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Construction contract & remuneration.

From the first draft to the final invoice, the construction contract decides on performance, price and risk. We review before signing and enforce remuneration claims or defend against excessive demands.

BRANDAUER Rechtsanwälte
Your law firm

BRANDAUER Rechtsanwälte

Salzburg law firm for real estate, construction and corporate law

Every matter is handled by a coordinated team of lawyers, legal staff and specialists. In construction cases we look at contract, evidence, deadlines and commercial consequences together.

Call directly +43 662 6280000 WhatsApp Send email Book initial consultation (72 euros)

A construction contract is a works contract under sections 1165 to 1171 ABGB. The contractor owes a result, namely the defect-free structure, and the client owes the agreed remuneration. In practice it is shaped by the agreed scope of works, the price form and frequently by ÖNORM B 2110 as the contractual basis.

Whether the project succeeds or ends in dispute usually depends on what was arranged before signing. A clear description of works, a suitable price form and a comprehensible payment schedule prevent conflicts over additional costs and the final invoice. If building comes first and disputes follow, the positions are often entrenched.

This page orders the construction contract from signing to the final invoice: price forms, additional costs, the due date of remuneration and the limits of refusing payment. The guide below helps you assess your situation, but does not replace an examination of the individual case.

Assess your situation

Where do you stand in your construction contract?

Answer one or two questions about the phase of your project. You will receive a first, non-binding assessment and the appropriate next step.

Already know you want to get in touch? Go straight to the enquiry form.

01 Question 1

Which phase of your construction project are you in?

A construction contract is a works contract under sections 1165 ff ABGB. Before signing you have the most room to manoeuvre, during execution it is about additional costs, and at the end about remuneration and the final invoice.

All paths at a glance

Overview of all answers.

01

Before signing you have the most room to manoeuvre. Have the contract reviewed now.

After signing the room to manoeuvre is small, beforehand much can still be arranged. The decisive points are the price form (lump-sum, unit price or cost-plus), a complete description of works, a clearly regulated completion date with a contractual penalty and a comprehensible payment schedule. If ÖNORM B 2110 is agreed, its rules on changes to works, deadlines and billing apply in addition.

Have the contract and bill of quantities reviewed before signing. This avoids gaps that later lead to disputes over additional costs and remuneration.

Reviewing a construction contract before signing →
02

Additional work reported in good time is generally to be remunerated separately.

If a changed or additional work goes beyond the agreed scope and was reported and ordered in good time, there is generally a claim to additional remuneration. The agreed scope and the price form are decisive; under a lump-sum price the quantity risk generally lies with the contractor, under a unit price billing follows the actual quantities.

Record the notice, order and quantities in a comprehensible way. This allows the additional-cost claim to be substantiated both in principle and in amount.

03

Without a clear notice the additional-cost claim is open to challenge in principle.

Changed or additional works often lead to dispute. If a clear notice or order is missing, it can frequently be disputed whether this is a genuine additional work at all or already a basic work owed. Anyone who agrees informally or only asserts additional costs with the final invoice bears the risk that the claim fails in principle.

Have it checked whether the additional work can be substantiated from the existing documents and which claims still hold despite the missing notice.

04

With acceptance and a verifiable final invoice, the remuneration becomes due.

Remuneration is generally due upon completion of the work (section 1170 ABGB); in practice the final payment requires a verifiable final invoice and the expiry of a reasonable review period. If acceptance and a verifiable invoice are present and the client nonetheless does not pay, the client is generally in default. A reminder with a deadline is then the first step before litigation comes into consideration.

Check from when default has arisen and secure acceptance and billing. This determines the claim to default interest.

Remuneration claim and refusal of payment →
05

In the case of defects you may withhold a reasonable part of the remuneration.

If the work is defective, section 1052 ABGB gives the client a right to refuse performance and to withhold. The amount withheld must, however, be in reasonable proportion to the defect and the expected cost of repair. Anyone who withholds the entire remuneration over a small defect overstretches the right to withhold and can themselves fall into default.

Give notice of the defect in writing, set a deadline for repair and pay the undisputed part. Withhold only a proportionate amount.

Remuneration claim and refusal of payment →
06

Without acceptance or a verifiable invoice the remuneration is usually not yet due.

Remuneration is generally only due upon completion of the work (section 1170 ABGB), agreed instalments according to the respective construction progress. As long as the work is not complete or a verifiable final invoice is missing, the client can often withhold the final payment for good reasons. Only with a verifiable invoice and the expiry of a reasonable review period does the due date arrive.

Clarify whether the work is complete and whether a verifiable invoice is available. This determines from when default can arise at all.

The construction contract at a glance

From signing to the final invoice

Every phase of the construction contract has its own levers and its typical points of dispute. Knowing them secures your position in good time, instead of reacting only in the conflict.

