15.03.2018

Germany: Amendments to the Warranty Law as of 1.1.2018

Up to now, a consumer who has installed a defective item into another item, such as a house, has not only been entitled to claim from the seller the

 delivery of a new and defect-free item, but also for assumption of the costs for removing the defective item and installing the new defect-free item. However, the seller was only able to pass on the installation and dismantling costs he incurred as a result of the supplementary performance to his supplier if the supply was at fault. If the supplier was not at the same time the manufacturer of the item, fault on his side was usually denied.

The same applied in cases where a craftsman was obliged to make subsequent performance at his customer’s premises due to defects in the material he used. He, too, was only entitled to claim reimbursement of the installation and dismantling costs incurred by him as a result of subsequent performance from the supplier of his material if the supplier was at fault.

The law of 28 April 2017, made changes to the law on defects under commercial law, which affect not only consumers but also entrepreneurs and suppliers within the supply chain. The corresponding amendments to the German Civil Code came into force on 1 January 2018.

 

Now the supplier must carry out the removal and installation or bear the costs connected with it in the context of his legal obligation to remedy defects not only in B2C relationships, but also in B2B relationships.

Pursuant to the new version of § 439 sect. 3 sentence 1 BGB (German Civil Code), the seller is now obliged, within the scope of subsequent performance, to reimburse the buyer for the necessary expenses for the removal of the defective goods and for the installation or affixing of the repaired or delivered defect-free items, if the buyer has installed or affixed the defective goods in or to another item according to their type and their intended use. The provision does not differentiate whether the buyer is a consumer or an entrepreneur or company. It only takes effect, however, if the defective object of sale is to be installed or affixed according to the type of object and its intended use, e. g. building materials which are usually assembled with or incorporated into other parts.

Furthermore, the scope of application of the facilitated recourse of the entrepreneur against his supplier was extended with regard to the costs of supplementary performance. The newly introduced § 445a Abs. 1 BGB gives an independent claim of the last seller in a supply chain against his supplier for reimbursement of expenses incurred by the last seller in connection with subsequent performance. The precondition is that the defect was already present at the time of transfer of risk between the supplier and the last seller. In the process of asserting the seller’s rights against his supplier, an otherwise required deadline is waived, if the seller had to take back the item or reduce the purchase price as a result of its defectiveness.

These recourse provisions also apply in the wider supply chain, i. e. the supplier can pass on the costs to his supplier if the purchased item was defective at the time of the corresponding transfer of risk.

The limitation period for these claims against the supplier is two years; it shall commence at the time of delivery of the purchased item to the respective buyer. In order to enable the warranty claims of the final seller to be passed on to the previous sellers, the statute of limitations against the previous seller shall expire no earlier than two months after the time at which the seller has fulfilled the claims of the buyer. However, the suspension of expiry shall end no later than five years after the previous seller has delivered the goods to the last seller.

Contact person: Damian Wypior, German Attorney at Law