It is not uncommon for buyers to confuse the various legal or contractual rights. It is often unclear to buyers what the right of withdrawal, the warranty or a guarantee is and what the differences are. But dealers also occasionally get stuck, especially if their customers do not express themselves clearly when making their claims. In this article we provide a brief overview of these three customer rights and their differences.
I. The differences between the right of withdrawal, warranty and guarantee
1. Right of withdrawal
When we talk about the right of withdrawal, what is usually meant is the consumer’s right of withdrawal in distance selling, especially in typical transactions on the Internet (online trading). There is also a right of withdrawal, for example in the case of so-called door-to-door sales.
If consumers are entitled to a statutory right of withdrawal, they have the option of withdrawing from the purchase contract with the seller for the purchased items by making a unilateral declaration (so-called declaration of withdrawal) to the seller and returning the withdrawn goods for a refund of the purchase price already paid.
A specific reason for the revocation does not have to be given. In principle, the goods do not have to have any special properties or meet any special requirements, such as being damaged or disliked. As a result, the consumer right of withdrawal is a right of consumers to return the goods to the seller without there being a specific reason or even having to be stated.
2. Warranty
The so-called warranty right must be strictly distinguished from the consumer right of withdrawal.
A buyer is entitled to warranty rights or so-called material defect rights under purchasing law if the purchased item is defective. A purchased item is particularly defective if it does not have the agreed quality at the time of transfer of risk, i.e. if it has a defect. In principle, warranty rights only exist if the purchased item had a defect upon delivery. Subsequent defects, damage or defects in the purchased item are therefore not taken into account unless they were already hidden during delivery.
However, under warranty law, the defectiveness of the purchased item alone does not mean that the buyer can simply return the purchased item to the dealer, even if he states the defectiveness of the purchased item as the reason for return when returning the purchased item. Rather, in such cases of warranty, the seller is entitled to (subsequently) fulfill the purchase contract with the buyer by providing the buyer with a defect-free item – by way of supplementary performance in the form of either a subsequent delivery of a defect-free item or in the form of subsequent improvement, i.e. repairing the damaged or defective item.
3. Warranty
Something completely different is a so-called guarantee, for example in the form of a manufacturer or dealer guarantee.
It is not uncommon for customers to talk about the guarantee when they actually mean the legal guarantee. While the warranty rights are prescribed by law and can only be modified within narrow limits through contractual arrangements by the seller to the detriment of the buyer, the guarantee is something that the manufacturer or dealer can voluntarily grant to its customers, but does not have to.
If a manufacturer or seller decides to grant a guarantee, for example on certain properties or other points of the purchased item, he must comply with certain legal information requirements. In addition, by declaring the guarantee and the guarantee conditions, the guarantor is obliged to fulfill or observe the rights of the customers announced in the guarantee when the requirements specified in the guarantee conditions are met.
II. Asserting individual customer rights
1. Clear exercise of customer rights
The assertion or exercise of customer rights arising from the consumer right of withdrawal, the statutory warranty right or from guarantees is carried out by declaration to the dealer or, in the case of a guarantee, also to the manufacturer if it is a manufacturer’s guarantee.
Both the consumer right of withdrawal (according to § 355 Para. 1 BGB) as well as the statutory warranty rights or rights to material defects under purchasing law must be exercised by declaration to the seller. There is no specific form for these declarations, so they could also be made orally. However, for documentation purposes alone, at least text form, such as email, is recommended.
The exercise of the rights arising from a guarantee must be carried out in accordance with the respective guarantee conditions, which can be structured differently.
2. Dealing with ambiguities when exercising customer rights
In practice, it is not uncommon that the customer asserts customer rights, for example in the form of an email, but does not clearly state which customer rights he would like to assert.
Some customers talk about exercising a right of return, which by law no longer exists in this form. At least at first glance, it is not always entirely clear whether customers want to exercise their right of withdrawal or – if there is also talk of a defect in the purchased item – whether they want to exercise their warranty rights. A distinction between these two customer rights in particular is particularly important because these rights not only have different requirements, but also different legal consequences, which customers should keep apart.
If a dealer cannot immediately recognize which right a customer wants to exercise, he should first try to understand this from the context of the customer’s communication, i.e. to interpret the customer request according to the customer’s wishes. If in doubt, a retailer should ask the customer which right he would like to assert, even if this is not clear enough for him from the context. This is important to avoid unnecessary misunderstandings.
III. The consequences of exercising these customer rights
1. Right of withdrawal
If a right of withdrawal is exercised in a formal and timely manner, the contract for the goods or services affected by the withdrawal will be ineffective and therefore reversed.
This means that the customer must return the goods that have already been purchased to the retailer within a specified period, usually 14 days after exercising the right of withdrawal. Conversely, the dealer must refund the purchase price already paid. Who has to pay the costs of returning the goods is determined by the law on the one hand and on the other hand this depends crucially on how the parties have effectively regulated or provided for this before the contract was concluded, for example in the dealer’s cancellation policy.
2. Warranty
The statutory warranty rights in sales law or the sales law rights regarding material defects do not provide that a buyer can immediately cancel or dissolve and reverse the purchase contract if the purchased item is defective.
Rather, the standard case of the law is that the buyer sets a deadline for the seller to remedy the defect in the purchased item – at the buyer’s discretion either by delivering a new, defect-free purchased item or by repairing the purchased item, which the buyer makes available to the seller for this purpose must provide. Only if the seller refuses to remedy the defect or the so-called supplementary performance fails for other reasons does the buyer have the option of withdrawing from the purchase contract and requesting a refund of the purchase price from the seller.
3. Warranty
If a customer claims warranty services against the manufacturer (manufacturer’s guarantee) or dealer (dealer’s guarantee), he is entitled to the rights and consequences against the manufacturer or dealer specified in the guarantee declaration.
For example, the warranty conditions may stipulate that a sealing ring on a coffee machine will be replaced by the manufacturer or retailer within five years of purchasing the coffee machine if it leaks. If this occurs, the guarantor must replace the sealing ring as stated in his guarantee declaration.
IV. The most important things in brief
The consumer right of withdrawal, the warranty right and guarantees are three completely different options for customers to assert certain rights against the seller or, in the case of the guarantee, also against the manufacturer. The consumer right of withdrawal is only available to consumers and only in certain constellations, such as for so-called distance selling transactions (e.g. B2C online sales) and also just for certain types of contracts. The right of withdrawal can be exercised by consumers without giving reasons. However, tight deadlines and formalities must be observed. Customers can only assert the statutory warranty or material defect rights if the item was defective when the risk was transferred. As a rule, however, it is not possible to demand that the purchase contract be reversed directly, but only that the defect be remedied. The buyer can only withdraw from the contract if the defect has failed to be remedied. In the case of a (voluntary) guarantee, the guarantor must provide the services promised in the guarantee declaration if the guarantee conditions are met. This basically has nothing to do with the legal warranty. If it is not clear to a seller whether a customer wants to exercise his right of withdrawal, his warranty rights or certain warranty rights, he should ask the customer to avoid misunderstandings.
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