Liability for material defects
According to the Croatian Obligations Act, a defect exists if the purchased item does not conform to the agreed description, type, quantity or quality, lacks the expected functionality, compatibility or other features, or is not suitable for the particular purpose the buyer informed the seller about.
A defect is also deemed to exist if the item was not delivered with the agreed accessories, instructions or updates. Likewise, a defect exists if the item is not fit for ordinary use, does not match a sample or model shown by the seller, or lacks qualities the buyer could reasonably expect.
The seller is not liable for public statements about the product (for example in advertisements) if they prove they were unaware of them, that such statements had been corrected, or that they did not influence the buyer’s decision. In consumer contracts, no defect is deemed to exist if the consumer was specifically informed of the deviation and expressly accepted it.
When is the seller not liable for defects?
Under the Obligations Act, the seller is not liable for defects that were known to the buyer at the time of the contract, or could not have remained unknown to them. It is assumed that defects could not have remained unknown if a careful person, with average knowledge and experience in the same trade or profession as the buyer, could have easily detected them during an ordinary inspection.
However, this does not apply to consumer contracts, where broader protection is granted to consumers. Additionally, even in cases of obvious defects, the seller will still be liable if they declared that the item had no defects or possessed certain qualities which it did not actually have.
Hidden defects
If, after taking delivery, the buyer discovers a defect that could not have been detected during an ordinary inspection, they must notify the seller within two months from the day the defect was discovered. In commercial contracts, the buyer must do so without delay.
The seller is not liable for defects that appear after two years from delivery of the item, while in commercial contracts this period is shorter—six months.
In the sale of used goods, the parties may agree on a one-year period, or even shorter in commercial contracts. These periods may also be extended by contract, providing additional protection for the buyer.
Limiting or excluding liability for material defects
According to the Obligations Act, the parties may agree to limit or even entirely exclude the seller’s liability for material defects. However, such limitation or exclusion is not valid if the seller knew of the defect and failed to inform the buyer, or if it was agreed using the seller’s monopolistic position.
In consumer contracts, special protection applies in favor of the consumer: any clause that in advance limits or excludes liability for defects is not binding until the consumer notifies the seller of the material defect.
It is important to note that even if the buyer waived the right to terminate the contract due to a defect, they still retain other rights arising from the existence of that defect.
Buyer’s rights in case of material defects
If the buyer timely and properly notifies the seller of the defect, they have the right to:
a) demand that the defect be remedied (repair or replacement),
b) demand delivery of another item without defects,
c) request a proportionate reduction of the price, or
d) terminate the contract.
Additionally, the buyer has the right to claim damages, including compensation for damage caused to their other property as a result of the defect.
