Rights from a defective performance in relation to a contract of sale

Rights from a defective performance in a contract of sale between entrepreneurs and from a consumer contract of sale.

In general, anyone who provides a performance for another for a fee must perform without defect. The subject of the performance must have the properties agreed upon by the parties or the usual properties so that the subject of the performance can be used according to the contract and, if known to the parties, also according to the purpose of the contract.

In addition to the rights arising from a defective performance, the buyer has the right to compensation for damages, as well as to the reimbursement of costs associated with the exercise of rights arising from a defective performance (e.g. postage, expert opinion).

The buyer must first exercise the rights arising from a defective performance with the seller. They can take their claim to court only if they are not satisfied with the settlement of the complaint.

Buying between entrepreneurs

The buyer's rights from defects depend on whether the defective performance is a substantial or unsubstantial breach of contract. A substantial breach is one where the party breaching the contract already knew or should have known at the time the contract was concluded that the other party would not have entered into the contract if it had foreseen the breach.

A substantial breach of contract entitles the buyer to

1. elimination of the defect, namely through replacement, delivery of a missing thing, or repair of the thing
2. a reasonable discount from the purchase price, or
3. withdraw from the contract.

The buyer must notify the seller of the right they have chosen without undue delay after notification of the defect - otherwise, they only have the rights as in the case of an unsubstantial breach of contract. If the seller does not eliminate the defects within a reasonable time, or notifies the buyer that they will not eliminate the defects, the buyer may request a reasonable discount from the purchase price instead of the elimination of the defect, or may withdraw from the contract.

An unsubstantial breach of contract only entitles the buyer to

1. elimination of the defect, namely through replacement, delivery of a missing thing, or repair of the thing, or
2. a reasonable discount from the purchase price.

The buyer's rights from a defective performance are subject to limitation. The buyer must notify the seller of the defect without undue delay after they could have detected it through a timely inspection and sufficient care. If it is a hidden defect, they must report the defect without undue delay after the buyer could have detected it with sufficient care, but no later than 2 years after the handing over of the thing.

However, the seller is not entitled to object citing limitation if the defect is the result of a fact of which the seller knew or must have known at the time of delivery.

Consumer purchase

The rights arising from a defective performance by buyers who are consumers differ from the general regulation in some respects. It does not matter whether the defect is a substantial or unsubstantial breach of contract. The specific rights that a consumer has from a defective performance depend on the possibilities and adequacy of the remedies. E.g. the buyer cannot request an exchange of a thing if the defect can be easily and quickly rectified. The buyer has the right to a replacement or to withdraw from the contract even in the event of a defect that can be removed, if the buyer cannot use the thing properly due to the recurrence of the defect after repair or due to a larger number of defects. The buyer can always request a discount on the purchase price.

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