Werkvertrag vs Time-and-Material for Austrian SaaS: Legal Mechanics and Bookkeeping

Quick verdict: a Werkvertrag means a signed Statement of Work, legally binding the contractor to deliver a defined result under Austrian ABGB §1165 and following. The contractor bears scope risk. Time-and-material bills by the hour, the client bears scope risk, and the legal relationship lives closer to a Dienstvertrag-adjacent consulting model. The matrix below covers ownership, acceptance, VAT, bookkeeping, and the most common founder mistakes.

This is a legal-mechanics post, not legal advice. We work with an Austrian commercial lawyer for the actual contracts. The point here is to give you the conceptual map so you can engage your own lawyer with clear questions instead of paying them to explain the basics.

What is the legal difference between Werkvertrag and Time-and-Material?

Austrian civil law (ABGB) draws a hard line between three contract types: Werkvertrag (contract for work, owes a result), Dienstvertrag (employment contract, owes labor under direction), and freier Dienstvertrag (free service contract, owes labor without integration into the company). A typical Wavect fixed-price engagement is a Werkvertrag. A typical T&M engagement at Wavect is structured as a freier Dienstvertrag or a Werkvertrag with hourly billing against a defined scope; the structure is chosen with the client's lawyer.

What does Wavect's fixed-price Werkvertrag actually commit to?

A Wavect Werkvertrag binds us to deliver a defined SoW for a defined fee. If we underestimate the work, we eat the cost. We do not bill extra for being wrong about complexity. What we do not do is offer a deadline-refund clause; the German term Werkvertrag does not mean "refund if late", it means "legally bound to deliver the agreed result". Client remedies under Austrian law follow the standard Gewährleistung regime: improvement (Verbesserung), price reduction, or in serious cases withdrawal. The contract spells out the milestone schedule and the acceptance criteria so both sides know when the work is done.

How does acceptance work under ABGB §1167?

The client inspects the delivered result and either accepts it, rejects it with specific defects listed, or accepts with reservations. Silent acceptance applies after a reasonable period if no objections are raised. For software, "reasonable period" is usually 2 to 4 weeks of UAT, spelled out in the SoW. The acceptance criteria themselves are part of the SoW so there is no argument about whether a deliverable counts as done. Ambiguous acceptance criteria are the single biggest source of Werkvertrag disputes; we run an explicit acceptance-criteria sprint at the end of discovery.

Can a Werkvertrag include change requests?

Yes, and it should. The SoW carries a change-request clause that defines how out-of-scope work gets priced (usually an hourly rate or a mini-Werkvertrag per change) and how the timeline shifts. The original scope and price remain bound. The change becomes its own line item. This is the trap most founders fall into: they sign a Werkvertrag, then ask for "just one more thing" weekly, and end up confused when the project misses the original deadline. The clause exists for a reason. Use it.

Is a Werkvertrag taxed differently in Austria?

For VAT, no. Both Werkvertrag and T&M invoices carry the same 20 percent Austrian VAT, with EU reverse-charge for B2B cross-border. The difference is on the client side in bookkeeping. A Werkvertrag with milestone payments is typically capitalized as a project asset under Austrian UGB rules until the deliverable is accepted, then expensed or amortized depending on whether it qualifies as a self-developed intangible. T&M is straightforward operating expense, recognized monthly. Talk to your accountant before signing, especially if you are pre-revenue and care about how the spend hits your P&L.

"Contract clarity is risk mitigation. Vague scopes do not save legal fees, they multiply them."

What happens if the scope is ambiguous?

Under Austrian law, ambiguity in a Werkvertrag is typically interpreted against the drafter (contra proferentem), and the drafter is usually the contractor. So ambiguous scope hurts Wavect. That is why we invest heavily in the discovery and SoW phase, often as a separate paid engagement before the main Werkvertrag is signed. See our agile fixed-pricing model for how we structure that. If you are negotiating a Werkvertrag with any vendor and the scope is two paragraphs long, do not sign. Pay for a proper SoW first.

When is Time-and-Material the right choice?

Three honest cases:

1. The scope is genuinely unknown. Pure research, early prototyping, integration work where the third-party API is undocumented. Fixed price here is gambling.
2. Embedded long-term work. When Wavect provides ongoing capacity to a client team for 12+ months, T&M with a monthly cap is cleaner than a stack of Werkverträge.
3. Maintenance and small-change retainers. Agile bug-fix work, occasional feature tweaks, on-call. A retainer with hourly billing is the right shape.

For everything else, where the scope can be defined and the budget needs to be capped, Werkvertrag wins. See the deeper comparison with generalist agencies at Wavect vs dev agencies for how this plays out in practice.

What about Sprints inside a Werkvertrag?

Yes, you can run Sprints inside a Werkvertrag. The Werkvertrag defines the final result; the sprints are the delivery mechanism. The client gets reviews every 1 to 2 weeks. The contractor gets to flag scope drift early. This is the "agile fixed price" model. It works because the SoW is written at the right level of granularity: outcomes and acceptance criteria, not user-story-level detail.

How does Wavect actually structure SaaS engagements in Austria?

Three typical shapes from our software development service:

• Discovery Werkvertrag. 1 to 3 weeks, fixed fee, deliverable is a written SoW and architecture plan. Always Werkvertrag.
• Build Werkvertrag. 2 to 6 months, fixed fee against the discovery SoW. Milestone billing.
• Operate retainer. Ongoing, monthly cap, T&M billing. Picks up after launch.

Each is its own contract. The client can stop after any of them without dependency. That is by design.