Bau aktuell: “The legal consequences of withdrawal from the contract according to § 1170b of the Austrian General civil code (right of the contractor to provide security) using the example of defect rectification according to Austrian standard B 2110”
In the new issue of bau aktuell, the specialist journal for building law – building business management and building management, partner Dr. Georg Seebacher and attorney-at-law Mag. Lukas Andrieu discuss the legal consequences of a resignation of the building contract, if the owner refuses the payment of a guarantee (§ 1170b General civil code). What are the legal consequences if there are construction defects at this point in time and what is the effect of the agreement of Austrian standard B 2110 as a contractual basis?
From the point of view of legal building practice, it is more and more frequent that building contractors demand security from the client even after handover in accordance with § 1170b of the Austrian General civil code. In the event of defects, there is often a dispute between contractors and clients as to what legal consequences will be triggered if the client does not comply with the request for guarantee proceedings during this phase of the project. If the guarantee is not provided, the contractor – as provided for in § 1170b ABGB – usually declares the contract to be cancelled. If the construction work is defective at this point in time, the question arises as to whether and how the contractor’s cancellation of the contract affects contractual rights of retention or provisions for the remedying of defects. For example, point 10.4 of Austrian standard B 21101 stipulates that the contractor may withhold the compensation for work up to three times the expected costs of a replacement performance of the remedial work. But are these or comparable regulations still applicable after the contract has been withdrawn?