Disenrichment after learning that the legal basis failed: review restitution
When an initially justified payment loses its legal basis, review restitution, disenrichment and recipient knowledge under Austrian Civil Code sections 1435 and 1437.
30 September 2026, Mag. Bernhard Brandauer, Rechtsanwalt
When a payment was initially owed and the legal basis later fails, section 1435 of the Austrian Civil Code opens a distinct restitution assessment. The key connection is between the original legal basis, the event that ended it and the recipient knowledge that followed.
Later knowledge of the recipient can matter for disenrichment. Section 1437 of the Austrian Civil Code classifies a recipient of a payment made without debt as a good-faith or bad-faith possessor. A claim based on section 1435 therefore requires a precise review of the applicable legal basis and the point at which the recipient had to recognise that the benefit could no longer be retained.
Preparation starts with a clear chronology. The agreement or legal basis, payment, event causing the basis to fail, notice to the recipient and every later use of the benefit belong in one timeline.
Which question determines the next review?
First classify how the legal basis developed, then establish when the recipient learned of the change. This shows which documents matter for restitution and disenrichment.
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How did the legal basis develop?
For section 1435, the legal basis must initially have existed and must later have ended.
Overview of all answers.
Review knowledge before use
Organise the notice of the legal-ground failure, its receipt and the later use of the benefit. The sequence matters when assessing whether a disenrichment objection can succeed.
Assess recognisable circumstances
Record which facts were apparent to the recipient. A contract change, account statement, reversal agreement and correspondence may show together when the failure became recognisable.
Keep the knowledge date open
Build a chronology from objective dates. If receipt of a statement or the date of use is unclear, the uncertainty should remain visible in the legal assessment.
Separate the initial payment position
Document why the debt is said to have been absent already at payment. That fact pattern requires a different review from a legal basis that existed first and failed later.
Establish the legal basis first
Start with the agreement, payment account and event said to have caused the failure. Only then can an initial absence be separated from a later failure of the legal basis.
When section 1435 covers a legal-ground failure
Section 1435 of the Austrian Civil Code concerns a performance given as a genuine debt. The giver may reclaim it when the legal reason for the recipient to retain it has ceased. The starting point is therefore an initially viable basis for keeping the payment.
The review needs two points in time. First establish why the recipient was entitled to retain the payment. Then identify the event that ended that basis. A later dissatisfaction with the performance does not answer that question by itself.
In an ongoing business relationship, the article on open current-account balances can help separate payments, statements and later changes. The restitution claim still depends on the legal basis actually agreed.
Why later knowledge matters
Section 1437 describes the classification of a recipient of a payment made without debt as a good-faith or bad-faith possessor. The relevant question is whether the recipient knew of the payer mistake, had to infer it from the circumstances or had no such knowledge.
For a later failure of the legal basis, that statement must be applied to the specific claim. Review the receipt of a notice, knowledge of a contract change and the circumstances from which the recipient had to infer that the benefit could no longer be retained.
The timing is therefore a separate evidentiary issue. A notice received after use gives a different basis for assessment from proven knowledge before use. A general assumption about good or bad faith cannot replace that time-based review.
What to review when the benefit is gone after knowledge
The fact that a benefit is no longer in the same account does not end the review. Separate receipt of the benefit, its actual use, the date of use and the recipient knowledge that retention was no longer justified.
Section 1437 contains a special limitation for a minor or an adult lacking legal capacity. In that case, the giver may reclaim the mistaken payment only to the extent that it remains with the recipient or was used for the recipient benefit. Whether that rule applies depends on the person and on the claim being pursued.
Section 335 describes wide consequences of bad-faith possession. The specific restitution assessment must therefore establish whether the recipient already knew of the missing entitlement when using the benefit or had to recognise it from the circumstances. Bank records, acquisitions and internal transfers can show the sequence.
The sequence matters: A chronology that connects the legal-ground failure, recipient knowledge and later use gives the restitution and disenrichment assessment a reliable foundation.
Which evidence supports the restitution claim
The first group concerns the original legal basis. It may include the agreement, invoice, payment approval and the document showing why the recipient was initially entitled to retain the payment.
The second group concerns the failure. This may be a termination agreement, reversal arrangement, effective ending or another documented event. The documents should show what changed and when the change took effect.
The third group concerns knowledge and use of the benefit. Letters, emails, call notes, account statements and payment records should be linked to receipt and use dates. In an assumption of debt or contract transfer, also identify which person was affected from which date.
Which situations require a separate assessment
A payment made without any debt from the outset requires a different review from a payment that was initially justified and lost its legal basis later. The first situation focuses on the absence of a debt at payment. The second starts with section 1435.
This article also does not address mere use of another person property or a damages claim. Those claims have their own requirements, including a legal violation, loss or the calculation of an advantage.
A reversal can also be governed by special contractual or withdrawal rules. Before sending a demand, establish what is to be returned, what originally supported the payment and whether a specific reversal rule controls the case.
How the firm reviews the next step
BRANDAUER Rechtsanwälte first place the legal basis, its failure, knowledge and disenrichment in one chronology. The next review identifies which documents support each date and which objections by the recipient may be expected.
This makes it possible to decide whether a reasoned repayment demand, a settlement or court proceedings are appropriate. The value of the claim and the strength of the evidence belong in the same decision.
You can use the form to send the key facts and the relevant document references. Submission of the form does not establish a client relationship.
Frequently asked questions
Can a payment that was initially owed be reclaimed later?
Section 1435 may apply when the legal reason for retaining the payment later ceased. The agreement, payment and event causing the failure must fit together.
Is a benefit automatically no longer recoverable once it has been transferred?
The transfer alone does not answer the issue. The claim basis, date of use, recipient knowledge and legal treatment of the disenrichment must be assessed together.
When can the recipient be treated as acting in bad faith?
For a payment made without debt, section 1437 refers to knowledge of the mistake or circumstances from which it had to be inferred. A later legal-ground failure still requires a time-based assessment of the specific facts.
Which documents should I collect for the first review?
Prepare the agreement, payment proof, account statement, documents concerning the failure, notices to the recipient and evidence of later use in chronological order.
Disenrichment, Legal basis, Restitution, Unjust enrichment, Section 1435 Austrian Civil Code, Section 1437 Austrian Civil Code, Austria