Case law

  • Case Details
    • National ID: VIII ZR 3/06
    • Member State: Germany
    • Common Name:link
    • Decision type: Other
    • Decision date: 15/11/2006
    • Court: BGH (Supreme court)
    • Subject:
    • Plaintiff:
    • Defendant:
    • Keywords:
  • Directive Articles
    Consumer Sales and Guarantees Directive, Article 7, 1.
  • Headnote
    A standard term shortening the standard limitation period for buyer’s claims based on the non-conformity of purchased goods is void in its entirety under § 309 no. 7 lit. a and b if the claims for damages mentioned in these provisions are not exempted from the shortening of the limitation period.
    Animals being the subject matter of a contract of sale do not generally qualify as “used”. An animal which is still young upon the conclusion of the contract (here: a 6-months-old colt) and up to this point has not been used (here: neither used for riding nor for breeding) is not “used”.
    Goods or animals which - under application of objective standards - still qualify as new cannot be sold as having the agreed quality “used” from entrepreneur to consumer in order to enable the limitation period for consumer claims due to the non-conformity of the sold goods to be shortened.
    To determine whether the buyer’s rescission of the contract is invalid under § 218(1)(1) and (2) BGB it is decisive whether the rescission has been declared before an existing or hypothetical claim for the removal of the defect has become time-barred. The date at which the claims arising from the rescission have been asserted in court are of no relevance (confirmation of the senate’s judgement of 7 June 2006 – VIII ZR 209/05).
    The buyer’s claims arising from the rescission of the contract are not subject to the short limitation period of § 438(1) BGB but to the standard limitation period provided in §§ 195, 199 BGB.
  • Facts
    On 27 October 2002 the plaintiff bought the 6-months-old colt “H.” at an auction organised by the seller. The colt had been clinically checked; the inspection protocol inter alia stated: “Heart: NAD” (no abnormality detected). The seller’s terms on conditions for auctions applying to the agreement with the buyer inter alia state:
    “These terms and conditions become part of the contract between the T. GmbH [defendant] and the buyer when the winning bid is announced.

    1. The auction is a public auction. The horses are sold as used in the terms of the law. The provisions on consumer sales (§§ 474 et seqq. BGB) do not apply. […]

    5. The offered horses are sold as seen and at the moment of the sale have the following qualities (standards of sale), which at the same time define the scope of the buyer’s claim for specific performance. […] The horses offered for sale have been clinically examined by an independently liable veterinary on the instruction of the seller. This inspection has been documented with a veterinary inspection protocol. Apart from that, 10 radiographies have been made of each stallion, riding horse and 3-year-old mare. […] An expert commission mandated by the T. GmbH has assessed the radiographies on its own liability and has written a corresponding protocol for each horse. This protocol, the radiographies and the protocol of the medical examination are accessible to all potential buyers. The radiographies, their assessment by the expert commission and the protocol of the medical examination represent the horses quality upon delivery. […]

    6.
    a) The liability of the T GmbH is limited to complying with the agreed quality of the horse as described in no. 5. Claims for the removal of defects or the abatement of the purchase price are excluded. […]
    d) Apart from the above, the horses are sold as seen free of any liability/warranty. The T GmbH does not issue any warranty for certain qualities or fitness for a certain purpose. […]
    f) Claims arising from defects (non-conformity with the agreed quality described in no. 5) are to be asserted in writing within a preclusion period of 6 weeks, beginning with the day of the auction.
    g) The buyer’s rights arising from a defect become time-barred after 12 months after the passing of the risk.

    10. With the announcement of the winning bid the risk passes to the buyer, even if the horse remains in the custody of the T. GmbH or of the principal. The horses are delivered with headstall and reins, the riding horses are additionally provided with a new horse blanket. They have to be accepted without delay at the end of the auction, at the latest until 8 p.m. on the day of the auction.”

