Used Car with Oil Leak – OGH Rejects Contract Rescission

Sept 3, 2026 Benn-Ibler Rechtsanwälte

In a recent decision, the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) addressed the question of whether a safety-relevant defect in a used car automatically entitles the buyer to rescind the contract.

A defect that impairs the roadworthiness and operational safety of a used car as warranted by the seller, but can be remedied at relatively minor expense, does not automatically entitle the buyer to rescind the purchase contract. Rather, a balancing of interests is decisive.

In the case at hand, the claimant had purchased a used car from a vehicle dealer, which had been classified by the defendant as ‘sufficiently roadworthy – Class 3’. However, once the vehicle was delivered, it was clear that an oil leak compromised both its roadworthiness and operational safety.

The defendant dealer was willing to rectify the defect. Moreover, the repair could have been carried out at relatively minor cost in relation to the purchase price. Nevertheless, the claimant, invoking the warranty, demanded the rescission of the purchase contract.

The appellate court initially ruled in favour of the buyer. It classified the defect as serious and relevant to safety, and took the view that, for this reason, the plaintiff could immediately demand rescission of the purchase contract. Whether the defect could be remedied easily and at low cost was not deemed decisive.

The OGH took a different view and upheld the dealer’s appeal. Considering a preliminary ruling obtained from the Court of Justice of the European Union (CJEU), the Court held that the mere fact that a defect is relevant to safety is not, in itself, sufficient to constitute a serious breach of contract. Rather, the justification for rescinding the contract must be determined by balancing the interests of the parties.

In the present case, this was to be answered in the negative.

OGH 3 Ob 122/26a (20/07/2026)