What is a contract for work?
Contracts for work make it possible to order a specific work, to remunerate the effort required to produce the work and to offer both parties security. That's a bit much for a single contract, but that's what a contract for work and labour means in a nutshell.
- The contract for work and labour at a glance
- Work contract definition
- Contract for work and labour - practical examples
- Key features of a contract for work and labour
- What belongs in a contract for work
- The special forms of a contract for work and labour
- Cancelling a contract for work
- Why a contract for work?
The contract for work and labour at a glance
A contract for work is something that covers a taxi journey, a new software programme for the office or the construction of a house. This means that in each of these cases something is created and in each case there is an expense that is also remunerated in each case. To summarise at a glance, a contract for work serves to secure or order an entrepreneurial activity. There are two parties, a client and a contractor. The client wants a work to be created, which is then carried out by the contractor.
The exact nature of the work is set out in the contract. It also includes contingencies. This includes what is to be done if the work does not fulfil the order or is no longer required. On the other hand, the remuneration is also regulated. This includes regulations on when acceptance of the work takes place and how to respond to any defects. There are also special provisions for certain contracts for work.
What is important in a contract for work and labour is that the focus is on the completed work. It is not necessarily the labour performance or similar that is important, but that what was ordered as a work is created in accordance with the order.
In contrast, a service contract only provides a service. In this case, it is not important whether this service leads to a successful end or whether the end meets the client's expectations.
Remuneration in contracts for work is based on the usual rates, which vary from region to region. In addition, they are a popular way of working with freelancers. They offer a great deal of flexibility and shift the entrepreneurial risk to the contractor.
Work contract definition
Now that we have familiarised ourselves superficially with the more general aspects of a contract for work and services, it is time to look at it in a little more depth. The law on contracts for work and labour is regulated in BGB §§ 631 ff. According to this, it is a contract in which a contractor undertakes to produce a specific work for the client. In return, the client undertakes to pay a fee for this work.
With this definition, it is immediately clear that the aim is to produce a finished end state. This may be a complete painting, a house or a successful taxi journey home. It is not about spending time and providing a service. The fee is based on the result, not the duration of the work.
The contract for work is therefore directly concerned with the objective, the completed work. To ensure that this actually meets the client's requirements, the law provides for an acceptance procedure. This means that the client can now inspect the work and determine that it meets the specifications of the order. Only if the acceptance is successful is there an obligation to pay for the work in return. It is clear to see here that the payment is for the completed work - not for the time spent.
The contractor is independent in the processing of the order. This means that he can decide for himself when, with which resources and by which means he produces the work. The contractor is not bound by instructions from the client.
Contract for work and labour - practical examples
Contracts for work and labour are used as part of a business activity and are important for both entrepreneurs and private individuals. Classic use cases are
- Construction work, renovations, maintenance
- Artistic and technical services
- Travelling and transport
- The programming, installation, implementation and modification of software and its systems
- Intellectual work, such as ghostwriting
Key features of a contract for work and labour
A contract for work and labour has certain characteristics that look like this in detail:
Objective of the contract for work
A contract for work and labour is not about performing work as such. From a general perspective, it is irrelevant to the contract how much effort is required to complete the work or the nature of this effort. The contractor decides on its working hours and the resources used.
Of course, the reality is that the contractor calculates its expenses and uses this as the basis for the amount of the fee. However, he does not have to specify or justify to the client why he expects the fee to be this amount. It is a question of negotiation between the two parties.
At the end of the day, it's about delivering a work result and doing so within a period of time that has been defined in advance. Only this determines the success or failure of the assignment - not whether more or fewer resources were used in any way.
The order in the contract for work
The contract for work is characterised by the fact that a work is ordered. This work must of course be described accordingly. In the end, it does not matter whether the result actually achieved corresponds to the customer's expectations. It merely has to correspond to the description of the desired work as contained in the contract.
In addition to the description of the work, it must also be specified how, when and where the delivery is to take place. This is therefore also part of the success and the acceptance of the work by the client begins with it.
