OGH: Notaries and Negligence

Oct 25, 2024 Benn-Ibler Rechtsanwälte

The drafter of a contract must, within the limits of what is possible and reasonable, inform the parties to an agreement of legal and financial effects of and explain to them the risks involved, taking into account potential unfavourable economic developments.

In the case at hand, the plaintiff had instructed the defendant notary public to draw up a contract of sale for the purchase of a piece of land.

The plaintiff held that the notary had given incorrect advice and acted negligently in connection with the execution of the property purchase contract; therefore he claimed damages in excess of EUR 18,000. As purchaser, the plaintiff had not been informed that she would be liable to the municipality for the seller’s outstanding debts (for hook-up to the city’s utility grids), nor had the defendant provided any such security.

The court of first instance dismissed the claim. The court of appeal, however, was of the opinion that the defendant’s notary should have discussed the fact that the purchaser, as the new owner of the property, was at risk of getting charged by the city for the outstanding hook-up fees, and therefore upheld the claim. The OGH confirmed this decision.

Parties to a contract must be informed of any circumstances that the person drafting the contract must assume are unknown to the parties. The notary, as the one drawing up the contract, must always take into account any unfavourable developments related to the content of the agreement and act accordingly. All parties to a contract must be able to feel absolutely sure that the drafter of an agreement will protect them from any potential disadvantages and provide legal and factual certainty.

However, the demands made on a notary’s diligence must not be excessive. Notaries can only be expected to apply the same degree of diligence and knowledge that a notary’s profession demands.

Consequently, the decision of the appellate court was not be challenged, as the court had reasonably determined that it was part of a notary’s normal activity to discuss with the parties to the contract the issue of unpaid hook-up charges, including all liabilities of the purchaser as the new registered owner of the property and to suggest to the parties, if they so wish, potential options for risk protection.

OGH 4 Ob 131/24d (10 September 2024)