This Master Thesis investigates and evaluates the legal framework for engineering firms to step into an ARGE partnership with other planning offices. ARGE, in German construction industry an established form of partnership, becomes more and more important in acquiring and accomplishing construction projects.
ARGE underlies the regulations of the German Partnership under Civil Law. Consequently the ARGE partners are jointly and several liable for the contract to produce a work with the principal. Thus the principal reaches fundamental advantages: He reduces his risk concerning insolvency of an ARGE partner, he increases competition and he gets services from one hand.
Engineering firms, who want to participate in these projects, have to handle their capacities and risks. Engineering firms are not interested in participating in ARGE partnerships. There is no reason for voluntary sharing of liability. Engineering firms want to be responsible and liable only for services they accomplish. They do not want to share the responsibility and liability with other construction planners.
In external relationship with the principal, ARGE partners could not change the jointly and several liability.
Principals will not deal about limitation of ARGE partners’ liability. However in internal arrangements could be defined other regulations.
Beside the contract with the principal is the partnership agreement equally important. The ARGE agreement has to define the purpose of the partnership, the bodies of the partnership with their responsibilities and the services the partners have to accomplish for the ARGE. Partners have to be careful concerning liability. Partners should ensure in internal relationship that they are only responsible for services they had accomplished.
It is advisable to define other regulations in the ARGE agreement than the terms in law. For example, partners should define a fulfilment obligation, due to claim for damages by the
principal. In case of insolvency of one partner, the other partners have still to fulfil the contract with the principal. If there are services they cannot carry out by themselves, they
have to integrate other partners.
Engineering firms have to weigh within the framework of their business risk, if they are interested in acquiring the contract under the precondition to participate in an ARGE partnership. Capacity utilization is just important as the choice of partner.
Table of Contents
- I DECLARATION IN LIEU OF OATH
- II EXECUTIVE SUMMARY
- III TABLE OF CONTENTS
- 1 INTRODUCTION
- 2 PROBLEM DEFINITION
- 3 CONTRACT RELATIONSHIPS IN CONSTRUCTION PROJECTS
- 3.1 CONTRACT TO PRODUCE A WORK AND SERVICE CONTRACT
- 3.2 ARCHITECTURE AND ENGINEERING RELATIONSHIPS
- 3.3 LINKAGE TO HOAI
- 3.4 GENERAL PLANNER
- 4 PURPOSE AND TYPES OF ARGE BETWEEN ENGINEERING FIRMS
- 4.1 PURPOSE OF ARGE
- 4.2 TYPES OF ARGE
- 5 LEGAL FORMS OF ARGE
- 5.1 BASIC LEGAL FORM OF ARGE: PARTNERSHIP UNDER CIVIL LAW
- 5.2 OTHER LEGAL FORMS
- 5.3 DIFFERENTIATION FROM OTHER COALITIONS
- 6 FOUNDATION OF ARGE FOR ENGINEERING FIRMS
- 7 INTERNAL RELATIONSHIP
- 7.1 BODIES AND THEIR TASKS
- 7.2 CONTRIBUTIONS AND PERFORMANCE
- 7.3 CONTRAVENTION
- 7.4 INTERNAL LIABILITY
- 7.5 WITHDRAWAL OR EXCLUSION OF AN ARGE MEMBER
- 7.6 PERFORMANCE BOND
- 8 EXTERNAL RELATIONSHIP
- 8.1 EXTERNAL REPRESENTATION
- 8.2 LIABILITY
- 8.3 INSURANCE FOR EXTERNAL RELATIONSHIPS
Objectives and Key Themes
This Master's Thesis aims to investigate the legal framework surrounding the formation and operation of Arbeitsgemeinschaften (ARGEs) – temporary partnerships – among engineering firms involved in construction projects. The thesis explores the challenges and considerations for engineering firms participating in ARGEs, particularly regarding liability and risk management.
- Legal framework of ARGE partnerships in the German construction industry
- Liability and risk allocation within ARGE partnerships
- Contractual agreements and their implications for ARGE members
- Internal and external relationships within ARGE structures
- Comparison of ARGE models and best practices
Chapter Summaries
1 INTRODUCTION: This chapter provides a brief introduction to the topic of ARGEs in the German construction industry, highlighting their increasing importance and the complexities involved in their formation and operation. It sets the stage for the subsequent chapters by outlining the research objectives and the structure of the thesis.
2 PROBLEM DEFINITION: This chapter defines the central problem addressed in the thesis: the reluctance of engineering firms to participate in ARGEs due to concerns about joint and several liability. It underscores the conflict between the principal's desire for risk mitigation through ARGE structures and the engineering firms' preference for limited liability tied to their specific contributions. The chapter sets the context for exploring potential solutions.