    By letter dating from 13 October 2004, which the defendant received on the same day, the plaintiff declared the rescission of the contract of sale due to an alleged congenital cardiac defect of the colt, which had been discovered during a medical examination. The defendant rejected the unwinding of the contract.
    By claim form, which was issued by the court on 15 November 2004 and was served on the defendant on 25 November 2004, the plaintiff demanded repayment of the purchase price (EUR 5.671) together with compensation for rearing the colt until November 2004 (EUR 2.400) and EUR 80 for medical expenses (ultrasonic testing) together with interest due to pending litigation versus the return of the horse “H.”. The Regional court has dismissed the claim, the Higher Regional Court has rejected the plaintiff’s appeal. By lodging an appeal on a point of law, the plaintiff continues pushing his claim.
  • Legal issue
    The plaintiff’s appeal on a point of law was successful. The rescission of the contract based on an irreparable defect is not invalid under § 218(1)(1), (2) BGB because a hypothetical claim for the removal of the defect would not be time-barred.
    The contract of sale concluded on 27 October 2002 by the falling of the hammer in the terms of § 156 BGB is subject to the limitation period of 2 years provided in § 438(1) no. 3, (2) BGB beginning on the day of delivery, thus at the earliest on the day of the auction. The decisive date to determine whether the rescission is valid or not is the day on which the rescission was declared, and not the day claims arising from the rescission under §§ 346 et seqq. BGB are asserted in court. The declaration of rescission dating from 13 October 2004 has been received by the defendant on the same day. Thus, the rescission was declared before the expiration of the limitation period.
    The contract term no. 6 g), which deviates from the legal regulations and states that all of the buyer’s rights arising from a defect become time-barred after 12 months after the passing of the risk, is a prohibited clause in the terms of § 309 no. 7 lit. a and b and thus is invalid in its entirety. In standard business terms, liability can only be excluded for slight negligence, for damage from injury to life, body or health it cannot be excluded at all. This also applies to a shortening of the limitation periods for claims for damages, thus also to an exclusion of all buyer’s rights arising from a defect.
    The shortening of the limitation periods for buyer’s claims arising from a defect (§ 438 BGB) is also barred by § 475(2) BGB, according to which in case of a consumer sale the limitation period for the claims of the buyer listed in § 437 BGB shall not be shortened to less than two years if new goods had been sold. The exception of § 474(1)(2) BGB according to which the rules on consumer sales do not apply if second-hand / used goods are sold at a public auction which the consumer may attend in person, is not applicable, since the sold colt is not a “used” (second-hand) good.
    The Federal Court of Justice rejects to generally regard animals as “used” goods in the terms of § 474(1)(2) BGB, since a categorisation in the criteria “new” and “used” is not only matter-of-factly inappropriate if viewed against the background of the multitude of existing species and forms of use, but also hardly manageable from a practical view. Irrespective of the fact that animals may carry a hardly controllable inherent risk of being defective from the point of their birth, § 90a s. 3 BGB provides that they are governed by the provisions that apply to things, with the necessary modifications, except insofar as otherwise provided. The latter is not the case here, since there no special provisions on animals in the §§ 474 et seqq. BGB. In the traveaux préparatoires justifying the abolition of the now obsolete special provisions on the sale of livestock (§§ 481-491 BGB [old version]) the legislator has explicitly assumed that no special provisions on the seller’s liability for defects and the limitation regarding the sale of livestock were required, because the newly introduced general law of sale also appropriately governed the sale of livestock. Based on the literal sense of the word, a thing is used, if it has already been used. At the time of the auction, the only 6-months-old colt had neither been used a riding horse nor for breeding before.
    In addition, the colt is not to be treated as “used” because it has been sold as “used in the legal sense of the word” under no. 1 of the general terms of the auction. Whether a thing or an animal is new or used is to be determined under application of objective standards, and – as can be deduced from the reasons of consumer protection § 475(2) BGB is based on – is not subject to the agreement of the parties. A thing or an animal which is objectively “new” cannot be sold with the agreed quality “used” to enable a shortening of the limitation period applying to consumers’ claims arising from defects of the sold goods.
    Neither is the plaintiff’s claim for the restitution of the purchase price arising from the rescission (§ 346(1) BGB) time-barred. This claim is subject to the standard limitation period provided in §§ 195, 199 BGB, since the obligation to refund the purchase price belongs to the mutual obligations to unwind the contract arising from the declared rescission of the contract (§§ 346-348 BGB). The claim is thus not subject to the shorter limitation period governing the claim for the removal of defects provided in § 438 BGB.
    The plaintiff’s rescission is not barred by no. 6 f) of the defendant’s general terms, according to which claims arising from defects are to be asserted in writing within a preclusion period of 6 weeks, beginning with the day of the auction. For the reasons mentioned above, this clause constitutes an infringement of § 309 no. 7 and § 475(2) BGB, since it unlawfully shortens the limitation period applying to the buyer’s claims arising from a defect. Apart from that, it also constitutes an infringement of § 309 no. 8 lit. b) ee) BGB, because it also covers the obligation to give notice of non-obvious defects in the terms of this provision.
    The plaintiff’s claim for compensation for the expenses of rearing the colt until November 2004 amounting to EUR 2.400 and the medical expenses for the veterinary amounting to EUR 80 is based on § 347(2)(1) BGB, according to which the party returning the purchased good must be reimbursed for its necessary outlays. An obligation to pay compensation exists even for the usual maintenance costs. In case of animals, this means the expenses for animal food and veterinary examinations and treatment. The claim is not time-barred, since it arises at the moment the purchased good is returned and – as a claim arising from the rescission – just as the claim for the restitution of the purchase price is subject to the standard limitation period under §§ 195, 199 BGB.
  • Decision

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