Liability for defects

What it means

Liability for defects means that the seller or contractor bears the consequences when the delivered goods or work lack the qualities agreed in the contract, the usual qualities, or do not fit their purpose. It applies to both a purchase contract and a contract for work and arises regardless of fault.

Between businesses it is governed by the Commercial Code and the contract, which can change the statutory rules to a large extent. The buyer must inspect the goods as soon as possible after delivery and report defects without undue delay. For hidden defects the law sets an outer time limit from delivery, after which the claim lapses.

When selling to a consumer, the Civil Code and consumer protection rules apply, and a contract cannot restrict them. The consumer may demand repair, replacement, a price reduction or, for a material defect, withdraw from the contract. The procedure for exercising these rights is called a complaint.

How it works in practice

When reviewing clients’ terms and conditions, we check whether the deadlines for reporting defects, the warranty scope and the remedy options match what the company can actually deliver, and whether B2B terms are mistakenly being applied to consumers too.

We book an accepted complaint according to how it was settled. For a discount or refund we issue a credit note with a correction of the VAT base; for a replacement or repair the costs go to the period of settlement. Where warranty repairs are regular, we recommend a provision based on past experience.

When the client is the buyer, we help track deadlines: if a defect is not reported in time, the buyer loses even a clearly justified claim. We therefore recommend recording the date of receipt, the result of the incoming check and the date the complaint was sent, ideally together with the delivery note in one system.

What to watch out for

Liability for defects is not the same as a quality guarantee. A guarantee is a voluntary promise that the goods will keep their qualities for a certain time, and it can go beyond the law. Mixing up the two in a contract or in customer communication leads to disputes about who has to prove what.

Liability can be limited in a B2B contract, but not without bounds: excluding damages in advance, for example, is often void. Alongside defect claims, the buyer may also claim a contractual penalty if one was agreed, so the relationship between the two should be addressed expressly in the contract.