OGH on the Right to Choose between Obtaining a Remedy or a Refund

Jul 15, 2022 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (OGH) has more precisely explained when buyers are bound by their choice between obtaining either a remedy or a refund of the purchase price (Section 932 Austrian General Civil Code).

The plaintiff bought a new car from the defendant. After handover, the plaintiff noticed initial defects, which were subsequently repaired. Later, water seepage occurred, which led to a further repair. Even then, water later entered again. To repair this damage, the plaintiff had already arranged another repair appointment, but then cancelled it because he had lost confidence in the vehicle. He declared his withdrawal from the contract and demanded that the contract be rescinded, while maintaining his basic willingness to exchange the vehicle.

The defendant refused because remedy is the primary legal means of resolvement.

The court of first instance found in favour of the plaintiff. Since the initial attempt at remedy had failed, the plaintiff could now resort to secondary redress, i.e. a price deduction or a refund.

The court of appeal, on the other hand, held that the plaintiff had granted the defendant a new attempt at remedying the defect by giving the plaintiff another repair date. He was bound by this choice.

The Austrian Supreme Court, again, ruled in favour of the plaintiff:

In principle, a buyer can demand a price reduction or cancellation of the contract after the first unsuccessful attempt at repair. However, buyers have a choice: They can grant the seller a second attempt at improvement or switch to secondary remedies. However, once the choice has been made by the buyer, it is binding.

The Austrian Supreme Court assumed, however, that the agreement on a date for a possible further repair does not yet constitute a decision by the plaintiff between repair and rescission, and indeed cannot be understood as such. At this point in time, neither the plaintiff nor the defendant were able to foresee why the problem had reoccurred and at what expense this possible defect could be remedied. The purpose of the appointment was therefore initially to ‘diagnose the problem’ and not to immediately carry out the repair.

OGH 9 Ob 83/21b (19.05.2022)