The contractor’s duty to warn: when additional costs and defects must be flagged

The contractor owes not only the work but also their expertise. Under section 1168a ABGB they are liable where the work fails because of obviously unsuitable material provided by the client or an obviously incorrect instruction, unless they warned the client. As an expert, they must examine plans, preliminary work and material specifications for recognisable defects.

The benchmark is the knowledge of an average expert in their trade. No scientific examination is required, but the attentive eye of the professional who recognises what obviously does not fit together. What remains invisible to a layperson can be a clear warning sign for the expert.

The warning must be given clearly and in good time, that is, early enough for the client to still respond and rearrange. A passing remark is not enough. Anyone who takes the duty to warn seriously protects not only the client from a failure but also themselves from liability. The term is also explored in our glossary entry on the duty to warn.

The law names two triggers. The first is the obviously unsuitable material that the client provides. Where the client supplies material that is recognisably unfit for the intended purpose, the contractor must raise this before processing it.

The second trigger is the client’s obviously incorrect instruction. This means a specification for the execution whose error the expert can recognise. Where the client insists on a construction that does not bear up according to the rules of technology, that is a case for a warning. In each case the word obvious is decisive: it is about recognisable, not hidden, defects.

Both cases share the same core. The client introduces their own specification, the contractor recognises its unsuitability and remains silent. Anyone who keeps building in this situation without warning takes on the risk of failure, even though the cause stems from the client’s sphere.

If the contractor omits the required warning, they bear the consequences of the failure. They may lose their remuneration in whole or in part and face warranty and damages claims. This liability does not attach to fault for the actual error but to the omission of the warning.

That is the real sharpness of the rule. Even where the unsuitable material comes from the client, the contractor may have to answer for the failed work because they should have warned and did not. The duty to warn is therefore not a formality but often the pivotal point of a remuneration dispute, as we address in the article on the remuneration claim and refusal of payment.

For the client the breached duty to warn opens up the usual remedies for defective performance, from improvement through to damages. How these claims interact is shown in the article on warranty and damages for construction defects.

Where the contractor warned in good time and clearly, but the client insisted on their specification nonetheless, the responsibility shifts. The contractor has fulfilled their duty and is in principle released. The client decided against the professional advice and must bear the consequences.

Often the truth lies in between. Where the client’s specification contributes to the loss without the duty to warn being either fully fulfilled or fully breached, the responsibility is shared. Contributory negligence under section 1304 ABGB then distributes the loss according to the weight of the mutual causation. The mechanism is explained in the glossary entry on contributory negligence.

In practice this means for the client: a warning from the contractor is not an annoying formality but a decision with consequences. Anyone who insists on an execution despite a warning should do so deliberately and provably, and should know the possible consequences.

A warning often leads to a follow-up question: who pays the additional costs of the better solution? The distinction is important. A justified warning alone does not yet give rise to an additional claim for remuneration. With the warning the contractor merely fulfils their statutory duty.

Additional costs only arise where the client requests a different or additional performance after the indication. Where this additional work goes beyond the agreed scope of services, it must be remunerated separately. Whether a lump-sum price or a unit price applies then decides the billing of the additional work.

Record changed or additional services in writing before carrying them out, ideally with price and scope. This way both sides avoid the later dispute over whether it was an additional performance or a service already owed. How to settle such points cleanly in the contract itself is shown in the article on the construction contract before signing.

As the contractor, examine material and instructions before carrying out the work and clearly raise recognisable concerns. Put the warning in writing, give the client a reasonable period to respond and document the dispatch. A provable warning is your most important protection against liability.

As the client, take a warning seriously and decide deliberately. Record whether and when a warning was given and how you responded. If a required warning was omitted and a defect arose from it, secure the correspondence and have your claims examined.

In both roles an early legal assessment is worthwhile, because unsuitability, the timeliness of the warning and contributory negligence can usually only be judged in their interplay. The focus page on construction contract and remuneration classifies the obligations of both sides.