OGH on Contractors Duty to Warn

Jan 19, 2024 Benn-Ibler Rechtsanwälte

If a contractor culpably breaches their duty to warn under Section 1168a of the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch, hereinafter ABGB), they must put the client in the position the client would have been in had the duty to warn been complied with.

In 2010, the defendant was commissioned by the plaintiff’s predecessor to lay natural stone slabs on the terrace of a newly built house. As a result of excessive moisture, spalling and efflorescence began to appear on the stone slabs 7 years later. The moisture was due to a lack of waterproofing in the substructure, which would have been easy for the defendant to detect. The lifespan of such natural stone slabs is typically 50 years.

The plaintiff sought compensation from the defendant for the cost of repairing the substructure and replacing the slabs.

The lower courts awarded the plaintiff only the cost of replacing the natural stone slabs, as the defendant had breached their duty to warn. However, a ‘new for old’ deduction of 12% was applied.

The OGH upheld the lower courts’ decision as follows:

Because the defendant had failed to point out the unsuitability of the substructure, the company was in culpable breach of its duty to warn in accordance with Section 1168a of the Austrian Civil Code and must therefore bear the costs of re-laying the natural stone slabs. The costs for the renovation of the substructure do not have to be reimbursed. Even if the defendant had been warned in time, the substructure would have had to eventually be repaired.

If a used item with a limited useful life is remanufactured, the injured party needs to consider that they now have an item that can be used for a longer period. In order to avoid that the injured party is thus ‘enriched’, a deduction of "new for old" is made.

OGH 8 Ob 115/23d (17 November 2023)