Liability Retention in Procurement Law

Definition: The liability retention (Haftungsrücklass) is a security retention used in the Austrian construction contracting system, under which part of the contractor's remuneration is withheld by the contracting authority during the performance phase in order to secure claims arising from damage and breaches of duty by the contractor during ongoing construction.

Last updated: January 2026 · Legal basis: ÖNORM B 2110, § 1170b ABGB

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What is the liability retention?

The liability retention is a purely Austrian instrument of contractual security: an agreed percentage of the contractor's remuneration is withheld during ongoing performance in order to give the contracting authority cover for damage caused by the contractor in the course of construction.

Unlike the warranty retention (Deckungsrücklass), which takes effect after acceptance and secures warranty claims, the liability retention already applies during the performance phase. It protects the contracting authority from damage caused by defective work, delays or other contractual breaches by the contractor during ongoing construction.

In practice, the liability retention and the warranty retention are often combined and jointly regulated in the tender documents. The term is specific to Austrian construction contracting; there is no direct equivalent in German law.

Significance in the procurement procedure

The liability retention is usually regulated in the general contract conditions of the tender and is not a procurement-law term in the narrower sense but a contractual security instrument.

Typical configuration:

• Amount: Generally 3–5% of the invoiced remuneration
• Retention period: During the performance phase until acceptance
• Replacement: The contractor can replace the liability retention with an equivalent bank guarantee
• Release: After formal acceptance and after any damage claims have been settled

ÖNORM B 2110 contains rules on securities in construction contracts. The statutory basis is § 1170b ABGB, which governs securities in works contracts.

Distinction from the warranty retention:

Feature	Liability retention	Warranty retention
Purpose of security	Damage during performance	Defects during the warranty phase
Period	During construction	After acceptance (warranty period)
Release	After acceptance	After expiry of the warranty period

Related terms

• Warranty retention
• Works contract
• Contractor
• Contracting authority
• Tender
• Tender examination

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Last updated: January 2026 All information is provided without warranty. For legally binding advice, please consult a law firm specialising in procurement law.