Phases of the construction contract with their respective levers and typical points of dispute
Phase What matters Typical point of dispute
Before signing Before signing Clarify the price form, description of works, date and payment schedule An incomplete description of works
During execution Additional costs and change orders Report additional work in good time, in principle and in amount Unreported change orders
At acceptance Handover of the work Record defects; acceptance establishes the due date Acceptance without reservation despite defects
Final invoice Remuneration and payment Submit a verifiable invoice, withhold only reasonably Excessive refusal of payment

The overview orders the phases of the construction contract and does not replace an examination of the individual case. Which rules apply in detail depends on the contract and on any agreed ÖNORM B 2110.

The construction contract is a works contract

The construction contract follows the works contract law of sections 1165 ff ABGB. Unlike a service contract, the contractor does not merely owe effort but a result: the contract-compliant, defect-free work. Who owes which performance in what quality follows from the contract, the plans and the description of works. If ÖNORM B 2110 is agreed, its rules on changes to works, deadlines and billing apply in addition.

A central lever is the price form. Under a lump-sum price a fixed amount applies to a clearly defined scope of works, and the quantity risk generally lies with the contractor. Under a unit price billing follows the actual quantity per item, and the quantity risk lies with the client. Cost-plus work is remunerated according to expenditure where the performance cannot be calculated in advance.

We explain the central terms around the works contract, price form and billing concisely in our construction law glossary. A clear description of works is the best precaution against later disputes over scope and remuneration.

Additional orders, additional costs and the duty to warn

Changed or additional works often lead to dispute. Additional costs must be comprehensible both in principle and in amount and should be reported in good time. Decisive is the distinction between the basic work owed and a genuine additional work that goes beyond the agreed scope. Anyone who agrees informally often pays more in the end than expected.

Under section 1168a ABGB the contractor has a duty to examine and to warn. If the contractor recognises that material supplied by the client is evidently unsuitable or that an instruction is evidently incorrect, they must warn clearly and in good time. If the warning is omitted, they are liable for the consequences and can lose their remuneration in whole or in part, even without fault in the actual error.

If execution fails for reasons on the client's side, the contractor generally retains the claim to remuneration under section 1168 ABGB. However, what the contractor saved as a result of the non-execution or earned elsewhere must be deducted. The contractor should keep the fee, but not earn twice.

Due date of remuneration, retention and securities

Remuneration is generally only payable after completion of the work (section 1170 ABGB). On a construction site this means a duty of advance performance by the contractor: first the building is done, then payment is made. Agreed instalments fall due according to construction progress. The final payment regularly requires a verifiable final invoice and the expiry of a reasonable review period.

If the work is defective, section 1052 ABGB gives the client a right to refuse performance and to withhold. The amount withheld must, however, be in reasonable proportion to the defect and the expected cost of repair. Excessive withholding can itself lead to default. It is therefore sensible to record defects already at acceptance; our handover protocol checklist offers guidance on this.

To secure the warranty phase, a cover retention and a guarantee retention are also customary. The retention money is a withheld part of the remuneration that is only paid out after the expiry of an agreed period or against a bank guarantee. Its amount and terms follow from the contract and any agreed ÖNORM B 2110.

This page offers a general overview of the Austrian legal position and does not replace advice in an individual case. The due date, review periods and the reasonableness of a withholding are often disputed in an individual case.

Frequent questions

Construction contract and remuneration.

What is a construction contract in legal terms? +

A construction contract is a works contract under sections 1165 ff ABGB. The contractor owes a result, namely the defect-free structure, and the client owes the agreed remuneration. Content and scope follow from the contract, the plans and the description of works, frequently supplemented by ÖNORM B 2110.

When does the remuneration become due? +

Generally upon completion of the work (section 1170 ABGB). Agreed instalments fall due according to construction progress. In practice the final payment requires a verifiable final invoice and the expiry of a reasonable review period. As long as the work is not complete, the client can often withhold payment.

May I withhold remuneration because of defects? +

Yes, to a reasonable extent. Under section 1052 ABGB you may, in the case of a defective work, withhold a part of the remuneration that is in reasonable proportion to the defect and the cost of repair. Withholding the full amount over a small defect, by contrast, is risky and can put you in default yourself.

Are additional costs possible under a lump-sum price? +

The lump-sum price covers the agreed scope of works; the quantity risk generally lies with the contractor. If additional or changed works that go beyond this scope are ordered, additional costs can arise for them. Dispute often arises at the boundary between the performance owed and a genuine additional performance, so a careful examination is worthwhile.

In depth

Articles on this focus area

Reviewing a construction contract before signing

What matters in the price form, payment schedule and description of works before you sign.

Remuneration claim and refusal of payment

When remuneration becomes due under section 1170 ABGB and when a client may withhold payment under section 1052 ABGB.

Developer contract and the BTVG

Instalment plan, security model and protection when buying from a developer before completion.
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Review the contract, enforce the remuneration?

In construction law, the contract and the billing decide. Call us directly or write to us, with a callback within one business day.

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