Still no obligation to inquire about insolvency for non-entrepreneurs

Mar 24, 2021 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, OGH) has ruled that even easily accessible information in the edict file via the internet does not change the fact that non-entrepreneurs are not obliged to inquire about possible insolvencies of their business partners.

In the case at hand, the debtor (a construction company) completed work on the defendant's (a non-entrepreneur) house. However, insolvency proceedings were subsequently opened against the debtor's assets. The managing director of the debtor concealed the existence of this construction site from the insolvency administrator (plaintiff). He personally handed over the invoice to the defendant, which - unlike the first partial invoice already paid - did not contain the company paper and the company signature. In addition, the defendant was informed that he should pay to the account of the intervening party (an employee of the company), as she still had claims against the debtor.

The plaintiff demanded payment of the invoice amount to him. The payment to a third party had not been made in discharge of debt (Sec. 3 (2) Austrian Insolvency Code - Insolvenzordnung, IO), as the defendant should have known from the edict file on the internet that insolvency proceedings had been opened against the debtor's assets.

The OGH ruled that there was no obligation to check the insolvency file simply because it is now generally accessible and it is much simpler to consult it. An obligation for non-entrepreneurs to regularly check their contractual partners with regard to possible insolvencies before making a payment was held to still be rejected in principle. For a breach of the due diligence obligation, there would have to be additional, concrete circumstances that would lead to the assumption of insolvency.

In the specific case, this was not to be assumed, as the defendant was given a conclusive explanation for the transfer to another account when he asked. Moreover, insolvency cannot be inferred solely on the basis of an improper invoice.

The OGH thus adhered to its previous case law.

OGH 9 Ob 33/20y (17.12.2020)