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A delivers a new boiler to his customer K for his house. A purchases a controller from manufacturer B to control the heating system. However, A installs the boiler and control unit incorrectly, causing the heating to shut down completely under certain conditions. This problem first occurs when K is on winter vacation. The outside temperature drops to -10°C, causing the water in the pipes to freeze. This results in the pipes in K's house bursting. After three days, the temperature in the house rises again to +5°C, but the basement is now flooded. The cost of repairing the water pipes and renovating the basement amounts to EUR 50,000.

The law of damages plays a central role in Austrian civil law. It regulates the question of under what conditions a person is liable for damages incurred by another person. The background to such cases is often complex, as they may involve not only contractual obligations but also tortious liability or product liability.

Structure of the claim for damages

A claim for damages requires that an injured party can demand compensation for damage from another person, the injuring party. It is essential to clarify whether the necessary legal requirements are met to justify this claim. The examination of a claim for damages is divided into several steps relating to the damage, causality, illegality, and fault. These individual aspects are essential in determining whether a claim for compensation exists and how high it may be.

First, there must be damage. In legal terms, damage is understood to mean any impairment of a protected legal position, which typically manifests itself in a disadvantage to the claimant's financial interests or personal rights. Damage can be material in nature, such as repair costs or loss of property, or immaterial in nature, such as pain or psychological suffering.

However, damage alone is not sufficient; there must also be a causal link between the behavior of the injuring party and the damage that has occurred, which is referred to as causality. This involves examining whether the action or omission of the injuring party actually led to the damage occurring.

Another key point is the unlawfulness of the injuring party's conduct. Unlawfulness means that the conduct violates applicable legal norms, contractual obligations, or general requirements of care.

Finally, the fault of the injuring party is also an essential prerequisite. Fault presupposes that the injuring party is subjectively responsible for reprehensible misconduct.

By systematically examining these four prerequisites—damage, causality, illegality, and fault—it is possible to determine whether there is a claim for damages. If it turns out that a claim for damages exists, it must still be clarified in what way the damage is to be compensated, whereby monetary compensation is usually due. Each of these points must be examined individually, as together they form the basis for enforcing a claim for damages.

Injured party and damage

Damage in the legal sense describes the adverse change in a protected legal position, e.g., property, life, or health. The legal classification of damage not only serves to define the term, but also has practical significance, as different types of damage can be treated differently in legal terms.

A classic case of damage is the impairment of the injured party's property. If an item is damaged or destroyed, there is a clear financial disadvantage that can be measured in monetary terms. The loss or impairment of monetary assets—such as a car, a machine, or a building—ultimately reduces the assets of the owner of the item.

Another common type of damage concerns health. If someone is physically injured and requires medical treatment or care as a result, liabilities arise towards doctors or hospitals. These can also be valued in monetary terms and thus count as compensable damage. If the injured party is covered by social insurance in Austria, the respective social insurance carrier must bear the damage, meaning that it is the injured party due to the cost of treatment.

Loss of earnings may also be included in the damages. If, for example, a self-employed person is unable to work due to an injury, the loss of income can be claimed as part of the damages. This applies, for example, to cases in which a business activity is interrupted by an incident and income is lost as a result. In such cases, however, it is usually not sufficient to merely demonstrate the theoretical possibility; it must be verifiable that an economic advantage would have been highly likely to occur.

While material damages represent financial losses that can be measured in monetary terms, compensation for immaterial damages serves to compensate for personal and non-material impairments. This includes, in particular, physical or mental pain that constitutes an illness, for which compensation can be paid in the form of damages for pain and suffering. The impairment of privacy, for example through violations of data protection, can also constitute immaterial damage, as can grief at the death of close relatives or the loss of holiday enjoyment.

Causality

Causality is a central point of examination in tort law and deals with the question of whether there is a causal connection between the behavior of the injuring party and the damage that has occurred. This connection is crucial in determining whether a person can be held liable as the injuring party for damage. The purpose of examining causality is to identify the “right” tortfeasor who is actually liable for the damage.

In order to assess a claim, a clear relationship must first be established between three key elements: the tortfeasor, the tortious act or omission, and the damage that has occurred. The tortfeasor is the person or institution that intervenes in the course of the damage through active conduct or a breach of duty. The harmful act or omission refers to the specific behavior that could have caused the damage—whether it be active misconduct or the failure to take necessary action. Finally, the occurrence of damage is the actual disadvantage that must be objectively attributed to the injuring party. The examination of causality ensures that only those persons whose conduct was actually the cause of the disadvantage incurred are liable for the damage. Conduct that had no influence on the course of the damage, on the other hand, does not give rise to liability.

