Austria: Supreme Court sees loss of the basis of the contract only as a last resort

 

In a decision dated 25.05.2023 (5 Ob 56/23f), the Supreme Court again had to deal with the objection of the loss of the basis of the contract. In summary, the facts of the case were that the owner of a property sued a person entitled to building rights for an unpaid part of the building rent. The beneficiary of the building lease retained the building lease interest (to the extent of the value preservation). This was argued with the argument that the transport links of the property had deteriorated considerably due to structural changes to the country road, so that the properties covered by the building law could only be reached to a very limited extent by car and on foot. It was found that a previously existing pedestrian crossing had been eliminated due to the construction of a roundabout and that direct access to the property by blocking lines no longer existed. Nevertheless, accessibility was still given.

The defendant argued that since the conclusion of the building lease agreement and the corresponding supplements, the basis of the contract had changed so seriously that an adjustment of the contract by reducing the building rent was necessary. Specifically, the objection of the loss of the basis of the transaction was also raised here.

The Supreme Court did not comment on the specific case constellation, since it was not clear on the basis of the facts established whether the change in the transport connection had any influence on the business development of the first defendant.

However, the Supreme Court basically explains the legal institution of the loss of the basis of the contract. Compliance with the contract requires that each party to the contract fulfils the obligations it has assumed and must bear the risk of failure of its expectations. The institution of the loss of the basis of the contract was therefore to be used only as a last resort. Recourse to these must be omitted if a contract is not incomplete according to its immanent purpose stated by the parties. Arguing with the loss of the basis of the business will therefore only be successful in very few cases.

All the more reason for this judgment to emphasise the importance of taking into account essential points for the contract, including possible future circumstances, as early as the drafting of the contract, and to regulate the consequences of possible changes in the future accordingly.

 

For further information, please contact:

Konstantin Fischer, Lawyer

Zumtobel + Kronberger + Rechtsanwälte OG, Salzburg

Email: fischer@eulaw.at

t: +43 662 624500

 

#WLNadvocate #Austria #EU #Europe #network #international #SupremeCourt #law #legalnews #company #business #construction #contractlaw #realestate