Change in Judicial Approach to Value Guarantee Clauses

Sept 5, 2025 Benn-Ibler Rechtsanwälte

A recent ruling by the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) affirms that value guarantee clauses retain their validity even when an exclusion of a rent increase during the initial two months is not expressly excluded.

In 2021, the plaintiff (tenant) had entered into a lease agreement with the defendant landlord, effective as of March 15, 2021, with partial application of the Austrian Tenancy Law Act (Mietrechtsgesetz, MRG). The draft lease agreement mistakenly listed May 2017 as the commencement date for value adjustment calculations. This discrepancy was not identified by either party. After some time, the property manager detected the error and, following consultation with the defendant, recorded December 2020 as the starting date in his documentation.

The net base rent was adjusted upward four times according to a value adjustment clause. The plaintiff consistently paid the revised rent amounts on schedule but subsequently made an explicit reservation of rights to recover these payments.

The plaintiff requested reimbursement of approximately EUR 2,800 in excess rent payments and sought a declaration that the value adjustment clause was invalid.

The court of first instance ruled in favour of the claim; however, the court of appeals subsequently overturned this decision and dismissed the claim.

The OGH provided the following clarification:

Contract adjustments

Following the conclusion of the contract, the defendants acknowledged that designating May 2017 as the commencement date for the valorization of the existing rent was erroneous, and accordingly, December 2020 was adopted as the reference point. The plaintiff subsequently paid the stipulated rent, which was determined based on December 2020 as the starting month, without reservation and in a timely manner for a period of one year.

According to Section 863 of the Austrian General Civil Code (Allgemeines bürgerliches Gesetzbuch, ABGB), the actions of the plaintiff constitute consent, resulting in a contract adjustment that changed the starting month from May 2017 to December 2020.

Section 6(2)(4) KSchG: Limited scope of application

Additionally, in contrast to prior OGH case law, the 6th Senate underscored that Section 6 (2) (4) of the Austrian Consumer Protect Act (Konsumentenschutzgesetz, hereinafter KSchG) is inapplicable to continuing obligations—such as lease agreements—where the entrepreneur’s (here, the landlord’s) performance is structured so that it will not be fully rendered within two months from the execution of the contract.

This decision was substantiated by referencing Section 6(2)(4) of the (KSchG), which deems a clause inadmissible if it allows an entrepreneur, upon their request, to receive higher remuneration than initially agreed for services to be provided within two months after entering into the contract. The stipulation for a ‘negotiated agreement’ serves to safeguard consumers—who generally do not anticipate sudden short-term increases in remuneration—from unexpected changes.

 For value guarantee agreements concerning inflation-related remuneration adjustments in long-term continuing obligations, the risk of unexpected changes, as previously described, is mitigated. A rent amount subject to a value guarantee does not assure tenants that the rent will remain constant or unaltered.

OGH 10 Ob 15/25s (30 July 2025)