Legal Decision on Disclosure Obligations for Material Defects Legal Decision on Disclosure Obligations for Material Defects
In the decision dated August 27, 2024 (Reference number: X ZR 71/22), the Federal Court of Justice (BGH) extensively addressed the disclosure obligations of sellers regarding material defects. This decision has far-reaching implications for the legal situation in sales law and highlights the responsibility that sellers have towards their buyers.
The case before the BGH demonstrated that a seller, in a specific context, did not sufficiently inform about known defects in a product. The BGH stated in its decision that sellers are obligated to inform buyers about any defects that they are aware of or that they should have been aware of with normal diligence. This obligation to disclose is crucial to ensure the trust of buyers in the market.
The reasoning of the judgment elaborated that a seller who knows of such defects cannot simply assume that the buyer will discover them themselves. Rather, it is the seller's duty to actively point out existing defects. The court explained that the violation of this disclosure obligation can have serious consequences for the seller, as buyers who are not informed about defects have the right to request rectification or damages.
Another central point of the decision was the distinction between fraudulent misrepresentation and mere failure to disclose.
The BGH recognized that a seller who is not transparent and inadequately informs buyers may fall into the realm of deceit. As a result, the rights of buyers under the contract can also change significantly.
The decision is not only of legal relevance but also raises questions about ethical standards in trade. Given the established duties of disclosure, expectations of sellers may increase concerning transparency and honesty in business transactions. Lawyers and merchants are urged by this decision to reconsider their sales strategies to prevent legal disputes.
In summary, the BGH has clearly defined the standards for the disclosure obligations of sellers with its decision of August 27, 2024. This decision could set a precedent for future cases in case law where material defects and associated information obligations are significant.
Author: Anita Faake, Thursday, September 12, 24