Warranty in Procurement Law 2026

Definition: Warranty (Gewährleistung) refers, in procurement law and public contracting, to the contractor's statutory and contractually shaped liability for defects in the work delivered that come to light after acceptance (handover), including the contracting authority's associated claims for rectification, price reduction or damages.

Last updated: January 2026 · Legal basis: §§ 1167, 922 et seq. ABGB; §§ 634 et seq. BGB; ÖNORM B 2110; VOB/B

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What is warranty?

Warranty is the contractor's duty to ensure that the work it has delivered is free from defects at the time of handover (acceptance) and has the agreed characteristics. In public contracting, warranty is given concrete shape by general contract law (ABGB/BGB) and by industry-specific bodies of rules (ÖNORM B 2110, VOB/B). Procurement law instruments themselves contain no separate warranty regime, but influence contract drafting through the framework of the tender.

Warranty periods

Statutory warranty periods are a critical parameter in contract design in public contracting.

Austria (ABGB)

• Movable goods: 2 years from handover (§ 933 ABGB)
• Immovable property / building works: 3 years from handover (§ 933 ABGB)
• ÖNORM B 2110 (standard contract for construction works): industry-standard variations possible

Germany (BGB / VOB/B)

• Sales contract: 2 years (§ 438 BGB)
• Works contract (building works): 5 years from acceptance (§ 634a(1) No. 2 BGB)
• VOB/B: warranty period for construction works of 4 years (§ 13(4) VOB/B), differing from the BGB

Warranty claims

Where a defect arises, the contracting authority has the following claims under a tiered system: primarily rectification or replacement, secondarily price reduction or rescission, and damages.

1. Rectification (subsequent performance): the contractor remedies the defect at its own cost
2. Replacement: for defects that cannot be remedied, delivery of a defect-free item
3. Price reduction: proportionate reduction of the agreed price
4. Rescission (Wandlung): for material defects that cannot be remedied
5. Damages: where the contractor is at fault

Warranty retention

In public contracting, a warranty retention (security retention) is often agreed, i.e. part of the contract price is withheld until expiry of the warranty period to secure the contracting authority's claims. ÖNORM B 2110 provides for a warranty retention of typically 3 % of the contract sum. Alternatively, the contractor may provide a bank guarantee (warranty bond).

Distinction from guarantee

Warranty is statutory and does not depend on fault; a guarantee is an additional, voluntarily assumed liability for specific characteristics or functions. In tendering practice, contracting authorities sometimes require manufacturer guarantees in addition to the statutory warranty, for example for technical installations or products.

FAQ

Can the contracting authority extend the warranty period in the tender? Yes, provided this is objectively justified and proportionate. Unreasonably long warranty periods may, however, be considered an unlawful distortion of competition or a barrier for bidders.

What happens if the contractor becomes insolvent during the warranty period? The contracting authority can assert claims against the warranty retention or warranty bond. Remediation by the insolvent contractor itself is then no longer possible.

When does the warranty period start? With formal acceptance (Germany: § 640 BGB) or handover (Austria: § 1168a ABGB) of the work. Without formal acceptance, the start date can be disputed.

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