the hours obligation rather than to compensate a loss, it approaches the character of a contractual penalty, with the stricter requirements that follow.
- § 307 para. 1 sentence 1 BGB: A clause that subjects the contractor to an immediate deduction without an opportunity to remedy or without prior notice of deficiency may constitute an unreasonable disadvantage. The Cologne Court of Appeal found in its judgment of 24 November 2016 (Az. 7 U 77/16) that a clause entitling the client to a flat-rate reduction without first requiring rectification was invalid under § 307 para. 1 BGB.
The Hamm Court of Appeal's 2017 decision set the outer boundary of validity: a 15% flat deduction is sustainable where the hours obligation is transparently established as an additional primary obligation, where the deduction is offset by correspondingly higher remuneration, and where the interplay between the two obligations is clearly structured in the contract.
The Relationship to Reduction and Damages Claims
Independently of deduction clauses, the question arises whether a client can achieve a comparable outcome through the works contract's defects remedies — reduction of the price under § 638 BGB or damages under §§ 634, 280 BGB.
Reduction requires a defect within the meaning of § 633 BGB. If the cleaning has been carried out properly — if the premises correspond to the contractually agreed condition — no defect exists. A mere shortfall in hours, without any quality deficiency, does not constitute a defect. The Hamm Court of Appeal confirmed this in its judgment of 19 April 2024 (Az. 12 U 9/23): the contractor's primary obligation is typically to produce the cleaning result, not to perform a particular number of hours. A reduction claim cannot be pursued without first affording the contractor an opportunity to remedy.
A claim for damages in lieu of performance (§§ 280 paras. 1, 3, 281, 634 No. 4 BGB) generally requires prior notice and an opportunity to remedy. Damages alongside performance (§ 280 para. 1 BGB) for consequential losses caused by defects does not require a prior notice, but still requires a defect. Where the cleaning is compliant, there is no compensable loss. The mere fact that fewer hours were worked than initially calculated does not create a loss where the cleaning outcome is contractually conformant.
The same logic applies to the right of retention: § 641 para. 3 BGB allows the client to withhold twice the estimated cost of remedying defects — but only where a defect actually exists. A shortfall in hours without contractual foundation creates no right of retention.
The Public Procurement Dimension
For publicly procured cleaning services, an additional layer applies. In procurement proceedings, hourly rates, productive hours, and performance benchmarks play a significant role — primarily, however, for the purposes of price calculation and assessment of abnormally low tenders, not for establishing an independent attendance obligation.
The Düsseldorf Procurement Senate addressed this directly in its ruling of 17 January 2013 (Az. VII-Verg 35/12), in the context of outcome-based cleaning specifications used by the BLB NRW (North Rhine-Westphalia State Property Authority). The Senate found that under that specification model, no daily hours to be worked were prescribed: it rested exclusively with the contractor to determine the type and extent of cleaning required to deliver the contractually specified result. A parallel ruling of 7 November 2012 (Az. VII-Verg 24/12) by the same Senate characterised this arrangement by noting that the risk of performance lay entirely with the contractor. Annualised productive hours stated in tender documents were not to be read as daily attendance requirements.
On the assessment of abnormally low tenders under § 60 VgV, the same Senate ruled on 12 April 2023 (Az. VII-Verg 26/22) that performance ratios expressed in m²/h are independently subject to clarification obligations where a submitted price falls 20% below the next-lowest bid — a threshold derived from the Federal Court of Justice's judgment of 31 January 2017 (Az. X ZB 10/16). Performance ratios may also serve as qualitative award criteria in procurement, provided this is announced transparently in advance.
In publicly procured contracts, it is therefore essential to examine precisely what function hours and productive hours were intended to serve in the scope of services: were they a basis for pricing and a mechanism for assessing tender plausibility — or were they expressly imported into the contract as a binding performance parameter? The Düsseldorf Court of Appeal's 2021 decision worked through this distinction on the specific facts and classified the productive hours obligation as an independent primary obligation, while maintaining the works contract classification overall.
