1. Introduction
In its decision 9 Ob 41/23d of 27 September 2023, the Supreme Court dealt with serious and minor defects within the meaning of the Consumer Guarantees Act (VGG) for the first time. To date, there has been no supreme court case law on this in Austria.
2. Facts of the case
The plaintiff (consumer, buyer) bought a car from the defendant (car dealer). This car had deformations and abrasions on the right rear wheel, which is why it was not roadworthy and safe to operate, and therefore would not have passed a § 57a Motor Vehicle Act inspection ("Pickerl"). This was not obvious to a layperson. The used car dealer did not point this out. The buyer demanded the cancellation of the purchase (cancellation of the contract). The car dealer then asked the buyer to take the car to his repair shop to have the damage assessed and repaired. The buyer refused and instructed a lawyer to enforce the cancellation.
The court of first instance and the court of appeal came to the conclusion that the defect represented a safety risk and was therefore so serious in accordance with § 12 Para. 4 Z 1 Consumer Warranty Act (Verbrauchergewährleistungsgesetz VGG) that the plaintiff consumer was entitled to cancel the contract immediately.
3. Legal judgement of the Supreme Court
The Austrian Supreme Court based its statements on legal materials and literature. According to the legal materials, an immediate cancellation of the contract is possible if this is justified due to the severity of the defect and the resulting impairment of use. This also presupposes a loss of trust in the contractual partner.
Therefore, a defect that is relevant to safety and impairs the consumer's ability to use the product normally generally justifies cancellation of the contract. However, a weighing of interests must also be carried out to determine whether the contract may actually be cancelled or whether the buyer must be satisfied with a corresponding price reduction. This balancing of interests must be carried out because the cancellation of the contract hits the seller harder than the price reduction.
However, the physical integrity of a person always outweighs the financial interests of a retailer. For this reason, the Supreme Court ruled in favour of terminating the contract in the case in question.
4. Conclusion
With this judgement, the Supreme Court has clarified that a defect that is relevant to safety and impairs normal use entitles the consumer to cancel the contract in any case, or at least to a price reduction. This applies even if it is easy to rectify.
A defect is always deemed to be serious if the item in question does not have the expressly or implicitly stipulated features.