In the December legal circular, we will examine more closely an interesting judgment of the Supreme Court of the Czech Republic, file no. 33 Cdo 4362/2017, of 20 September 2018, which concerns the seller’s entitlement to set conditions for extended warranty in the case of a contract concluded with a consumer (hereinafter the “judgment”). It must be stated in advance that this dispute was resolved under the regime of the previous Civil Code, which was effective until 31 December 2013. In our view, however, this judgment is also applicable to relationships arising under the current Civil Code (effective from 1 January 2014), despite the problematic regulation and terminology concerning warranty liability, which we examined in detail in the legal circular of June 2014.

The judgment was preceded by a dispute between the claimant, as buyer, and the defendant, as seller. The claimant asserted a defect in a lawnmower with the defendant consisting of a “loose drum”, however, he asserted the defect at a time when the statutory warranty period of 24 months at that time had already expired. However, the defendant provided an extended warranty (right to assert defects) for a period of seven years upon the purchase of the lawnmower. Although the claimant managed to assert the defects during the extended warranty period, the defendant rejected the assertion of defects, as the claimant had not fulfilled the agreed conditions for the provision of such warranty (a number of fundamental defects on the lawnmower which prevented its use had not been removed by the defendant’s authorised repair service in the past).

The judgment in question then addresses in particular the questions of (i) whether the claim to extended warranty beyond the period determined by law is available to the buyer even in a case where he did not respect the seller’s conditions which were set out in the warranty certificate, and (ii) whether the seller, in determining the content and scope of the warranty, deviated from the statutory regulation to the detriment of the consumer as the weaker contracting party. The Supreme Court of the Czech Republic expressed itself relatively unequivocally in this regard. If the buyer did not respect the conditions for extended warranty set out in the warranty certificate beyond the period determined by law, he is not entitled to such warranty. As long as the statutory warranty applies, the seller must not deviate from the statutory regulation, but if it concerns contractual warranty (provided beyond the scope of the law), the conditions depend on the seller. It is naturally necessary for these conditions to be set out entirely clearly and comprehensibly. If this were not the case, it would be necessary to apply the interpretative rule according to which, in cases of doubt as to the content of consumer contracts, the interpretation more favourable to the consumer applies. However, according to the court’s view, this was not such a case. The Supreme Court recalled that this rule cannot be used so that contractual arrangements are interpreted purposively in contradiction to the entirely clearly expressed will of the parties, or so that the interpretation results entirely in their modification in favour of the consumer.

The Supreme Court did not agree with the buyer in the case of the second question either and concluded that “the provision of a warranty exceeding the scope and content of the statutory warranty is fundamentally always in favour of the buyer – consumer, whether it concerns extension of the warranty period or expansion of the scope of the buyer’s rights, etc.” According to the court, therefore, the seller did not deviate from the statutory regulation to the detriment of the buyer.

For completeness, we note that the judgment does not expressly mention whether the extended warranty was provided without further consideration (free of charge) or whether the consumer (buyer) had to pay a certain amount for it. In our view, the application of the judgment (in relation to the second question examined above, whether the content and scope of the extended warranty is to the detriment of the consumer) to cases where the consumer pays the seller special remuneration for the extended warranty could be at least contentious.

It follows from the above that in cases where the seller provides the buyer with a warranty free of charge beyond the scope of his obligations arising from the law, it is possible for him to set out conditions in advance for the provision of such warranty (which should, however, be specified transparently).

Alzbeta Hudakova

Law Office Mašek, Kočí, Aujezdský www.e-Advokacie.cz – on-line legal counselling

This text was originally prepared by the law office Mašek, Kočí, Aujezdský in cooperation with the Association for Electronic Commerce (APEK) as legal circular no. 12/2018 intended for members of this association.

This text was translated from Czech to English using an AI translator.