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- Primer on Austrian Contract Law
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Primer on Austrian Contract Law
The legal framework on the law of contracts is set forth in the Austrian Civil Code and a newly enacted Uniform Commercial Code (UGB). The UGB governs all commercial transactions as of January 1, 2007.
Freedom of contract is the underlying principle of Austrian contract law. The contracting parties are thus free to choose any terms suitable for a transaction, unless a contractual provision or covenant would render the agreement unconscionable or otherwise unlawful. A contract is defined as consenting declarations of an offer and a corresponding acceptance and in general, neither offer nor acceptance requires a specific form under Austrian law. Also oral agreements and, under restricted circumstances, agreements implied through action (tacit agreement) are legally binding and enforceable. Certain exceptions to this freedom of form apply with respect to securities and suretyship agreements, insurance contracts and certain agreements governed by consumer protection laws. These contracts must be made in writing to become effective. The even stricter form of a notarial deed is required to set up corporations and transfer shares held in a limited liability company.
Business transactions are commonly subject to either of the contracting parties’ terms and conditions and Austrian law safeguards that such general terms pass a test of fairness and are not forced upon the other party.
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