LATEST NEWS ON CONSTRUCTION
FUNCTIONAL PERFORMANCE DESCRIPTION
08.11.2017
The starting point is a classic situation in which a contractor (hereinafter referred to as the entrepreneur) delivers a defective work to the customer (hereinafter referred to as the purchaser) and still demands the full price. Is the customer still obliged to pay and how should he behave if the contractor is willing to remedy the defect?
According to § 1170 ABGB, the work remuneration must be paid after the work has been completed. As long as the work has not been completed in accordance with the contract, the customer has the right to withhold the work remuneration according to § 1052 ABGB. This right to refuse performance represents a means for the customer to secure his claim to improvement of the defective work. It should be emphasized that the customer can withhold the entire work remuneration and not just the costs for remedying the defect. Case law recognizes the withholding of the work remuneration as vexatious and therefore inadmissible if the improvement costs are approximately 3% of the work remuneration. However, such a blatant disproportion no longer exists if the improvement costs in relation to the consideration exceed 5%. However, these are only guidelines. There is no clear case law as to which percentage point a vexatious exercise of rights can be assumed.
The prerequisite for the right to refuse performance is that the defect can be remedied and that the customer has a serious request for improvement. The customer is not entitled to influence the type, extent and implementation of the improvement to a greater extent than he is entitled to under the underlying contract. The contractor is free to make the improvement to the best of his own knowledge without having to adhere to the customer's specifications. If the customer does not allow the contractor to remedy the defects, thwarts the improvement or has the defective work completed by a third party, he can no longer refuse to pay the contract fee.
A contractual exclusion of the right of retention is generally permissible due to the dispositive effect of Section 1052 ABGB. However, the situation is different if the immorality of the agreement arises from the individual case and when concluding a contract with a consumer within the meaning of Section 1 KSchG. According to Section 6 Paragraph 1 Item 6 KSchG, a contractual clause that excludes or restricts the consumer's right to refuse performance is void.