BGH: Lack of manufacturer’s warranty when purchasing a car may represent a material defect

The lack of a manufacturer’s warranty when purchasing a used vehicle may represent a material defect that justifies the buyer rescinding the purchase agreement. That was the verdict of the Bundesgerichtshof (BGH), Germany’s Federal Court of Justice.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: The purchase agreement is an important pillar of sale of goods law. Disputes are most likely to occur if the purchased product features a material defect or a defect of title. The Bundesgerichtshof had to rule on whether the absence of an advertised manufacturer’s warranty when buying a used vehicle constituted such a defect justifying the buyer’s rescission of the purchase agreement.

In the present case, the plaintiff had bought a used vehicle at a car dealership. The latter had promoted the vehicle on its internet platform based, among other things, on a manufacturer’s warranty that was still valid. Shortly after buying the vehicle, problems emerged with it that necessitated repairs to the engine. The manufacturer initially carried these out free of charge, but subsequently refused to perform further services under the warranty and demanded some of the costs back for the repairs which had already been made. It justified this by stating that an assessment of the engine had shown the car’s mileage reading had been tampered with. According to this, the manipulations took place before the plaintiff had purchased the vehicle.

The plaintiff rescinded the purchase agreement on account of the lack of a manufacturer’s warranty and demanded that the dealership reimburse the purchase price as well as the costs incurred. The claim was unsuccessful before the courts of lower instance. They ruled that a manufacturer’s warranty did not constitute a characteristic attribute of the vehicle. Instead, it represents a legal relationship between the owner of the vehicle and the manufacturer, which is not, however, directly related to the purchased product. As such, the lack of a warranty was not a material defect that justified rescinding the purchase agreement.

The BGH reached a different conclusion in its ruling of June 15, 2016 (Az.: VIII ZR 134/15). It held that the existence of a manufacturer’s warranty is in fact a characteristic attribute when buying a vehicle. It went on to say that characteristic attributes of a purchased object are all those aspects which influence its valuation, including the manufacturer’s warranty, and that this point is particularly relevant in the context of purchasing a car.

Lawyers who are versed in the field of commercial law can advise on enforcing and fending off claims should the purchased object feature any defects.

https://www.grprainer.com/en/legal-advice/commercial-law/sale-of-goods-law.html