Cancellation already after failure of the first repair attempt

Created by Thomas Hörantner, LL.M. |
Civil Law , Contract Law


The plaintiff purchased a new car from the defendant for EUR 36,083.00. The vehicle was handed over on 31.10.2019.

Plaintiff subsequently noticed that the door gaps did not match. This was repaired by the defendant in late November/early December 2019.

On December 22, 2019, there occurred a massive water ingress above the passenger seat. Therefore, the car was again at the defendant's for repair in January 2020. The cause of the water ingress could again not be corrected. Although sealant was applied in the affected area, it was not sufficient or was applied in the wrong place.

At the end of January and the beginning of February, there was once again water ingress in this area.

The plaintiff had agreed on a new repair appointment for 10.02.2020 on 30.01.2020, but cancelled this. He declared the resignation from the contract.

The defendant refused and pointed out to have repaired the damage and that the reason for the new water ingress had to be checked again.

The court of first instance ordered the defendant to pay EUR 33,583.00  concurrently against restitution of the vehicle.

The Court of Appeal overturned the first judgment and referred the case back to the court of first instance for a new decision.

Legal background

An item is defective if what has been provided does not meet what is owed. According to § 932 paragraph 2 ABGB, the buyer can initially only demand improvement or replacement of the item, unless the improvement or replacement is impossible or is associated with disproportionately high costs for the seller.

According to the decision of the OGH (see RS0018722[T2]), the buyer can already switch to secondary remedies if the first attempt of improvement fails.

The buyer has the choice of granting the seller a second attempt at repairs or switching to the secondary warranty remedies. If the buyer has made a choice, he is bound to it (§ 906 ABGB).

Decision of the OGH (9ObA103/21v)

The Supreme Court stated that the leak that led to the water ingress had already existed at the time of handover. The plaintiff could initially only demand replacement or repair. The plaintiff satisfied this requirement by giving the defendant the opportunity to remedy the defect after the water ingress. Since the defendant ultimately failed to remove the cause of the water ingress, the plaintiff was entitled to switch to the secondary remedies.

However, in the specific case it had to be examined whether, in the light of § 906 ABGB (Austrian Civil Code), a binding choice between a further attempt at improvement or cancellation of the contract had been made by agreeing on a further appointment.

The Supreme Court stated that in the specific case, the agreement of a date for a possible further repair did not yet represent a decision by the plaintiff between improvement or cancellation of the contract and could not be understood as such. At that time, neither the defendant nor the plaintiff could foresee why the problems would occur again. Therefore, the agreed appointment initially served the parties to clarify the problem and to discuss the further course of action and was therefore for the "diagnosis" of the defect and not directly for the repair.

For this reason, overall, it cannot be assumed that the plaintiff's decision to grant a further improvement option was binding and as a result the plaintiff was entitled to demand cancellation of the contract.

The Supreme Court thus upheld the plaintiff's appeal, ruled on the merits itself and restored the first judgment.