Unpaid invoice: default, default interest, Skonto and retention for electrical contractors

The final invoice has been open for six weeks. Call, send a reminder, keep working, or not even start the next stage — what is permissible depends not on the customer's tone, but on four questions the Swiss Code of Obligations (OR) answered before the invoice was ever issued.

Due is not the same as in default

The article on quote variations shows that payment falls due on delivery of the work (Art. 372 para. 1 OR). Due means: owed, and enforceable. That does not yet automatically put the customer in default.

Art. 102 OR distinguishes two routes there:

• Without a fixed due date, the customer is put in default only by a formal reminder (Art. 102 para. 1 OR): an informal but unambiguous demand to pay now.
• With an agreed due date — "payable within 30 days of the invoice date" is one — the customer falls into default automatically when that period expires, without any separate reminder at all (Art. 102 para. 2 OR).

In practice this means: a payment term on the invoice is not a courtesy note, but the legal basis for when you can act without first having to send a reminder.

Default interest — 5 %, unless otherwise agreed

Once the customer is in default, from that moment he owes default interest of 5 % per year (Art. 104 para. 1 OR) — whether or not any actual loss has arisen. A higher rate applies only if it was agreed in the contract (Art. 104 para. 2 OR); without such an agreement it stays at 5 %.

This is a statutory claim, not a lever that first has to be enforced — it arises with the default itself. Whether it is worth claiming on smaller amounts is another question, but it belongs in every second reminder, not only in the debt enforcement proceedings.

How many reminders the law requires: none, or one

The "three reminders before debt enforcement" are commercial custom, not a legal duty. If a due date has been agreed, the customer is already in default under Art. 102 para. 2 OR before a single reminder has been sent — debt enforcement (Betreibung) under the SchKG, the Debt Enforcement and Bankruptcy Act, is possible from that point. What the law requires is default; how many reminders a contractor sends beforehand as a goodwill gesture is its own decision, not a precondition.

Skonto: a contract clause, not a statutory deduction

A Skonto — an early-payment discount such as "2 % if paid within 10 days" — is not regulated in the OR; it is a payment term the contractor writes on the invoice itself, and it applies only under the stated condition. Two points regularly overlooked in practice:

• The deadline is part of the condition, not a recommendation. If the customer pays only after the Skonto period has expired but deducts the Skonto amount anyway, the payment is incomplete — the balance remains open and can fall into default under the rules above, default interest included.
• A Skonto changes nothing about when the invoice is due. The invoice remains due for the full amount; the Skonto is a reduction for paying quickly, not a second, lower invoice amount.

Retention: two different things that go by the same name

"The customer is holding something back" describes, in practice, two legally different situations, and only one of them is the customer's without further ado.

A price reduction for a defect is provided for by law. If the customer notifies a defect after delivery in the proper form and in time (Art. 367 para. 1 OR), then for a defect that is not substantial he can demand a deduction from the price corresponding to the reduction in value (Art. 368 para. 2 OR). That is a statutory right, but it requires an actual, notified defect — not a general "just to be safe".

A flat-rate security or warranty retention — usually a percentage of the final invoice, held back until the end of the warranty period — is, by contrast, not a statutory figure. The OR provides for nothing of the kind; it is a contractual arrangement that must be expressly agreed, usually by reference to a standard such as SIA 118. If the quote or the contract says nothing about it, the customer has no right simply to take such a retention for himself — the full price is due on delivery (Art. 372 para. 1 OR), regardless of a warranty period still running.

For the contractor, the genuinely useful rule follows from this: a retention belongs in the quote, before it becomes a point of dispute on the final invoice. If the quote says nothing, the starting position is the statutory one — due in full on delivery, with a deduction only for a defect that has actually been notified.

Related articles

Which pricing form — fixed price, cost estimate or Regie — determines when payment falls due and whether a variation is possible is covered in the article "Quote variations". What separates initial verification, final inspection and acceptance inspection is shown in the article "Initial verification, final inspection, acceptance inspection". Whether and when a payment can be demanded while the job is under way is shown in the article "Asking for an Akonto as an electrical contractor".

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Sources: Swiss Code of Obligations (OR, SR 220), Art. 82, 102, 104, 367, 368 and 372, fedlex.admin.ch, version retrieved on 3 September 2026. Where the articles are quoted, they are rendered from the official text. This article does not replace legal advice: whether a defect is substantial or minor within the meaning of Art. 368 OR, and which retention or Skonto arrangements apply in a given case, is a question of the contract concerned and, in a dispute, for the court.