Your rights for an inflated tradesperson invoice: binding and non-binding cost estimate, duty to notify and withdrawal under section 1170a ABGB and section 5 KSchG.
BRANDAUER Rechtsanwälte
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You hired a tradesperson, the cost estimate sounded reasonable, and then the final invoice is clearly above it. This situation is common and it raises a clear question: do you actually have to pay the higher amount? The answer depends above all on whether the cost estimate was binding or non-binding, and on whether you contracted as a consumer.
Austrian law governs the cost estimate in section 1170a ABGB. Alongside this, section 5 KSchG shifts the risk and the burden in consumer transactions in your favour. Anyone who knows these two rules can examine an inflated invoice objectively, instead of settling it unchecked or refusing it across the board.
This article explains the difference between a binding and a non-binding estimate, shows when an overrun goes too far, and which steps make sense for an inflated invoice. From a lawyer’s perspective, in many cases part of the additional claim can justifiably be rejected once the invoice is held precisely against the estimate.
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What matters is whether the estimate is expressly binding and whether you contracted as a consumer.
With a cost estimate given under an express warranty of correctness, the contractor cannot demand higher remuneration under section 1170a(1) ABGB, even where unforeseen circumstances increase the effort. To that extent you do not have to accept an invoice above the estimate.
Check the invoice item by item and hold the binding estimate against the firm. If it maintains its claim, a brief legal review clarifies your position.
If you contract as a consumer, a cost estimate counts under section 5 KSchG as given with a warranty of its correctness, unless the firm has expressly stated otherwise. In this way the Consumer Protection Act reverses the default rule of the ABGB in your favour.
Without an express note that it is non-binding, the stated price is therefore decisive in case of doubt. You should have a clearly higher invoice reviewed before you pay.
The non-binding cost estimate is an expert appraisal, not a fixed price promise. You generally have to bear a slight overrun. The law sets no fixed percentage threshold at which an overrun becomes substantial; this is assessed case by case.
Even so, check whether the extra costs are comprehensible and actually incurred. Where individual items raise doubts, a precise check of the invoice is worthwhile.
With a non-binding estimate the contractor must notify an unavoidable substantial overrun without delay. If it omits the notice, it loses under section 1170a(2) ABGB any claim to the un-notified extra work. An overrun presented only with the final invoice is therefore open to challenge.
Reject the un-notified extra costs in writing and request a breakdown. A legal review clarifies which part of the invoice is actually owed.
If, with a non-binding estimate, the contractor notifies an unavoidable substantial overrun in good time, you may withdraw from the contract under section 1170a(2) ABGB against appropriate remuneration for the work already performed. You are then not forced to keep building when the costs run out of control.
React quickly once the notice arrives. Whether withdrawal or continuation makes more sense depends on the stage of construction and should be settled promptly.
A cost estimate is the assessment of the likely costs of a works service. In legal terms, section 1170a ABGB distinguishes two forms. With an estimate given under an express warranty of correctness, the firm assumes responsibility for the amount. It can then demand no higher remuneration under section 1170a(1) ABGB, even where unforeseen circumstances increase the scope or the effort of the work.
With an estimate without warranty, it is an expert appraisal without a fixed price promise. Here the customer bears the risk of a moderate deviation. If a substantial overrun becomes unavoidable, special duties and rights apply, which are explained in the next section. Whether an estimate is binding or non-binding follows from the agreement and the circumstances; in case of doubt, interpretation decides.
The legal framework around remuneration and the due date is explored on our focus page on construction contracts and remuneration. Anyone who wants clarity even before placing the order will find the key points to check in our article on reviewing the construction contract before signing.
With a non-binding estimate, not every deviation is a problem. You generally have to accept a slight overrun, because an appraisal is not a precise promise. What is decisive is the threshold to a substantial overrun. The law sets no fixed percentage for this; whether an overrun is substantial is assessed case by case and according to the ratio of the extra costs to the original appraisal.
If an unavoidable substantial overrun emerges, the contractor is under a duty to notify. It must inform you without delay as soon as the overrun becomes apparent. If it omits this notice, it loses under section 1170a(2) ABGB any claim to the un-notified extra work. A cost increase presented only with the final invoice is therefore open to challenge, because the timely warning is missing.
