When the architect exceeds the cost limit: the client's rights

The client's rights depend first on what was agreed about costs. At its core, case law distinguishes between an expressly agreed Baukostenobergrenze (construction cost cap) and Kostenvorstellungen (cost expectations) that contain no precise limit.

How a budget is agreed so that it holds as a cap is described in the article Agreeing a construction cost cap in the architect's contract. This article deals with the position afterwards.

According to the BGH (Bundesgerichtshof, the Federal Court of Justice), the design is defective "if the architect does not keep to a construction cost cap agreed as a characteristic of the work" (judgment of 13.02.2003, VII ZR 395/01; unofficial translation, as are all quotations in this article). The cap is therefore not merely a wish of the client, but part of what the architect owes.

According to this decision, there is room for manoeuvre only under one condition. "A tolerance margin only comes into consideration if the contract contains indications that the agreed building sum is not meant to be a strict limit." Whether, and to what extent, a tolerance is to be recognised for mere cost expectations is assessed differently. This article therefore gives no percentages; the divergences are set out in the article on cost risks, contingencies and tolerances.

Even without a precise cap, the client is not unprotected. According to the judgment of 21.03.2013 (VII ZR 230/11, according to a published summary of the BGH press release), the architect must already mark out the economic framework in the basic evaluation phase and take account of the client's cost expectations. These are "relevant even if they do not contain a precise upper limit on the building sum". The architect must clear up doubts about their scope.

The courts have drawn different consequences from the defect, depending on the facts of the case. They are to be read side by side, not as a sequence of steps:

• Damages: If an agreed cap is not kept to, a claim for damages under section 634 no. 4 and section 280(1) BGB (Bürgerliches Gesetzbuch, the German Civil Code) comes into consideration according to the judgment of 06.10.2016 (VII ZR 185/13). The amount of the loss depends on the individual case. Whether and how any increase in the value of the building is to be offset is not covered here, because the sources reviewed say nothing on the point.
• Fee only up to the cap: According to the same decision, the architect can only calculate the fee on the basis of the agreed cap; the BGH bases this on section 242 BGB. For the client this means that chargeable costs above the cap do not increase the fee.
• Loss of the fee where the design is unusable: According to the judgment of 21.03.2013 (VII ZR 230/11), the fee claim may lapse if the design cannot be used by the client because of the cost overrun.
• Initial impossibility and repayment: A more recent decision goes further in a special case. The OLG Bamberg (Oberlandesgericht, Higher Regional Court; judgment of 02.10.2025, 12 U 123/24, published on the portal gesetze-bayern.de) treated a budget figure of around EUR 4.2 million set in the competition brief, which could not be met with the space programme, as an agreement on characteristics: "Binding cost expectations of the client count as an agreement on characteristics." The court found initial impossibility (section 275(1) BGB), denied the fee (section 326(1) BGB) and ordered repayment of the interim payment. The decision is not final; proceedings are pending before the BGH under VII ZR 166/25.

The client who relies on a cap bears the burden of pleading and proving it (BGH, VII ZR 185/13, according to the published case notes). The client must therefore show that a cap was agreed, its amount and its scope.

Conversely, the architect must prove that the cap was later raised if the architect relies on that. This is an important relief for the client, but also a warning: every extension of the programme that the client requests and does not document becomes, in a dispute, a question of whether it tacitly raised the budget.

This leads to the key practical point. A cap that exists only in conversations is hard to prove. A cap with amount, cost groups, gross or net and price base in the contract or in a signed approval is not.

1. The unwritten budget. Case law recognises cost expectations even without a precise cap, but every legal consequence presupposes that their content can be proved. A budget that exists only from the first meeting is of little help in a dispute.
2. A changed programme with no trail. If the client has changed floor areas, standards or functions, the basis of the cost determination shifts. Without a dated list of changes, it is hardly possible to separate which part of the overrun is due to the client's wishes and which to the design. How a change in services affects the fee is covered in the article on changes of scope and fee adjustment.
3. Approval without objection. A client who approves a cost calculation above the budget without recording the difference risks this being read as acceptance of the higher figure. The approval should therefore expressly name the variance and say whether it is accepted or to be removed by changing course.
4. Looking too late. Rights arising from a cost overrun only help the client after the loss has occurred. It is more effective to spot the overrun while the design can still be changed.

Case law describes what the client can claim; the project usually needs a decision first. In many cases it makes more economic sense to bring the design back within the budget before tendering than to enforce a claim whose amount will only be settled years later.

The two are not mutually exclusive. The client can change course and at the same time document that the cause of the overrun lay in the design. How this decision is prepared before contract award is covered in the article The cost calculation exceeds the budget: deciding before tendering. Whether a redesign to bring the project back within an agreed cap is to be paid for separately should be clarified legally before it is commissioned.

For proof, the file is what counts. The contract stating the budget, the approval in the target-finding phase, every approval with scope and price base, the list of programme changes and the cost determinations in their dated versions together form the basis on which a claim can be examined.