An interesting dispute with a practical conclusion was recently handled by the Supreme Court under File No. 23 Cdo 2938/2020. The plaintiff in the given dispute purchased a packaging line, but she discovered hidden defects in it relatively soon after its purchase, complaining in particular that it had a lower performance than that declared by the defendant at the time of sale. Complaints were made repeatedly, but the defect persisted, so the plaintiff withdrew from the contract after less than three years. In seeking reimbursement and damages, she admitted that she continued to use the packaging line after the discovery of the defect, in order to at least partially reduce the economic impact of its lower performance.

The plaintiff referred to Section 2110(d) of Act No. 89/2012 Coll, Civil Code, which provides an exception to the rule that the buyer may not withdraw from the contract or demand delivery of a new item, if he cannot return the item in the condition, in which he received it, namely in the case “if the buyer sold the item before the defect was discovered, if he consumed it or if he altered the item during normal use; if this has been done only in part, the buyer shall return to the seller what he can still return and shall compensate the seller to the extent that he has benefited from the use of the thing”.  The Supreme Court interpreted the provision in question, going all the way back to the primary source of inspiration for the legislation in question, which was the United Nations Convention on Contracts for the International Sale of Goods. It found that the exception reflected in the quoted provision, despite the unclear wording, applies to normal use only until the discovery of a latent defect. The Supreme Court stated, inter alia, that the purpose of the quoted provision is to protect both the buyer, who cannot discover the hidden defect in advance, and to protect the seller, who can no longer sell the altered item as new.

On the grounds that the plaintiff continued to use the packaging line after the discovery of the latent defect, the court did not uphold her claim and held that her right to withdraw from the contract had expired.

Author: Veronika Odrobinová, Olga Králíčková