3 CONTRACT RELATIONSHIPS IN CONSTRUCTION PROJECTS: This chapter lays the groundwork by explaining different types of contracts prevalent in construction projects, focusing on contracts for work and service contracts. It analyzes the specific relationships between architects and engineers, linking these relationships to the HOAI (Honorarordnung für Architekten und Ingenieure - German Fee Order for Architects and Engineers). The role of the general planner is also explored.
4 PURPOSE AND TYPES OF ARGE BETWEEN ENGINEERING FIRMS: This chapter delves into the reasons behind the formation of ARGEs and the various types of ARGEs possible. It highlights the primary goal of ARGEs: combining expertise and resources to successfully bid for and complete complex construction projects. It categorizes the different types of partnerships based on their structure and objectives.
5 LEGAL FORMS OF ARGE: This chapter examines the legal structure of ARGEs, primarily focusing on their foundation as partnerships under civil law. It also explores alternative legal forms and differentiates ARGEs from other types of collaborations or alliances. The analysis emphasizes the implications of choosing a particular legal structure on liability and risk.
6 FOUNDATION OF ARGE FOR ENGINEERING FIRMS: This chapter addresses the practical aspects of establishing an ARGE, particularly for engineering firms. It explores the challenges and considerations involved in creating a legally sound and efficient partnership structure. This chapter likely delves into the necessary steps and legal requirements.
7 INTERNAL RELATIONSHIP: This chapter focuses on the internal dynamics of an ARGE, examining how responsibilities, contributions, and decision-making are managed within the partnership. It analyzes mechanisms for conflict resolution, internal liability, and the process of adding or removing members from the ARGE. This is a crucial section regarding the smooth functioning of the partnership.
8 EXTERNAL RELATIONSHIP: This chapter deals with the ARGE's external dealings, particularly its representation and liability toward the client. It discusses strategies for managing the risks associated with joint and several liability, and the importance of appropriate insurance coverage. This chapter directly addresses the main concern of engineering firms regarding liability to the client.
Keywords
ARGE, construction projects, engineering firms, legal framework, liability, risk management, partnership agreements, contract law, German construction industry, joint and several liability, internal and external relationships.
Frequently Asked Questions: A Comprehensive Guide to Arbeitsgemeinschaften (ARGEs) in German Construction Projects
What is this document about?
This document provides a comprehensive preview of a Master's Thesis investigating the legal framework surrounding Arbeitsgemeinschaften (ARGEs) – temporary partnerships – among engineering firms in German construction projects. It covers the objectives, key themes, chapter summaries, and keywords of the thesis.
What are ARGEs?
ARGEs are temporary partnerships, commonly used in the German construction industry, formed by engineering firms to combine expertise and resources for complex projects. This allows them to successfully bid for and complete large-scale construction work.
Why are ARGEs important in the German construction industry?
ARGEs are increasingly important because they allow for the pooling of resources and expertise, enabling firms to tackle larger and more complex projects than they could individually. However, they also introduce complexities regarding liability and risk management.
What are the key legal aspects of ARGEs addressed in this thesis?
The thesis explores the legal framework governing ARGEs, focusing on partnership formation under civil law, alternative legal structures, and the differentiation of ARGEs from other types of collaborations. It also examines liability and risk allocation within the ARGE structure, both internally and externally.
What are the main concerns of engineering firms regarding ARGEs?
A significant concern is joint and several liability. Engineering firms are often hesitant to participate in ARGEs due to worries about potentially being held fully responsible for the actions or failings of other partners.
How does this thesis address the concerns of engineering firms?
The thesis investigates strategies for managing and mitigating the risks associated with joint and several liability within ARGEs. This includes exploring various legal structures and contractual arrangements to better define responsibilities and limit individual liability.
What are the key chapters and their focus?
The thesis is structured to cover the introduction, problem definition, contract relationships in construction projects, purpose and types of ARGE, legal forms of ARGE, the foundation of ARGE, internal relationships within the ARGE, and external relationships (including liability and insurance).
What are the internal relationships within an ARGE?
The thesis delves into the internal dynamics of an ARGE, including responsibilities, contributions, performance, conflict resolution, internal liability, and procedures for adding or removing members.
What are the external relationships within an ARGE?
This aspect focuses on how the ARGE interacts with external parties, particularly the client. It addresses external representation, liability towards the client, and the crucial role of insurance in managing external risks and potential liabilities.
What are the key takeaways from this research?
The thesis aims to provide a comprehensive understanding of the legal framework and practical considerations for engineering firms participating in ARGEs in Germany. It aims to offer solutions for mitigating the risks associated with these partnerships while highlighting the benefits of collaboration.
What are the keywords associated with this research?
Key terms include ARGE, construction projects, engineering firms, legal framework, liability, risk management, partnership agreements, contract law, German construction industry, joint and several liability, and internal and external relationships.
- Citar trabajo
- Kenan Kaya (Autor), 2012, ARGE – construction partnership in Germany: legal issues in cooperation of different engineering firms, Múnich, GRIN Verlag, https://www.grin.com/document/196792
