Guarrantee, Warranty, Product Liability under German Law

It happens really frequently that the customer (private or business customer) receives a product or service from you and then declares deficiencies. In this case, your customer can make claims based on:

• Warranty: legal liability of the seller
• Guarantees: voluntary liability of the manufacturer or seller
• Product liability: statutory liability of the manufacturer or the importer or, as the case may be, the seller / supplier

Warranty: legal liability of the seller

The warranty (Gewährleistung) is a legal liability. Thanks to this warranty, the customer can assert deficiencies within a legally prescribed period of time.

Excluded from the warranty are:

• Use-related wear and tear
• Defects known to the buyer at the time of the purchase
• Custom´s own fault (for instance, improper use, incorrect storage etc.)

Supplementary Performance (Nacherfüllung)

If the goods you delivered have defects, the private customer can initially ask a "supplementary performance" from you as a seller (dealer, supplier). "Supplementary performance" means the removal of defects or the replacement with a defect-free product. However, this has to be practically possible. And: it must not be a question of low-quality goods of everyday life.

Cancellation of the contract

If the buyer is not satisfied with the product, he can withdraw from the purchase contract (Rücktritt) and demand – if he has already paid - the purchase price back. It is not a matter of whether the seller himself has caused the defect or not, as it may also have been caused by the manufacturer or a third party. The customer can also request the purchase price to be reduced if he decides to keep the product with defect.

Compensation for damages

At the same time, the customer can claim for damages, but only if the seller (dealer, supplier) has the fault itself, or if the so-called "Nacherfüllung" did not work. If the "supplementary performance" is possible, the buyer can also claim compensation for the elimination of the defect. He can also demand for direct consequential compensation for damages (loss of use, loss of profit) at the seller.

Guarantee against business customers:

When selling to business customers, the warranty period is generally one year based on the general terms and conditions of the business. However, companies must check the goods directly at the "risk transfer" (goods receipt- Wareneingang) in order to immediately assert deficiencies. If deficiencies are detected after the goods receipt, the customer shall prove that the defect already existed at "risk transfer".

Warranty between manufacturer and dealer:

If you as a dealer have to accept defective goods from your private customer, you can also assert warranty claims with the manufacturer of the product, if it is a hidden defect which they could not have discovered upon receipt of the goods. If, however, the seller has not resold the goods directly, but has been in stock for some time, claims against the supplier may already be statute-barred. Claims of final-customer sellers to their suppliers become statute barred after five years. The warranty period can be reduced to one year for new and used items.

Guarantee: voluntary liability of the manufacturer or seller

The guarantee is a voluntary service provided by the manufacturer. It varies according to manufacturer and product and usually consists of a period of time between 6 months and several years. The guarantee is an additional benefit offered by the manufacturer. It is independent of the statutory guarantee. The guarantee is undoubtedly also a marketing tool. For example, many companies offer a longer guarantee period than the statutory warranty period. In addition, they are usually used not only for defects that were present at the time of delivery, but also for defects occurring during the warranty period.

The guarantee partner is the contact person who has given the guarantee.

Product liability: statutory liability of the manufacturer or the importer or of the seller / supplier

The manufacturer shall be liable for damages resulting from the use of a product. This is regulated by the Product Liability Act. Claims may be asserted up to 10 years after the product is placed on the market. The period of limitation shall be three years and shall start when the “injured party” is aware of the damage, and knows who the person liable for compensation is. Claims under the Product Liability Act are independent of whether the customer has entered into a contract with the manufacturer or not. They are also independent of the warranty claims that the customer has against the seller. And: The liability can not be restricted.

As a rule, the manufacturer always bears liability to the final product, although exceptions may be present.

Considering the difficulty of the matter, we would kindly ask you to contact us in case of further questions. A legal consultation will help you solve all the problems regarding guarantee, warranty or product liability.