The independence of the contractor
The contractor himself is responsible to the client for producing the work as ordered. This means that he also bears the risk of success. If this does not materialise, the effort with which he has attempted to bring about the result is not remunerated.
The contractor works entirely with his own resources when creating the work. It is up to him to decide which resources he uses, how much time he spends and how he plans this effort.
Acceptance of the work by the client
If the contractor is of the opinion that the work has now been completed and fulfils the client's requirements, he presents it for acceptance. Otherwise, a presentation for acceptance is always necessary when the contractually stipulated moment has arrived.
The client now has time to check the work and decide whether it fulfils the requirements of the order. If this is the case, he accepts the work and the contractor's contractual obligation is fulfilled.
The fee
As a rule, payment is due in full after successful acceptance of the work by the client. However, this can be deviated from. Payment in milestones is possible, especially for longer and more complicated works. This means that the work is created step by step and partial payment is made upon completion of an important step.
What belongs in a contract for work
As already mentioned, the contract for work and labour is regulated in §§ 631 ff of the German Civil Code. Everything that is set out in these laws does not have to be included in each individual contract for work and labour.
However, what belongs in the contract for work and labour are all regulations that either deviate from, tighten up or define more precisely the legal template. This relates in particular to the procedures for acceptance and in the event of a conflict, for example if the work does not comply with the order.
What absolutely must be regulated in the contract for work is the end result that is to be achieved. Of course, in simple cases such as a taxi journey, there is no need to draw up a long contract text with an extensive description of when the passenger will arrive home. However, for another work such as a house, a private yacht or the new software programme for the office, a description that is as precise as possible is essential.
It is important to understand that conflicts are usually the result of orders that have not been described clearly enough. For this reason, model contracts, for example, should be used with caution. They provide a good framework for the actual work contract, but they must be supplemented by a precise description of the desired work.
Dhe contract for work must contain these points:
The description of the work
The work to be created must be described as precisely as possible. This also includes the material used, the performance of a system, the technical description and other features associated with it.
This also includes all preliminary and ancillary services. An example of this is the provision by the client of technical information on the system with which the plant must work. Training materials may need to be provided to familiarise employees at the client's plant with a new system.
The delivery date
The deadline must be set in advance to ensure a smooth acceptance process. If the work consists of several parts, partial results must be defined and separate deadlines set for these. If necessary, it is also possible to remain flexible here and instead arrange appointments at which information on the status of the work must be provided.
The form of delivery
The form of delivery must also be agreed. There are various options depending on the work. For example, this can be an e-mail attachment for a softcopy, a paper printout for a book or delivery by parcel service.
The fee
Not only should the fee be specified in advance, it should also contain certain information. First and foremost, this includes VAT. However, there are also costs for additional services that should be listed here. In other words, these are services that go beyond the actual creation of the work. These include, for example, travelling expenses, costs for special requests, extra materials and more.
A payment agreement
There are also agreements for the payment of the fee itself. These include, for example, instalment payments for larger orders. Other agreements relate to discounts for fast payments, the use of certain payment methods and compliance with certain payment deadlines.
Acceptance of the work
Acceptance takes place at the end of the creation of the work. This usually takes place on the agreed acceptance date. From this moment on, the client has 30 days to inspect the work and pay the contractual fee.
Contract for work - cancellation by the client
The contract for work and services must also contain provisions for the event of cancellation. The fee must be paid in full by the client less the expenses that the contractor was able to save.
The regulation of further rights and provisions
Copyrights are often enough associated with the creation of a work. These must also be regulated. Does the client assume these rights in full or only in part, such as the right to publish or modify the work?
In addition, there are further rights and obligations, such as the payment of taxes and social security contributions or the obligation to maintain confidentiality on the part of the contractor. Non-disclosure regulations in particular often also form part of a contract for work and services.
