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Breach of contract

Basically, three types of claims are distinguished:

  1. action for a declaratory judgment;
  2. action for performance (e.g., damages); and
  3. action for shaping the law

The basic element of a claim for breach of contract is always a valid contract. However, culpable violation of contractual or pre-contractual obligations (culpa in contrahendo) also leads to a claim for damages. In principle, what applies in general also applies to culpability: anyone who invokes a circumstance that is more favourable to him or her in the proceedings must prove that this circumstance has also occurred. The aggrieved party must, therefore, also prove the fault of the tortfeasor (liable party). However, there is an exception to this rule.

A highly significant reversal of the burden of proof for culpa in contrahendo exists, for example, in the event of a breach of contractual or contract-like obligations. This means that it is not the aggrieved party who must prove that the tortfeasor is at default, but the tortfeasor who must prove that he or she is not at fault. The determination of the burden of proof in Section 1298 ABGB only applies to the area of culpability, but not to the area of causality.

In the event of a breach of contract, a party is, based on Sections 1293 et seq. of the ABGB, entitled to sue the other party or parties for damages.

However, contracts can also be challenged on usury (Section 879, Paragraph 2 Z4 ABGB) or owing to material imbalance (leasio enormis, Section 934 ABGB). A contract may also be contested on the grounds of error, cunning or threat.

In the event of defective performance of a contract, the party concerned is entitled to the statutory warranty rights, provided by Section 932 ABGB. According to the law, the transferee can demand improvement (repair or providing the missing), the replacement of the asset, a reasonable reduction of the price (price reduction) or the rescission of the contract (redhibition). The right to the legal warranty must be claimed at court within three years if it relates to immovable assets, and two years if it relates to movable assets. Warrant law does not apply if assets are transferred outright, in the case of obvious defects or in case of contractual exclusion. The warranty right can therefore be excluded in principle contractually; in the case of a consumer contract, however, it is mandatory. In addition, contractually agreed warranty clauses can be sued as well.