Materiality of the defect as a condition for withdrawal from the contract

As provided for in Article 560 of the Civil Code, one of the options available to a buyer who has purchased a defective item under the provisions on the warranty of quality is to withdraw from the contract. This right is subject to the provisions of Article 560(4) of the Civil Code, which states that:

The buyer may not withdraw from the contract if the defect is minor.

How, then, should one assess whether a defect is significant or insignificant, and consequently whether withdrawal from the contract is permissible in a given case?

Withdrawal from the contract under the warranty

The interpretation of the provision in question is not entirely straightforward and presents legal scholars and the courts with a number of problems, the resolution of which often boils down to a case-by-case approach.

In light of the wording of the provision in question, it is worth noting first and foremost that the right to withdraw from the contract is not absolute, i.e. its effectiveness does not depend on the arbitrary decision of the entitled party, but on an objective criterion, namely whether the defect is material or immaterial. For if the defect is insignificant, the buyer cannot withdraw from the contract, which will render the declaration of withdrawal ineffective.

Withdrawal from the contract under the warranty, structured in this way, is intended, on the one hand, to protect the buyer’s interests and, on the other hand – insofar as the criterion of the defect’s significance is concerned – the seller’s interests. For this reason, when assessing the materiality of a defect, the interests and reasonable expectations of both the buyer and the seller must be taken into account, and not – as is often claimed – solely or primarily the buyer’s point of view (see, for example, J. Jezioro (in:) Civil Code. Commentary, ed. E. Gniewek, P. Machnikowski, 2016, commentary on Article 560, nb 18.

Material defect and immaterial defect

Consequently, it can be concluded that a defect is primarily material if it would lead an average purchaser of the item to withdraw from the contract. In this regard, it is crucial to assess whether the defect’s impact on the item’s functional or aesthetic qualities, or on safety-related properties, could – for that reason alone – prompt an average consumer to withdraw from the contract (determining the defect’s impact on the item’s functional qualities or safety may require specialist knowledge; cf. E. Habryń-Chojnacka (in:) Civil Code. Commentary, vol. II, ed. M. Gutowski, 2016, commentary on Art. 560, nb 25).

For the seller, however, the consequences of withdrawal from the contract are significant, particularly the associated inconveniences, costs and risks. If the seller can easily resell the defective item (it is practically as good as new) and does not incur significant costs, the significance should be assessed more leniently than if withdrawal from the contract is likely to result in a permanent loss for the seller (R. Trzaskowski [in:] Civil Code. Commentary. Vol. IV. Obligations. Detailed Part, 2nd ed., ed. J. Gudowski, Warsaw 2017, Art. 560, Art. 561).

It seems that a factor such as the seller’s subjective liability for the sale of a defective item may also be of some significance (the greater the degree of fault on the seller’s part, the lower the requirements that should be set for the criterion of materiality). This factor, which appears to be extraneous, is in fact not so, as it influences the level of the seller’s legitimate expectations (R. Trzaskowski [in:] Civil Code. Commentary. Vol. IV. Obligations. Detailed Part, 2nd ed., ed. J. Gudowski, Warsaw 2017, Art. 560, Art. 561).

Case law holds, amongst other things, that *the assessment of the materiality of a defect within the meaning of the provisions on the warranty of quality in sales must be made from the buyer’s perspective, not in terms of the item’s suitability for ordinary use, and that the buyer’s expectations regarding the item’s functioning are of fundamental importance (*Judgment of the Court of Appeal in Lublin of 26 November 2019, I ACa 730/18, LEX No. 2817669). It should be added in relation to this point, and in line with the reasoning of the aforementioned judgment, that the buyer’s expectations must be sufficiently specified and communicated to the other party.

Case law further indicates that the fact that a defect is removable does not preclude the conclusion that it is also a material defect. There are no grounds whatsoever for treating the two concepts as synonymous. The terms ‘material defect’ and ‘irreparable defect’ are not identical, but the scope of these concepts overlaps. (Judgment of the Court of Appeal in Łódź of 22 March 2016, I ACa 1154/15, LEX No. 2024137).

If you require legal advice on the subject described in this article or any other matter, we recommend that you engage the services of HWW Hewelt Wojnowski Lindner i Wspólnicy.