Warranty new – what will change for consumers from 2022?

Technological progress and increasing digitalization have prompted the European legislator to issue two new directives in the area of warranty law (Digital Content Directive and Sale of Goods Directive), which require national implementation. An overview:

A new law, but a proven system

The two directives are to be implemented in Austria by the Warranty Directive Implementation Act (GRUG) (the government bill was adopted in third reading in the plenary session of the National Council on 07/07/2021, more details here), which basically provides for two main pillars:

• the introduction of an entirely new act: The Consumer Warranty Act (VGG), as well as
• a few adaptations of the General Civil Code (ABGB) and of the Consumer Protection Act (KSchG).

The new VGG and the other legal adjustments are to apply – as stipulated by the EU – to contracts concluded from 01.01.2022 onwards.

It can be anticipated that the basic concept of warranty law has not changed; only the term of the secondary warranty remedy “rescission” was renamed “contract termination”. After a contract has been dissolved, the consumer must return the goods to the entrepreneur at his or her expense. What is new is that the entrepreneur is now entitled to refuse repayment of the purchase price until he or she has either received the goods back or the consumer has provided him or her with proof of the return of the goods.

Scope of the new VGG

The VGG is at the core of the new Austrian warranty law and applies exclusively to the B2C sector, i.e. between entrepreneurs and consumers. It includes both

• contracts for the purchase of goods (movable tangible objects), including those that have yet to be produced (contract for work and materials), as well as
• contracts for the provision of digital services (= digital content and services).

The warranty provisions of the VGG also cover permanent transfers of software (e.g. of an antivirus program, computer game).

For other contracts (e.g. contracts for real estate, barter agreements, contracts for work and materials) the warranty provisions of the ABGB continue to apply.

In the future, it will therefore always be necessary to determine whether the warranty regime of the VGG or of the ABGB applies to a specific contractual relationship.

Various warranty regimes

The following is a brief overview of selected provisions that are designed differently in the two warranty regimes (ABGB/VGG):

• Contracts in which consumers provide data (instead of payment) in return will be included in consumer warranty law (specifically, in the scope of the VGG) in the future. Consumers will therefore (also) be entitled to contractual remedies in the future if they have “paid” with their data.
• One of the most significant changes is also the extension of the so-called presumption period within the scope of application of the VGG. According to the previous § 924 ABGB, if a defect occurred within six months of handover, it was presumed that the defect already existed at the time of handover (it is not the recipient who has to prove that the defect already existed at the time of handover, but the seller who has to prove that it did not). In the scope of application of the VGG, this period, within which the burden of proof is shifted in favor of the consumer, is extended to one year. In the scope of application of the ABGB, however, the presumption period of six months continues to apply.
• For digital services and goods with digital elements (e.g. smartphone, smartwatch), an update obligation of the entrepreneur is introduced (this also applies to the B2B area, i.e. between two entrepreneurs). This means that the entrepreneur is liable for ensuring that the necessary updates are made available to the transferee so that the goods or digital services continue to comply with the contract. The entrepreneur therefore has to provide the respective updates (during certain periods).
• (More) objective definition of defect: In the future, an entrepreneur will be liable for ensuring that his or her goods/digital services also have the objectively necessary properties (the properties that are usually expected or can be expected on the basis of a sample) in addition to the contractually agreed properties. An agreement on deviation from the objectively required properties requires the express, separate consent of the consumer.
• In the future, there will be no formal requirements for the assertion of price reductions or the dissolution of contract. These warranty remedies can now be asserted by the consumer by means of a form-free (extrajudicial) declaration. The requirement to assert these remedies in court therefore no longer applies.
• Combination of warranty and limitation periods: The general warranty periods, i.e. the periods within which the defect must occur (movable objects/digital services: two years, immovable objects: three years) remain unchanged; what is new, however, is that an additional limitation period of three months is provided after the expiry of the warranty period, within which the defect has to be asserted in court if necessary.

Our experts Julia Goth and Julia Wagner will be happy to answer any further questions you may have on this topic.

Disclaimer

This article is for general information only and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and correctness of this article.

 

7. July 2021

 

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