If, by contrast, the contractor notifies the substantial overrun in good time, you have a choice. You can let the work continue, or you can withdraw from the contract against appropriate remuneration for the work already performed. In this way you are not forced to continue a project whose costs move clearly away from the original appraisal.
The form of the estimate decides who bears the cost risk and which rights you have if it is exceeded.
| Point | Binding, with warranty | Non-binding, without warranty |
|---|---|---|
| Binding to the price Who bears the cost risk | The firm, no higher remuneration under sec. 1170a(1) ABGB | The customer bears a moderate deviation |
| Small deviation Consequence for payment | No extra payment above the estimate | A slight overrun must be accepted |
| Substantial overrun Rights of the customer | Remains at the agreed price | Duty to notify and right of withdrawal under sec. 1170a(2) ABGB |
| Consumer transaction Presumption in case of doubt | Binding character expressly agreed | Counts as binding in case of doubt under sec. 5 KSchG |
The law sets no fixed percentage for a substantial overrun. What is decisive is the assessment in the individual case.
Special case of the consumer: if you contract as a consumer, a cost estimate counts under section 5 KSchG as given with a warranty of its correctness, unless the contrary was expressly stated. Without a clear note that it is non-binding, the stated price is therefore decisive in case of doubt. For a clearly higher invoice, booking an initial consultation (EUR 72) can quickly clarify which part of the claim is justified.
Do not pay a clearly inflated invoice prematurely. By paying without reservation you lose an important lever. First check whether the estimate was binding or whether the consumer presumption of section 5 KSchG applies. If so, you generally owe nothing beyond the stated price.
If the estimate was non-binding, compare the final invoice item by item with the estimate. Request a comprehensible breakdown of the extra costs and check whether the firm notified a substantial overrun in good time. If the notice is missing, the un-notified extra work is not owed under section 1170a(2) ABGB.
Reject unjustified parts of the claim in writing and with reasons, and set a reasonable deadline for correction. You can pay the undisputed part and withhold the disputed part. If the firm maintains an inflated claim, a legal review of the invoice is sensible. How far a right of retention reaches is dealt with in our article on remuneration claims and refusal of payment. Our article on checking the final invoice provides more detailed guidance on due dates, objections and review periods.
Not every overrun is a genuine cost overrun. Often a higher final amount rests on additional orders or changed wishes that only came up during the work. Such additional services are remunerated separately and do not fall under the protection of section 1170a ABGB, which concerns only the costs of the originally agreed service.
Pay attention, therefore, to whether the extra costs concern the agreed scope of services or whether they rest on an extension. A clear separation prevents disputes. Anyone who records additional orders in writing and has the price stated in advance keeps an overview and avoids nasty surprises with the final invoice.
For construction services it also matters whether ÖNORM B 2110 was agreed, because it contains its own procedure for changes in services and claims for extra costs. We explain what this contractual standard means in our article on ÖNORM B 2110.
That depends on the form of the estimate. If it was binding, that is, under a warranty of its correctness, the firm can demand no higher remuneration under section 1170a(1) ABGB. If it was non-binding, you have to bear a slight overrun, but a substantial one only under the conditions of section 1170a(2) ABGB. As a consumer, the estimate counts as binding in case of doubt under section 5 KSchG.
The law sets no fixed percentage. Whether an overrun is substantial is assessed case by case and according to the ratio of the extra costs to the original appraisal. A small deviation must be accepted; a clear increase can reach the threshold. In case of doubt the specific invoice should be reviewed.
With a non-binding estimate the contractor must notify an unavoidable substantial overrun without delay. If it omits this, it loses under section 1170a(2) ABGB any claim to the un-notified extra work. An overrun presented only with the final invoice is therefore, to that extent, not owed.
The focus page on the works contract, when the remuneration falls due and instalment payments under the ABGB.
When the remuneration falls due and when a right of retention exists for a defective work.
Which points to clarify in a construction contract before signing, from the service to the price.
What the contractual standard governs, when it applies and how it handles extra costs and variations.
In construction law, deadlines and evidence decide. Call us directly or send an email, callback within one business day.
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