The special forms of a contract for work and labour
In addition to regular contracts for work and labour, a number of special forms of contracts for work and labour have emerged in practice that must be taken into account. These look like this:
The travel contract
The travel contract is aimed at travellers and serves to protect them against travel defects. To this end, it is provided with its own warranty rights. The tour operator is the contractor and is obliged to provide the traveller with all agreed travel services at the agreed price.
As soon as the contract has been concluded, the traveller must receive confirmation of the trip from the tour operator. The relevant regulations for this can be found in §§ 651 a ff of the BGB. In addition, there are regulations for compensation in the event of defects, which result from the contract for work and labour BGB §§ 651 c ff. It is important not to confuse these with a passenger transport contract.
What is a defect? This includes, for example, dirty bathrooms in the hotel on site, construction noise, flight delays, a dirty beach or vermin. It also includes cases in which the agreed services were either not provided at all, not provided in full or not provided in the agreed form. In each of these cases, a rectification of the defects or a reduction in the price of the holiday can be claimed. Alternatively, compensation can also be claimed.
Defects should be documented with videos or photos and reported on site. If the defects are not rectified, further steps can be taken after the return. A period of up to 2 years applies for this. There are defect tables with percentage values for the reduction of the holiday price. For example, a missing balcony is worth 5 to 10%. The value of a deviating location is just as high. A dirty or even missing pool is worth up to 20%. In case of doubt, a reduction in the price of the holiday can be enforced in court.
The passenger transport contract
Contracts of carriage as such can apply to the carriage of goods or passengers. The service consists of the carrier transporting the goods or passengers on time. This is decisive for the success of the transport.
The exact regulations that apply depend on which means of transport are used. For example, the Passenger Transport Act applies to motor vehicles, buses and trams. For aeroplanes, on the other hand, the Air Transport Act applies.
The contract of carriage
Two parties are involved in a freight contract. These are the principal and the carrier in the role of contractor. In individual cases, the latter may also be porters and servants.
The service itself consists of transporting goods. This does not require a significant change of location. It is also irrelevant which means of transport are used. The contract of carriage is regulated in §§ 631 ff and §§ 407-452d of the German Civil Code (BGB).
The building contract
A construction contract, on the other hand, relates to the construction of a building or the provision of a renovation or other craft service in the construction sector. This includes, among other things, painting work and heating construction.
The planning contract
A planning contract exists between a building owner, who acts as the client, and an architect or engineer, who assumes the role of contractor. The service consists of planning a construction project, putting it out to tender and supervising the work. This also includes the remedying and monitoring of defects during the warranty phase. The contractor is responsible for the construction of the entire building without defects. responsible.
Cancelling a contract for work
A contract for work can be terminated by either party, by the client or by the contractor. However, the cancellation rights do not apply equally.
Cancellation by the client
A client can terminate a contract for work at any time - even before the work has been completed. Neither a cancellation period nor a reason is required for this. This follows from Sections 648 and 648a of the German Civil Code (BGB). This right to terminate the contract at any time also exists if the contractor works on time and honours all agreements.
In the event of such a cancellation by the client, the contractor is entitled to payment of the remuneration for the work as agreed. However, he must deduct the costs that were saved as a result of the cancellation. These include costs for materials that were not used and the time that was not spent working on the work. However, these costs are not deducted in full. Instead, there is a judicial presumption that the contractor still retains a justified claim to 5% of these costs.
Cancellation by the contractor
Although the contractor can also terminate the work, there must be good cause for doing so, as stipulated in $ 648a BGB. Good cause exists, for example, if the contractor can no longer reasonably be expected to continue the contractual relationship. This in turn is the case if, for example, the client does not fulfil its own obligation to cooperate and a corresponding deadline has expired.
Partial cancellation
Partial cancellation of the contract for work and services for good cause is possible for both parties. As a prerequisite, however, the partial performance must be clearly different from the rest of the work.
How do I get orders as a subcontractor?
