Case law

  • Case Details
    • National ID: Court decision number 769/2014
    • Member State: Greece
    • Common Name:link
    • Decision type: Court decision in appeal
    • Decision date: 03/11/2014
    • Court: Court of appeal of Piraeus
    • Subject:
    • Plaintiff: Unknown
    • Defendant: Unknown
    • Keywords: conformity with the contract, passing of risk, price, repair, seller
  • Directive Articles
    Consumer Sales and Guarantees Directive, Article 2, 1. Consumer Sales and Guarantees Directive, Article 3, 2. Consumer Sales and Guarantees Directive, Article 5, 1.
  • Headnote
    (1) The exact amount of price reduction is calculated by assessing the actual value of the defective good sold with the value of the good without that defect; the volume of the reduction is the result deriving from the ratio between these two estimates.

    (2) Τhe buyer may exercise his rights deriving from an actual defect or from the lack of any of the agreed properties within five years for the purchase of an immovable property and within two years for mobile things (goods). The deadline is effective as from the day of the delivery of the thing to the buyer (even if the buyer found the defect or realized that a property was missing at a later stage). This deadline is prolonged to 20 years if the seller had fraudulently concealed or withheld the defect or the missing property.
  • Facts
    The plaintiff filed a claim before the court of First Instance of Piraeus requesting a) the amount corresponding to the reduction of value of the yacht bought from the defendant due to several actual defects, b) the amount corresponding to the cost of repair of the electric generator and c) the amount corresponding the reduction of value of the electric generator. The court dismissed the case and the plaintiff appealed.
  • Legal issue
    The court ruled the following: the use of different bases of support of the yacht machine did not constitute an actual defect, since there was no damage to the yacht. In addition, the existence of one fuel tank instead of two and the non-coating with teak wood does not constitute an actual defect either, as it was not proved that there was an agreement that the yacht would bear those properties. Also, the fact that the yacht did not achieve a specific speed did not constitute lack of an agreed property too; at the time of delivery of the yacht, the speed was tested and was considered satisfactory without any objection from the buyer's engineer. In any case the speed is reduced due to the installation of a sonar in the yacht by the buyer that reduces the speed by two knots.

    The lack of ventilation window in the bathroom, although it constitutes an actual defect, still the court considered that this defect was obvious and that the buyer could have easily detect it. So, in this context it was held that only the damages to the yacht’s engines (that have been repaired) constitute an actual defect since it renders the yacht not bestselling.
    In order to calculate the price reduction, the court should take into account the actual value of the good with and without the defect at the time of conclusion of the contract. If, however, it is dubious whether the price has been agreed at a later stage (and not at the time of the conclusion of the contract) then the actual value of the good at that later stage should be taken into account.

    The exact amount of the reduction of the price is determined by the so-called method of "relevant calculation", i.e. the purchase value of the defective thing and that of the same thing without the defect are defined at the time of the sale; the ratio between these two values will result to the exact amount of decrease of the agreed price. This method uses the formula X = Σ x Ε / A, where (X) is the reduced price, (Σ) is the initially agreed price, (E) is the value of the defective good and (Α) the value of the same good without defect.

    In addition, the deadline to exercise the buyer’s rights from the sales contract can be extended to 20 years if the seller has fraudulently concealed or withheld the faults. Fraudulent concealment occurs when the seller knows or reasonably suspects the existence of actual defects that reduce the value or the ordinary utility of the good at the time that he passes the risk to the buyer. However, the buyer bears the burden of proof that the seller fraudulently concealed or withheld the defect or lack of an agreed property, when the good was handed over to him.
  • Decision

    (1) How is the reduction of the price determined?

    (2) What is the deadline to exercise the rights provided by the law to the buyer in case of defect or lack of property of a good?

    Full text: Full text

  • Related Cases

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  • Legal Literature

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  • Result
    The court rejected the plaintiff’s claim for the reduction of the value of the yacht as the deadline for the plaintiff to exercise its rights for the actual defects that caused the reduction of the value had expired. In addition, the court rejected the plaintiff’s claim for the cost of the repair of the electric generator, because the plaintiff presented the relevant invoices before the court of Appeal for the first time. However, the court overturned the decision at first instance (decision no. 3663/2012 of the court of First Instance of Piraeus), which had rejected the plaintiff’s claim for the reduction of the value of the electric generator as unfoundable, and further ruled that the plaintiff was entitled to the relevant fund.

    The court accepted partially both the plaintiff’s appeal and claim.