OGH: Warranty - transferor may inspect item beforehand

Jun 16, 2021 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, OGH) has ruled that it follows from the priority of subsequent performance (improvement) in warranty law that the transferee must make the defective item available to the transferor for inspection.

In the present case, the plaintiff bought a car from the defendant used car dealer in Germany. He then had the annual service carried out at a garage, where a leak was discovered in a gap between the two engine parts. This led to oil loss. After a first repair, the car continued to lose oil, so that the workshop suggested a further repair at a significantly higher price.

The plaintiff then contacted the defendant and invoked the warranty because he had sold him a defective car. The defendant offered to pick up the car and repair the defect. The plaintiff only agreed to this on the condition that the defendant would also bear the costs for the first repair, which he considered "useless". The defendant refused to do so.

The plaintiff then demanded repayment due to annulment of the contract. He was entitled to withdraw from the contract because the defendant had refused to make the improvement. The defendant replied that the improvement had been thwarted by the plaintiff because he had not given him the opportunity to check the defect. He had wrongly made the collection of the car dependent on the reimbursement of the costs of the unsuccessful repair.

The OGH ruled that the transferor must have the opportunity to inspect the (allegedly) defective goods. Otherwise, the transferor could neither invalidate a wrongly asserted warranty case nor determine whether and how an improvement could be made. The transferor could not be expected to accept an obligation (such as the assumption of the unsuccessful repair costs) without prior examination.

Since the plaintiff had thus prevented the improvement, his claim was dismissed.

OGH 8 Ob 5/21z (25.03.2021)