To get work as a subcontractor, you need to actively approach potential customers. Build a solid network, i.e. actively make contacts with people and organizations in your industry or target market. Attend industry events such as conferences, seminars or networking mixers. These are the places where you can meet potential customers, employees or industry colleagues. You can also join professional associations or online communities related to your field. This can provide you with opportunities to network with others in your industry.
Networking through social media platforms like LinkedIn can also help expand your professional network. By regularly connecting with contacts, maintaining connections, and providing value through knowledge or support, you can strengthen your network over time. By demonstrating quality and reliability, you can increase the likelihood of repeat business.
Who is allowed to employ subcontractors?
Every start-up in Germany can hire subcontractors. Also work as a subcontractor. Companies of all sizes and industries as well as public clients can employ subcontractors.
However, there are legal rules and regulations that bind both the main contractor and the subcontractor. They are bound by working conditions, workplace safety and compliance with laws and regulations. The responsibility for ensuring that subcontractors are properly deployed and used lies primarily with the main contractor.
What do you have to consider when working as a subcontractor?
Working as a subcontractor requires careful planning and organization. It is important to have clear written contracts with the main contractors.
Contracts should specify roles, compensation, responsibilities and other important aspects. Subcontractors should also be aware of their legal and tax obligations and ensure they have all the necessary permits and insurance. Meeting deadlines and quality standards is crucial to gaining customer trust and fostering long-term cooperation. Any conflicts or problems should be communicated transparently and promptly to ensure the smooth realisation of the project.
What do you need to become a subcontractor?
Here are the simple steps to become a subcontractor:
- Acquire relevant skills: Develop the required skills and expertise in a specific field or industry where subcontracting opportunities exist.
- Obtain the necessary equipment and tools. Make sure you have the necessary equipment, tools, or resources to perform the tasks or services you plan to subcontract.
- Check the legal requirements. Find out about the legal requirements and regulations for subcontracting in your area. This may include obtaining a business license or registering your business.
- Build a network. Build relationships with potential clients and contractors who need subcontracting services. Networking can be done through industry events, professional associations or online platforms.
- Understand the legal and financial aspects. Understand the legal and financial aspects of subcontracting. These include tax obligations, liabilities and contractual agreements.
By following these steps, you can effectively position yourself for subcontracting work.
How much do you earn as a subcontractor?
As a rule, subcontractors can earn between 25 and 60 euros per hour. This depends on the services offered and regional demand. If you work full-time, you can expect to earn around 48-65 per cent of your gross salary. The annual salary as a subcontractor is between 23,232 euros and 31,460 euros net.
However, it should be noted that actual earning potential may vary from person to person and depends on various factors. In Germany, a subcontractor's salary varies depending on the industry, experience and negotiating skills. It also depends on factors such as tax brackets and allowances.
What documents must a subcontractor from Poland submit?
A subcontractor from Poland must present certain documents to work in Germany. These include a trade license, proof of professional training or qualifications, a work permit if required, and a tax identification number.
In addition, depending on the type of work and the applicable regulations, other specific documents may be required, such as proof of insurance or certificates of certain professional skills.
How can I find subcontractors?
There are several ways to find subcontractors in Germany. These include using online freelance platforms, contacting industry associations and networks. You can also ask for recommendations from other companies or partners.
In addition, public tenders, job boards and local chambers of commerce can be useful sources for finding qualified subcontractors. It is advisable to carefully screen potential subcontractors and obtain references to ensure the quality and reliability of their work.
Where can I get orders from subcontractors?
There are several ways to get work from subcontractors in Germany. Temporary employment agencies are a good place to find subcontractors.
Registering on online platforms for subcontractors or freelancers can also provide access to a wide range of potential clients and projects. A strong online presence through professional profiles and portfolios can also attract clients looking for subcontractors. One effective method is to establish contacts in relevant industries through networking events, trade fairs or business associations.
And of course, by maintaining existing relationships with clients or contractors. They may require additional project support, so this can lead to recurring subcontracting opportunities.
When are you a subcontractor?
