If there are defects in the purchased item, the buyers have statutory rights against the seller, such as subsequent performance. However, the law allows the warranty to be contractually limited within certain limits. However, this is excluded in the case of defects that contradict a quality agreement. This is shown by a current BGH case.
I. The statutory warranty (rights against material defects)
The seller of a purchased item will § 433 BGB obliges through the purchase contract not only to hand over the item to the buyer or to obtain ownership of it, but also to be free from material and legal defects.
Whether a purchased item is free of material defects is essentially determined by the requirements of Section 434 of the German Civil Code (BGB). Accordingly, an item is free of defects if it meets the subjective requirements, the objective requirements and the assembly requirements when the risk is transferred from the seller to the buyer. The subjective requirements primarily mean the so-called quality agreement, through which the seller and buyer can bindingly agree on a specific quality of the purchased item. If the seller advertises the product to be sold in his sales advertisement or in his product offer with special properties of the product, which may be given special emphasis, the purchased item must actually have these special properties in order to be free of defects within the meaning of the law be.
If the special, agreed quality is missing, there is generally a material defect in the purchased item according to Section 434 Paragraph 1 of the German Civil Code (BGB), unless there is an effective other legal or contractual exclusion of liability. In particular, it could be that the seller and buyer have effectively contractually excluded liability in general for the warranty or possibly only under certain aspects.
II. Possible contractual limitations of liability
Dealers and buyers can not only agree that a purchased item should have a certain characteristic, but conversely also that the seller’s liability for defects in the purchased item (warranty or rights relating to material defects) should be excluded or at least limited under certain aspects.
However, the law provides for certain framework conditions within which the seller can exclude his liability. This applies in particular to liability exclusions in general terms and conditions (GTC), but also to warranty restrictions through individual contractual agreements, i.e. without these being pre-formulated for a large number of contracts. In any case, a seller is generally liable for defects that he has fraudulently concealed or concealed from the buyer (§ 444 BGB) .
III. No exclusion of the warranty in the event of an agreement on quality
1. The facts
A recent case before the Federal Court of Justice (BGH) concerned a 40-year-old used car that was sold by the seller with a general exclusion of liability (decision of April 10, 2024 – Ref. VIII ZR 161/23).
In this case, the buyer had purchased a vehicle from the seller as part of an online private sale, i.e. from consumer to consumer, that had first been registered 40 years earlier. The seller’s online sales advertisement contained, among other things, the wording:
“Air conditioning works perfectly. The sale is subject to the exclusion of any liability for material defects.”
A few weeks later, the buyer complained to the seller that the air conditioning system was defective and did not function fully, as had been guaranteed in the sales advertisement, and made warranty claims against the seller. The seller rejected the buyer’s claims and referred to the wording in the sales advertisement, according to which the sale of the vehicle took place with the exclusion of any liability for material defects and thus any warranty claims.
After the seller rejected the claims, the buyer decided to have the vehicle’s air conditioning system repaired on his own and then claimed the repair costs against the seller, i.e. demanding that they be reimbursed by the seller. The seller refused the refund, so the buyer ended up suing the seller. Ultimately, the case ended up at the BGH in the final instance.
2. The court’s decision
The BGH decided that the seller ultimately could not successfully rely on the exclusion of liability from the sales notice against the buyer.
According to the established supreme court case law of the BGH, in cases of a quality agreement, a parallel general exclusion of liability for material defects or for the warranty should be interpreted to the effect that this exclusion of liability should not apply to the absence of the expressly or tacitly agreed, special quality, but exclusively for other, additional defects.
These principles should also be applied to the case here. In particular, the disclaimer in the sales advertisement should not be interpreted as referring specifically to the functionality of the air conditioning system. What the buyer declared not only in the purchase contract, which was later agreed in writing, but also in the initially non-binding online sales advertisement, that the sale was taking place with the exclusion of any liability for material defects, should not be understood to mean that this exclusion of liability would also extend to the quality agreement. It is precisely the parallel nature of the quality agreement on the one hand and the exclusion of liability for material defects on the other hand that, from the point of view of the highest court jurisprudence, the generally formulated exclusion of liability would not refer to the specific, express quality agreement, here with regard to the functionality of the air conditioning system . If one were to view this differently, the quality agreement expressly made between the contracting parties would have no meaning. It would be superfluous, which can’t be intentional if it was explicitly made.
Contrary to the arguments of the lower courts, the BGH does not assume that the exclusion of liability is valid with regard to the functionality of the air conditioning system for other reasons. The lower courts had also noted that because of the age of the vehicle or the component in question and also because of the general wear and tear of the air conditioning system, an exception had to be made in this specific case and that the exclusion of liability had to also relate to the functionality of the air conditioning system. The BGH, in turn, sees this differently. Both the age of the vehicle and the wear and tear of certain components, such as the air conditioning, are important characteristics that typically play a role when buying a used item. However, this does not apply in the case of a specific quality agreement – as here – with regard to precisely these properties and a generally worded exclusion of liability.
IV. Contractual limitations of liability in purchase contracts
Against the background of this decision by the Federal Court of Justice, which ultimately merely confirms the existing supreme court case law on this legal question, the contracting parties can continue to contractually agree on restrictions on the warranty or the buyer’s rights to defects when selling goods.
If the seller regulates something in his general terms and conditions, the statutory warranty liability – especially when delivering newly manufactured items – is subject to strict legal protection under the general terms and conditions law §§ 305 ff. BGB. However, far-reaching contractual liability limitations with regard to the warranty are certainly possible in individual contracts and particularly in the case of used goods.
Note: Clients of the IT law firm who have booked one of the protection packages benefit from the best possible liability limitations in the legal texts that we prepare for them. To the extent that the law allows contractual limitations of liability, our clients can also use these in their contracts with their customers. Please feel free to contact us if you have any questions about our protection packages or our other services.
V. The most important things in brief
By law, sellers are generally liable for the absence of defects in the item they are selling. However, the warranty can be excluded through contractual agreements. This applies in the B2B and B2C sectors and also between private individuals. The law sets certain framework conditions for this. For example, within the framework of general terms and conditions in the B2C sector, an exclusion of the warranty is only possible within narrow limits. This is easier between private individuals or in the B2B sector, especially when it comes to used goods. However, if the seller and buyer have concluded an express agreement on quality, a general exclusion of the warranty in the sales offer or in the written purchase contract does not refer to the quality that was expressly agreed.
Tip: Do you have any questions about the article? Please feel free to discuss this with us in the
Entrepreneur group of the IT law firm on Facebook.