Reversal

The reversal of a purchase contract due to a defect / Rückabwicklung eines Kaufvertrages

February 15, 2018

If the buyer has received goods that do not correspond to what he/she expected, the question arises as to whether the buyer will receive a refund of the purchase price and, if so, under what conditions. Legally, the reversal is a withdrawal from the contract.

Requirements for withdrawal from the purchase contract

The basic requirement for the rescission of a purchase contract is the existence of a defect. According to section 434 of the German Civil Code (BGB) a defect of the purchased item exists if the goods do not correspond to the agreed quality. This is the case if the actual condition of the goods deviates negatively from the intended condition of the goods. The condition can either be expressly determined by agreement (e.g. "The car has been riven 10,000 km") or specified by a contractually determined use ("The car is suitable for off-road use") or by the usual use (the car can be driven).

The existence of a defect entitles the seller to exercise the warranty rights under section 437 BGB. Pursuant to section 437 no. 1 BGB, the buyer can demand subsequent performance from the seller pursuant to section 439 BGB, i.e. delivery of a new item as replacement or repair of the originally defective item. In the event of so-called “single goods”, i.e. goods that cannot be replaced due to their special characteristics, supplementary performance in the form of subsequent delivery is excluded due to impossibility. In this case, supplementary performance is limited to rectification of the defect. If rectification is excluded due to the nature of the defect, e.g. because the item is irreparable, then supplementary performance in its entirety is ruled out.

The Buyer shall then only be entitled to the further warranty rights for material defects under section 437 no. 2 and no. 3 BGB. According to section 437 No. 2 BGB, the buyer may withdraw from the contract in the event of a defect.

Possible exclusion of defect rights?

The warranty rights can generally be excluded by the seller unless he/she is to be regarded as an entrepreneur, because then the exclusion is ineffective according to section 476 (1) BGB. It follows that an exclusion of warranty is possible among private persons.

However, according to section 442 (1) BGB, an exclusion of warranty cannot be effectively agreed in the case of a so-called guarantee of quality. For the acceptance of such a guarantee of quality it is decisive whether the seller has assured the absence of the defect in such a way that the buyer could fully rely on it. This is always assumed if the seller has particularly emphasised a certain property of the item or answered a corresponding question of the buyer.

Consequences of exercising the right of withdrawal

If the buyer withdraws from the contract, a debtor/guarantor relationship arises and the classic reversal of the contract becomes necessary. The buyer must return the goods to the seller against return of the purchase price. The seller must always be given the opportunity to convince himself/herself of the existence of the defect. For this purpose, the goods must be returned in the case of distance contracts. According to section 439 (2) BGB the seller has to bear the costs necessary for the purpose of supplementary performance, i.e. also the costs of the return shipment. Such a provision does not exist for withdrawal from the contract. According to the prevailing view, the seller must then collect the goods from the place where they are located according to the contract. This place is the place of performance for the withdrawal, which also applies to the statutory right of withdrawal. Therefore, in the case of withdrawal, the buyer is not obliged to send the goods to the seller and does not have to pay the costs.