You Might Be Thinking…

“A defect is a defect – I can always withdraw from the contract.”
Not exactly. The law distinguishes between material and non-material breaches of contract – and your remedies differ accordingly.

Clients Often Ask Me…

• When is a thing considered defective?

• What counts as a material vs. non-material breach?

• What rights do I have in case of defective performance?

• Do I have to notify the seller of my choice immediately?

• What about hidden defects?

Legal Framework in Brief

• Section 2099 Civil Code: Goods are defective if they don’t have the qualities required under the contract (§ 2095–2097).

• Section 2100 Civil Code: The decisive moment is when the risk of damage passes (typically on handover).

• Section 2106 Civil Code: In case of material breach, the buyer has four remedies.

• Section 2107 Civil Code: In case of non-material breach, the buyer has more limited remedies.

• Sections 2111–2112 Civil Code: Defects must be reported in time, otherwise the rights lapse.

Material vs. Non-Material Breach of Contract

• Material breach: If the buyer had known of the defect, they would not have entered into the contract at all.

• Non-material breach: A defect that makes use of the goods more difficult but would not have prevented the contract.

Overview of Remedies from Defective Performance

Practical Examples

1. Material Breach

Buyer orders a production line, but the delivered line doesn’t meet the technical specs at all → buyer may withdraw and claim refund.

2. Non-Material Breach

Buyer purchases a refrigerator with a scratch on the door → buyer can claim repair or discount, but not withdrawal.

3. Hidden Defects

Buyer purchases a flat, and after two years a structural roof defect appears → if reported in time, rights from defective performance still apply.

Risks and Common Mistakes

• Late defect notification → buyer loses rights.

• Wrong choice of remedy → buyer chooses repair but later wants to withdraw → not possible without seller’s consent.

• Confusion between statutory warranty and rights from defective performance → they are distinct concepts.

• Vague contract terms → disputes over what counts as a “defect.”

Lawyer’s Checklist

✔ Distinguish between material and non-material breach.
✔ Always report defects in writing and promptly.
✔ If you want to withdraw, you must state this when reporting the defect.
✔ Know the deadlines: 2 years for movables, 5 years for real estate.

FAQ

Do I have to state my chosen remedy immediately?
Yes – when reporting the defect, you must indicate whether you want repair, replacement, discount, or withdrawal (in case of material breach).

What if the defect appears later?
If it stems from the seller’s breach of duty, the buyer may still claim it.

Does this also apply to consumers?
Yes, but consumers enjoy stronger protection (e.g., presumption of defects within 1 year of delivery).