OGH on Duty to Warn in Work and Labour Contracts

Feb 17, 2023 Benn-Ibler Rechtsanwälte GmbH

If a breach of the duty to warn leads to the unusability of a product, the claim to payment shall also be forfeited if customers subsequently render that product usable at their own expense. If, on the other hand, the breach of the duty to warn only leads to a partial loss of usability, the claim shall only apply to the unusable part of a product.

The defendant had a residential building consisting of four flats built on his property. He received information from a local district heating company that district heating could be supplied all year round. The defendant then commissioned the plaintiff, whose company management had no knowledge of the local district heating supply situation. Because it was not possible to provide hot water all year round, the plaintiff installed four electrically operated water heaters. The building authority of first instance issued an improvement order, since according to Section 80 of the Styrian Building Act as amended by the Styrian Building Act LGBl No. 34/2015 (now Section 80b para. 2 no. 4; Stmk BauG) the hot water supply for new residential buildings has to be provided by solar heating systems or renewable energy sources. While the plaintiff demanded the balance of payment for his work, the defendant contested the claim and demanded offsetting against the additional costs.

The court of first instance and the court of appeal upheld the plaintiff. The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) ruled as follows:

The plaintiff was responsible for the breach of the duty to warn. In the present case, the defendant gave instructions that were incorrect, which led to a ban on the residential building by the building authority. This qualifies as unsuccessful work pursuant to Section 1168 of the Austrian General Civil Code (Allgemeines Bürgerliches Gesetzbuch), since specialist contractors need to be aware of the pertinent building codes. The buyer is thus to be placed in the position he would have been in had the duty to warn not been breached. In existing literature it is argued that the rules of partial impossibility do not have full consequences if the customer has a partial interest. However, an improved work can no longer be considered unsuccessful. Furthermore, it was not the plaintiff who ensured the usability in this case. This would unjustifiably exonerate the plaintiff from their responsibility.

OGH 1 Ob 164/22g (22.11.2022)