Sales Contracts and Contracts for Services for Photovoltaic Systems

Jul 23, 2026 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has recently provided clarification on a specific contract type in a relevant case of litigation.

In the case at hand, the defendant had engaged the claimant to supply and install a photovoltaic system.

No specific delivery and installation date was agreed at the time. Whilst the claimant was prepared to perform at any time, the defendant repeatedly postponed the work.

After around two years, the defendant’s managing director gave notice of termination of the contract, which the claimant rejected. Further attempts to reach an agreement were also unsuccessful.

The claimant is requesting payment of the fee

The claimant is requesting payment from the defendant for the agreed-upon fee for the supply and installation of the system.

The defendant contended that the contract price was not yet due, as the inverter and the photovoltaic modules had not yet been delivered. Even if they were delivered, this would only result in 65 percent of the contract price becoming due. By presenting this argument, the defendant was asserting a defense of simultaneous performance.

The court of first instance ruled in favour of the claim

The court of first instance granted the claim on a step-by-step basis in return for the delivery of the photovoltaic system as agreed upon in the contract. The court treated the contract as a hybrid contract containing elements of both a contract of sale and a contract for services.

As the materials were purchased by the claimant, the defendant is liable for the full purchase price. However, the set-off defense under Section 1052 of the Austrian General Civil Code (Allgemeines bürgerliches Gesetzbuch, ABGB) is admissible and justified.

It is essential to differentiate between a contract of sale and a contract for services

The OGH determined that the determining factor in distinguishing between a contract of sale and a contract for work and materials is whether the item to be delivered is to be manufactured in accordance with the customer’s specific requirements regarding dimensions, specifications, etc. A contract for work and materials exists ‘where the contractor is required to provide services tailored to the customer's individual needs.’ The contract concluded by the parties was ‘aimed at the provision of a service tailored to the customer’s needs and requirements (the manufacture of a solar power system) and not at the delivery of an item defined merely by its generic characteristics.’ Therefore, this was not a blended contract, but rather a uniform contract for work and services.

As the work was not definitively left undone and both parties adhered to the contract, the claimant was not entitled to a claim under Section 1168(1) of the ABGB. In the context of a contract for work, the compensation is typically ‘as a rule, unless otherwise agreed in the contract, payable upon completion of the work’ (Section 1170 of the ABGB). The OGH further stated that ‘the claimant, as the contractor, could not claim the remuneration on a concurrent basis – unless the work consisted of the manufacture of an item.’ However, given the uniform nature of the contractual relationship, it was not permissible to ‘distinguish between the parts of the remuneration attributable to the delivery and the installation of the photovoltaic system.’

5 Ob 145/25x (19 May 2026)