04.11.2017
In general, a contractual penalty refers to a sum of money promised to the contractual partner in the event that the promiser does not fulfill his contractual obligations or does not fulfill them properly. Such agreements are common in construction law and are used in particular to secure a construction completion deadline.
The tricky question now is how the contractual penalty is to be handled if the construction completion date is delayed and the reasons for the delay come from the client's sphere of influence.
The Supreme Court (OGH) dealt with this issue in a recent decision on 2 Ob 176/14t. Manageable, short-term delays that are attributable to the client's sphere of influence do not affect the validity of the contractual penalty clause. The contractual penalty then ensures compliance with the modified execution deadlines.
However, if the building contractor's entire schedule is "thrown out the window", i.e. the delay exceeds the usual time limit, for example because requests for changes are made, there is no longer a binding completion date and the penalty agreement is ineffective. Whether this is a short-term and manageable delay must be examined on a case-by-case basis. In the present case, there was a four-month delay, which the Supreme Court does not consider to be a manageable delay. In other decisions, a delay of one month was already considered to be no longer manageable.
In order to prevent the contractual penalty clause from being omitted, it is advisable to agree on a contractual penalty that is not dependent on a specific date. This does not contain a specific handover date, but rather provides an abstract penalty in the event of non-compliance with the handover date. In contrast, a deadline-based clause contains a specific handover date. In this case, in case of doubt, it can be assumed that the parties must expressly agree that the contractual penalty clause is valid despite a new determination or an unforeseeable delay.
Conclusion: Contractual penalty clauses that are not subject to a specific deadline are advantageous for the client, as a construction schedule that is "thrown out the window" does not affect the validity of this clause. If a contractual penalty that is subject to a specific deadline has been agreed, it is necessary to adapt the contractual penalty clause to the changed handover date. If the contract is not adapted, the contractual penalty clause will not apply to the changed handover date in case of doubt.