A central principle in the examination of causality is the question of whether the conduct of the injuring party was a necessary condition for the damage to occur. It is examined whether the damage would have occurred even without the behavior of the injuring party. The consideration is made mentally: one imagines that the behavior of the injuring party did not take place. If the damage could still occur, the necessary condition is missing and liability is excluded. If, on the other hand, the damage would not have occurred in this case, the causality of the injuring party is given.

For example, a defective product from a manufacturer could be the cause of damage. However, if the product was flawless and the damage was caused by another factor, the necessary condition is not met and the manufacturer is not causally responsible for the damage.

The examination of causality is of particular importance in cases of omission. A tortfeasor can also be causally responsible for the damage by failing to perform a necessary action. In such cases, it is examined whether the omission of the action was a necessary condition for the damage to occur. This raises the question of whether the damage would have been prevented if the omitted action had been performed in a timely and proper manner.

An example of this could be a doctor's duty to provide a patient with life-saving treatment in a timely manner. If the doctor fails to do so and the patient dies as a result, there is a causal link between the omission and the patient's death.

Illegality of the damage

In Austrian tort law, illegality is one of the central prerequisites for the liability of a tortfeasor. The basic idea is that only those who act objectively unlawfully (and thereby cause damage) can be held responsible for the damage caused. The examination of unlawfulness serves to assess whether the tortfeasor's conduct violates general legal norms, protective laws, contractual obligations, or the general principles of decency. A liability claim is only justified if the damage incurred is directly attributable to the violation of such a norm.

An act is considered unlawful if it violates general legal provisions. This means that the behavior of the injuring party is contrary to existing legal or generally recognized legal obligations. Alongside fault and causality, unlawfulness is a central prerequisite for liability.

A common case of unlawfulness is the violation of absolutely protected rights. These include fundamental legal interests such as property, health, freedom, or life. If such legal positions are impaired by an act or omission, this regularly constitutes unlawful conduct, as the injuring party is interfering with the inviolable legal sphere of another person.

During an argument in a bar, one person loses their temper and punches the other person in the face. The victim's nose is broken and their glasses are smashed. The punch violated both the physical integrity (health) and the property of the injured party. Since these legal interests are absolutely protected, this constitutes unlawful conduct.

Another case of illegality is the violation of protective laws. These are legal provisions that serve the purpose of protecting certain persons or legal interests from danger and harm. Such norms therefore not only serve the general interest, but are also intended to provide individual protection – for example, in labor, environmental, or traffic safety law. If such a protective law is violated and damage results, the action is generally considered unlawful because the injuring party has violated an obligation created specifically to protect third parties.

In a metal factory, an occupational safety regulation stipulates that safety goggles and gloves must be worn for certain grinding work. However, due to time constraints, the plant manager instructs the workers to work without safety goggles. While working, a metal chip flies into an employee's eye, causing him to suffer a serious eye injury. Since the occupational safety regulation serves precisely the purpose of protecting workers from such injuries, this constitutes a violation of a protective law. The plant manager's behavior is therefore unlawful, and the injured employee can claim damages.

A key aspect in assessing illegality due to violation of general protective laws is the so-called illegality connection, which is based on the protective purpose of the violated standard. In this context, it is examined whether the violated provision serves precisely to prevent the specific damage that has occurred. Only if the damage falls within the scope of protection of the norm is there unlawful conduct that can give rise to liability. If this connection is missing—for example, because the norm pursues a different purpose—the unlawfulness in relation to the damage that has occurred must be denied. The protective purpose of the norm thus limits liability to those damages that the provision in question actually aims to prevent.

The breach of contractual obligations is also unlawful and gives rise to what is known as contractual liability. This often goes further than the aforementioned cases of (tortious) liability. It regularly covers not only damage to absolutely protected legal interests, but also purely financial losses resulting from the non-performance or poor performance of a contract. For example, the contractual partner is liable if it causes financial loss through late delivery, defective performance, or breach of contract.

An asset manager receives an order from its client to invest the client's savings safely and with low risk. Contrary to this agreement, however, it invests a large part of the money in speculative shares in a high-risk industry. When the price of these shares falls sharply, the client loses a significant portion of his assets. Since the asset manager violated the contractually agreed investment strategy, this constitutes a breach of contractual obligations and thus unlawful conduct.

A transport company contractually undertakes to deliver a machine to a customer in time for it to be presented at a trade fair. However, due to organizational errors, the delivery arrives two days late, after the trade fair has already ended. As a result, the customer misses out on a lucrative business deal that he could have concluded at the trade fair. The financial loss incurred constitutes damage caused by delay. The transport company did not fulfill its contractual obligation to perform on time and thus acted unlawfully.