Three Consistent Lines of Case Law
The case law organises itself into three coherent lines that do not contradict one another but respond to different contractual structures:
Line 1: Works contract without an hours obligation
The position here is clear. The BGH (VII ZR 1/19; VII ZR 355/12), the Hamm Court of Appeal (12 U 9/23), the Cologne Court of Appeal (19 U 215/11; 5 U 30/12), and the Cologne Regional Court (5 O 51/11) uniformly hold that the mere existence of calculated hours does not create an independent primary obligation. Where performance is compliant, deductions based on hourly shortfalls are not available. Reduction is possible only through §§ 634 No. 3, 638 BGB — that is, where a defect has been established and a rectification period has elapsed without result.
Line 2: Mixed-type contract with an express hours obligation
Where the hours obligation has been clearly agreed as an independent primary obligation, the Hamm Court of Appeal (24 U 120/16) and the Düsseldorf Court of Appeal (22 U 8/21) have upheld hourly deduction clauses in principle — provided they are transparent and satisfy the requirements of the standard terms control regime. The classification as a works contract is not displaced by this.
Line 3: The outer limit of standard terms validity
Even where hours have been expressly agreed as a primary obligation, the standard terms rules impose constraints. The Bonn Regional Court (1 O 154/11), the Cologne Court of Appeal (7 U 77/16), and the BGH in VII ZR 355/12 (headnote c) confirm that flat deductions without prior notice, without opportunity for rectification, and without a countervailing proof provision fail under §§ 307 ff. BGB — regardless of how the hours obligation has been framed.
Assessment of the Arguments on Both Sides
The contractor's arguments rest on a stronger base in the case law. The works contract principle — the result is owed, not the hours — is firmly established by the BGH and the courts of appeal. Where the cleaning is compliant, there is no defect; and without a defect, there is no claim in reduction, no claim in damages, and no right of retention. Deductions resting solely on hourly shortfalls, without a clear contractual basis, are legally vulnerable.
The client's arguments are not inherently without merit — but they depend on strict conditions being satisfied. A client who intends to deduct for hourly shortfalls must get three things right simultaneously: the hours obligation must be expressly agreed as an independent primary obligation; the deduction clause must be transparent and unambiguous; and it must survive the standard terms review, including the countervailing proof requirement of § 309 No. 5 BGB.
What frequently happens in practice satisfies none of these conditions: hourly figures in price schedules or scope-of-works documents are retrospectively treated as performance obligations, without this having been agreed at the time of contracting. That approach fails against the Cologne and Hamm courts' reasoning and against the BGH's judgment of 2019.
Practical Conclusions for Contract Drafting and Ongoing Agreements
For clients who wish to make hourly deductions contractually enforceable, the case law sets out a clear agenda: the hours obligation must be formulated expressly, unambiguously, and as an independent primary performance obligation alongside the cleaning result. The deduction clause must define transparently the trigger, the method of calculation, and the resulting consequence. And the flat-rate deduction must comply with § 309 No. 5 BGB — with an express opportunity for the contractor to demonstrate that the actual loss is lower. Clients who do not secure all three elements will face significant difficulty in enforcing deductions.
For contractors: the works contract framework is firmly established. A contractor who delivers a compliant cleaning result does not owe a specific number of hours unless the contract expressly and clearly provides otherwise. Deductions resting solely on hourly shortfalls are challengeable without a proper contractual basis — but only if the contractor understands the specific contract provisions and can clearly articulate why the basis for the deduction is absent.
For contracts already in force in which hourly deductions are being practised, the analysis depends on the precise contract wording. The questions are: has an hours obligation been expressly agreed? Is the deduction clause transparent and compliant with the standard terms rules? Has a countervailing proof opportunity been built in? Where these conditions are not met, the deduction is challengeable — regardless of whether it has been accepted without objection over a period of years.
The hour remains what it has always been in a cleaning contract: a pricing parameter. Those who wish to make it a performance obligation must say so clearly, transparently, and within the limits set by German contract law.