In Germany, you become a subcontractor when you enter into a contract with either the main contractor or another subcontractor to provide certain services or to perform part of a project. Subcontractors are typically individuals or companies hired to perform specific tasks within a larger project under the direction and supervision of the main contractor or a higher-level subcontractor.
The appointment as a subcontractor entails a contractual relationship that defines the scope of work, responsibilities and payment terms between the subcontractor and the contractual partner. Subcontractors may be engaged for a variety of reasons, such as to perform tasks that are not the responsibility of the main contractor or parent subcontractor, or to efficiently manage fluctuations in workload.
In general, subcontractors are different from employees and retain a certain degree of independence in carrying out the tasks assigned to them within the project.
Why a contract for work?
A contract for work is a contractual obligation and the question naturally arises as to why such a contract should be concluded at all and why the associated risks should be taken. One answer is that contracts for work are attractive for companies that outsource certain activities to freelancers, either because the freelancers have the relevant skills, networks or other resources or because they are less expensive.
For freelancers, on the other hand, contracts for work are an opportunity to receive projects from companies and work on them with appropriate remuneration. In addition, they remain independent with contracts for work and labour and can plan their own work performance and the resources they use themselves.
Contracts for work offer companies flexibility. They can organise their operations to meet ongoing requirements and, if necessary, make use of additional resources via the work contracts. This is also accompanied by a reduction in economic risk, as the contractor now assumes this and payment is only due once the work has been successfully completed.
It also simplifies payroll accounting for companies and saves costs by eliminating the need to pay social security contributions. In addition, regulations associated with the use of temporary labour can be avoided.
The use of external expertise is also very important in various areas. This can be on a smaller scale, such as ordering an advertising campaign from a freelancer, or on a larger scale, where an office receives completely new accounting software.
Contract for work - weigh up the risks
However, the disadvantages and risks associated with a contract for work must also be weighed against this. The client becomes dependent on a third party. This third party ultimately determines the success or failure of the order with its work performance. The risk is correspondingly lower for simple projects than it is for more complicated projects, such as the development of new software.
The contractor works independently. Conversely, this means that the client has fewer opportunities for control and intervention. In addition, the expertise that is utilised with a contract for work is not automatically available for future projects
Conclusion
A contract for work is a contractual relationship that is concluded between a client and a contractor. The aim is to produce a specific work and receive a fee in return. The contractor bears the entrepreneurial risk.
The contractor remains independent in his work. This means that he is not bound by instructions. He decides for himself on the use of his resources and his working hours. He only receives his remuneration after the successful completion of the work and its acceptance by the client.
The success of the contract for work is determined by whether the work ordered was created in accordance with the specifications. It is neither about the time spent nor the resources used. Acceptance of the work depends on the client confirming that it has been created as ordered.
In contrast to a contract for work, a contract for services involves the provision of a service. There is no pressure to succeed and remuneration is based on the time spent. In a contract for work, on the other hand, time is irrelevant and the success of the work is owed.
A BGB contract for work gives the client flexibility and allows them to utilise skills and resources that are located outside the company. However, it must be clearly differentiated from an employee leasing agreement in order to avoid a possible pseudo self-employment.
Temporary work international - your partner for legal work contracts
Are you looking for a reliable partner for legally compliant contracts for work and labour? We at Zeitarbeit International will be happy to help you. We place subcontractors and temporary workers from Eastern Europe. Our subcontractors from Poland, the Czech Republic, Slovakia, Lithuania, Latvia and Ukraine speak German, can read plans and come with their own tools and vehicles. We take care of the accommodation and, if necessary, a replacement if you are not satisfied with an employee. All necessary papers and documents are checked by our team and in some cases also by specialised lawyers. Our Subcontractors, Freelancer Craftsmen from PolandSome of our Polish, Croatian, Slovakian and Czech employees have been working in Europe for over 30 years. Our Polish personnel service provider is very experienced when it comes to the Drafting and execution of work contracts in Germany.