A safety defect does not always justify withdrawal from the contract

Facts

GF acquired from KFZ Kolak e.U., for a price of 33 500 euros, an eight-year-old car. Subsequently, the Austrian automobile club (ÖAMTC) carried out a test of the vehicle which showed a leak of engine oil due to engine leakage. This was a failure that was convinced ÖAMTC consider a serious defect in operational and road safety that existed before the vehicle was transferred GF and could be removed at a tiny cost. KFZ Kolak reported GFHe's ready to fix the vehicle. However, GF requested before the courts the termination of the sale contract and the reimbursement of the acquisition price of the vehicle in return for its reimbursement, as well as the reimbursement of the another costs incurred by it in connection with that purchase. KFZKolak challenged this request, claiming that GF refused the proposed repair without giving reasons and that he was so not entitled to a claim for termination of the sales contract.

The Austrian ultimate Court (Reference Court) has raised doubts as to the explanation of Article 13(4)(c) of Directive (EU) 2019/771 of the European Parliament and of the Council of 20.5.2019 on certain aspects of contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC and repealing Directive 1999/44/EC (OJ L 136, p. 28).

TS Position

Article 13(1) of Directive 2019/771 lists claims which the consumer may rise against the seller in the event of non-compliance with the contract, namely bringing the goods into conformity with the contract, a proportional simplification in the price or termination of the contract.

Article 13(4)(c) of Directive 2019/771 provides that the consumer is entitled to immediate simplification in the selling price or to immediate termination of the sale agreementif non-compliance with the contract is so serious as to justify specified simplification or solution. Taking into account the customary meaning of the word ‘serious’, reinforced by the usage of the ‘high enough’ level surrounding area, the TS explained that the expression ‘not complying with the contract ... serious enough’ in that provision refers to very crucial shortcomings, which is distinguished from insignificant non-compliance.

Regarding context Article 13(4)(c) of Directive 2019/771, TS has indicated that Article 13(5) of Directive 2019/771 in recital 53 of that Directive shows that termination of the contract is limited to cases where non-compliance with the contract is not negligible and so only a material deficiency of specified conformity can give the consumer the right to terminate the contract. In addition, the TS stressed that Article 13(4) of Directive 2019/771 states that, with the exception of the circumstances referred to in Article 13(4)(c) of Directive 2019/771, the consumer has the right to either a proportional simplification in the selling price or to terminate the sales contract only if the goods could not be brought into conformity with the contract. Therefore, the TS considers that ‘non-compliance with an agreement ... sufficiently serious’ as referred to in Article 13(4)(c) of Directive 2019/771 should be distinguished from the another non-compliances referred to in that paragraph 4.

About objectives Directive 2019/771, the TS has acknowledged that in accordance with Article 1 of Directive 2019/771 it aims to contribute to the appropriate functioning of the interior market while ensuring a advanced level of consumer protection. However, as is fundamentally recital 53 of the directive, it besides serves maintain a balance between the rights and obligations of the Contracting Parties. In the assessment of the TS, specified a balance could not be achieved if any non-compliance with the contract on the safety of goods, regardless of its seriousness, had to be considered non-compliance sufficiently serious to justify an immediate simplification in the selling price or immediate termination of the contract. specified an explanation would call into question the discrimination made in Article 13 of Directive 2019/771 between situations where the consumer has the right to get the goods to a contractual condition, a proportionate simplification in the price or to terminate the contract and, consequently, the balance between consumer rights and the rights of the seller laid down by that Directive.

According to the TS, the fact that non-compliance threatens the safety of the commodity itself, it cannot be adequate to consider specified a absence to be sufficiently serious that it would justify an immediate simplification in the sale price or immediate termination of the sale contract, thus disposing the seller of any anticipation of bringing the goods into conformity with the contract. In order to measure the seriousness of the deficiency of conformity of the goods with the contract, it is essential to find whether the consumer can objectively proceed to feed the ability of the seller to reconstruct the conformity of the goods with the contract. To this end, account should be taken of the nature of the defect and the goods concerned, conditionswhere compliance with the contract can be restored and whether This defect has jeopardised consumer or 3rd organization safety.

Whereas it is for the referring court to assess, in the main proceedings, whether the failure to comply with the contract is sufficiently serious that it warrants an immediate simplification in the price or immediate termination of the sale contract, the Court may, however, decide on a mention for a preliminary ruling, give guidance to this court assisting in its evaluation ( TS judgement of 11.1.2024, Nárokuj, C-755/22, Legalis, paragraph 42). Failure to comply with the contract characterising the circumstances of the case in the main proceedings involves the leakage of motor oil from the vehicle, which may origin the leak to origin the engine to fail. However, in the assessment of the TS, where specified a defect may, where appropriate, affect the consumer's ability to usage the goods in a average manner, its seriousness should be assessed in the light of the circumstances of the peculiar case.

According to the TS, it is not apparent from the order for mention that there are reasons that do not let the consumer to proceed to keep a belief in the seller's ability to reconstruct the conformity of the goods with the contract. It is actual that the failure to comply with the contract in question already occurred at the time of the receipt of the vehicle, which could undermine consumer assurance in the seller. However, the Court stressed that the circumstances must be taken into account, firstly, that the goods are an eight-year-old second-hand vehicle, secondly, that it does not appear from the mention order that the seller can be attributed to trickery or another reprehensible behaviour and, thirdly, that the seller informed the buyer that he was willing to repair the vehicle and the cost of this restoration to conformity with the contract is considered to be ÖAMTC comparatively low. Therefore, subject to the arrangements to be made by the referring court, the TS found that the non-compliance in question does not appear to be serious adequate to justify an immediate simplification in the selling price or an immediate termination of the sales contract.

In conclusion, the TS held that Article 13(4)(c) of Directive 2019/771 should be interpreted as meaning that the deficiency of conformity with the contract on the safety of goods, which can be removed at a comparatively tiny cost, does not necessarily should be considered serious adequate to justify an immediate simplification in the selling price or an immediate termination of the sale contract.

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