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“Pacta sunt servanda” is what they said in ancient Rome: Contracts are to be adhered to

Even if you have signed a contract, or have accepted General Terms and Conditions of Business, that does not mean that every word and every contractual clause is valid. The legislative authority has created regulations which restrict private autonomy, according to which legal relationships can be designed as you please.

One of the most important provisions in the Austrian Civil Code dating from the year 1811 is the provision in Sec. 879 regarding illegality and unconscionability. This section has been defined more precisely by a large number of high court decisions, and, in particular, relies on the applicable laws and the sense of justice of the community. Put simply, this means: Any agreements which violate a law or “contradict” the “fairly thinking” citizen and his or her sense of justice could be null and void. This provision is mandatory law, which takes precedence over any agreement entered into.

Unconscionability as a general clause has already brought down a large number of contracts or provisions, from the so-called “adhesion contracts” between companies having different levels of economic power up to the guarantee for a relative imposing too many drawbacks for family members.

General Terms and Conditions of Business, regardless of whether they are in place between companies or consumers and companies, are also subject to the ancient provision outlined in Sec. 879. Anything that, taking all the circumstances of the case into consideration, puts one of the parties at a major disadvantage could be null and void.

In the relationship between the trader and the consumer, the Consumer Protection Act is, moreover, to be observed, which does, for example, grant special rights of withdrawal or threatens certain contractual clauses with being null and void.

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Law Articles - “Pacta sunt servanda” is what they said in ancient Rome: Contracts are to be adhered to