THE AUSTRIAN CONSUMER WARRANTY ACT

Overview

On 7 July 2021, the Austrian National Council passed the new Austrian Warranty Directive Implementation Act (“Gewährleistungsrichtlinien- Umsetzungsgesetz”), which, in addition to amendments to the warranty provisions in the Austrian Civil Code (“Allgemeine bürgerliche Gesetzbuch”; “ABGB”) and the Austrian Consumer Protection Act, primarily introduces a new Austrian Consumer Warranty Act (“Verbrauchergewährleistungsgesetz “; "VGG"). The new VGG will enter into force on 1 January 2022. This article first deals with the scope of application of the VGG and then summarizes the most important amendments the Act foresees.

Scope of Application

The VGG is generally only applicable to contracts between entrepreneurs and consumers for (i) the purchase of movable objects (goods) and for (ii) the provision of digital services. Also covered by the VGG are contracts for the sale of goods that are yet to be manufactured, hence also contracts for work and services similar to sales contracts. In addition, contracts for the provision of digital services are also covered by the VGG if the consideration does not consist of a payment but of the transfer of personal data. One cannot agree to deviating provisions than to those of the VGG if the deviating provisions are to the detriment of consumers.

The most important innovations of the VGG

Definition of deficiency

Forthcoming, in addition to the contractually agreed characteristics, the entrepreneur is also responsible under warranty law for ensuring that the goods or the digital service have the objectively required characteristics. These objectively required characteristics are – in contrary to the usually required characteristics in the ABGB – listed in the VGG: the goods or the digital service must (i) be suitable for the purposes for which such goods or digital services are usually used, (ii) correspond to a sample or a specimen or a test version or "preview", (iii) be equipped with the accessories that the consumer can "reasonably expect," and (iv) have the quantity, quality, durability, functionality, compatibility, accessibility, continuity, security, and other characteristics that are customary for such goods or digital services. Any deviation from this provision requires the express and separate consent of the consumer.

Updating obligation of the entrepreneur

Another new provision in the VGG is the obligation of the entrepreneur to update goods with digital elements (eg navigation devices or smartphones) and digital services, which as an exception also applies to contracts concluded between entrepreneurs. The entrepreneur must provide those updates that are necessary to ensure that the goods or digital services continue to comply with the contract. Due to the obligation to provide updates, the entrepreneur may now be subject to a warranty obligation by reason of a failure to provide updates, even if the quality of the service object was in conformity with the contract or free of defects at the time of transfer. The contractor must therefore provide the necessary updates (during certain periods).

Extension of the presumption period of defectiveness

As provided in the ABGB, the VGG also recognizes the presumption of defectiveness upon handover of the object of performance if the defect becomes apparent within a certain period of time after handover. However, in contrast to the regulations in the ABGB, the presumption period under the VGG is one year from handover and thus twice the period of six months applicable under general warranty law.

Distinction between warranty period and limitation period

A practice-relevant new regulation relates to the time limit regime of the VGG, which for the first time distinguishes between warranty periods and limitation periods. The former refers to the period within which the defect must have occurred in order to trigger warranty claims by the transferee against the transferor. The limitation period, on the other hand, is the period of time available to the transferee to assert his warranty claims in court. The warranty period is two years and begins with the transfer of the goods or with the provision of the digital service. What is new  is that after the warranty period has expired, an additional limitation period of three months is provided for, within which the defect must be asserted (in court if necessary).

Conclusion

As a result, the VGG improves the rights of consumers, in particular due to the extension of the warranty to digital services and the extension of the presumption period of the defectiveness of the performance object to twelve months. For entrepreneurs - due to the difference in the scope of application of the ABGB and VGG - it is now recommended to make a distinction with regard to consumer status and the type of contract.