If there is a contractual relationship between the injuring party and the injured party and the damage also occurs as a result of the fulfillment of contractual obligations, contractual liability also extends to the conduct of vicarious agents acting on behalf of the debtor—their misconduct is attributed to the contractual partner as if it were their own conduct.

A homeowner commissions a carpentry firm to build custom-made living room furniture. During the work, a carpentry apprentice from the firm is also on site and accidentally knocks a valuable porcelain vase belonging to the client off the shelf and breaks it while handling a tool. The apprentice is acting as the carpenter's vicarious agent, as he is working within the scope of the contractual service provision. The damage therefore occurs during the performance of the contract. The misconduct of the assistant is attributed to the carpenter as the contractor, who is therefore contractually liable for the damage caused.

Culpability for causing damage

In tort law, fault is a central prerequisite for the liability of a tortfeasor. Only if unlawful conduct can be subjectively attributed to the tortfeasor can they also be held responsible for the resulting damage. Fault describes the degree to which conduct can be personally attributed, and liability is based on the degree of fault. A distinction is made between slight negligence, gross negligence, and intent.

Slight negligence occurs when a tortfeasor fails to exercise the due care that can be expected of an average careful person in the same situation. This is an oversight or negligence that is undesirable but commonplace. Situations in which damage is caused by carelessness or a minor wrong decision are typical examples of slight negligence.

In contractual liability, there is also a presumption of fault. This means that at least slight negligence on the part of the injuring party is generally presumed as soon as a breach of contract is established. This results in a reversal of the burden of proof: it is not the injured party who must prove that the injuring party acted culpably, but rather the injuring party itself must prove that it is not at fault – for example, because it did not act wrongfully or because the damage was unavoidable despite exercising due care. This rule is intended to ensure that contractual obligations are fulfilled with due care.

Gross negligence is when behavior clearly goes beyond the threshold of carelessness and a tortfeasor violates the duty of care to an exceptionally high degree. This is the case when the misconduct should not have happened under any circumstances to a person of average care. Gross negligence is regularly assumed when a person ignores obvious dangers or acts with particular recklessness.

Gross negligence was assumed, for example, in a case where a driver entered a winding stretch of road at excessive speed (40 km/h) on a weekend with heavy tourist traffic, or in a case where a driver failed to see all the traffic signs and warning lights at a construction site in thick fog.

After a body was found on the railroad tracks, A, a police officer, was responsible for securing evidence. A informed the responsible employee of the railroad company that the track would now be accessed in the course of the recovery and safety work. It was agreed that trains in this area would only be allowed to travel at a speed that would enable them to stop in time in case of danger. However, the responsible railway dispatcher did not inform the next train driver in good time about the closure and the reduced speed, even though this would have been possible immediately. This delay in providing information led to a train accident in which A was killed. In view of the considerable danger to the people working on the tracks, it was imperative that the train drivers concerned be informed immediately. The delayed and unjustified delay in this notification is therefore to be considered gross negligence.

In principle, liability already exists if the injuring party causes damage through slight negligence, i.e., if only minor fault can be attributed to them. In many cases, however, individual contracts or specific laws (e.g., insurance contract law) contain a reference to slight and gross negligence, so that in such constellations it may depend on whether or not an insurance company will pay for the damage. According to case law, compensation for individual types of damage, e.g., bereavement damage, is also limited to cases where the injuring party acts with gross negligence.

On January 24, 2022, A parked his car on the slightly sloping parking area in front of his house. If the handbrake was not applied or the car was not in gear, the vehicle would roll southwards due to the slope. However, A did not put the car in gear or apply the handbrake. He only briefly pressed the brake pedal, which activated an electric braking system. After A got out of the car, the electronic brake released after about 20 seconds, the vehicle rolled backwards to the south and collided with the garden shed. In such a situation, the court assumed only slight negligence, so that the insurance company was obliged to cover the damage.

Due to a rear-end collision, the rear of a vehicle protrudes over the first lane of the highway. A driver coming up behind notices this too late and crashes into the vehicle without braking, killing a person standing behind the vehicle. Even though other claims for damages existed, a claim for bereavement damages was rejected due to the absence of gross negligence.

Intent requires knowledge and intent on the part of the injuring party and is present if the injuring party considers the occurrence of the damage to be possible (knowledge) and at least accepts it (intent). It is irrelevant whether the damage was the main objective of their actions, i.e., whether there was intent, or whether they were merely indifferent to the possible consequences of their behavior; this is referred to as conditional intent.

Summary

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