On 1st January 2013, the new Articles 210 and 371 CO modifying the statute of limitation applicable to warranty claims for purchase and work contracts entered into force. The revision brings three substantial modifications.
1. Extension of the time limitation period for purchase and work contracts
Any claim for breach of warranty of quality and fitness becomes time-barred two years after delivery of the object to the buyer (Article 210 paragraph 1 CO), instead of one year. The revision aligns the Swiss rules to the notice and time-limitation periods for warranty claims provided for in the United Nations Convention on contracts for the international sale of goods (CISG) as well as in the Directive 1999/44/CE of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees (OJEC 1999 L 171). The purchaser of a movable good delivered after 1st January 2013 has a two-year deadline from delivery to notify the defects to the seller, even though the defects were discovered after the delivery or the contract was concluded after 1st January 2013. After this two-year deadline, the claims based on warranty for the defects of the object of the purchase are time barred and therefore declared inadmissible. For reasons of coherence and coordination, the time limitations for work contract on movable goods are equally extended to two years from acceptance of the work (Article 371 paragraph 1 CO). The period of limitation remains of a dispositive nature, and the parties have the possibility to agree to shorter or longer durations, except for contracts concluded with consumers (see point 2 below).
Notice and time-limitation periods in respect of defects in a building remains unchanged to five years after ownership is acquired (Article 219 paragraph 3 CO) or from the reception of the immovable property (Article 371 paragraph 2 CO). The new Articles 210 paragraph 2 CO and 371 paragraph 1 CO introduce a five-year period in relation to defects of an object that has been incorporated in an immovable work, this to make possible recourse claims of contractors against their sub-contractors or other providers.
2. No possibility to reduce the time limitations for consumer contracts
The two-year period applicable to purchase and work contracts becomes semi-mandatory with regard to contracts concluded with consumers. Such time-limitation cannot be reduced by contract if the purchased object is intended for personnel or family use and the seller is a professional (new Article 210 paragraph 4 CO). Any clause reducing the two-year time limitation period is null and void. It goes without saying that the parties can agree on a longer time limitation period. The provision applies by analogy to work contracts concluded with consumers.
3. Deception of the purchaser
Another significant amendment relates to the purchasers’ protection when the purchasers have been intentionally misled by the seller. The seller cannot rely on time limitations if the purchaser demonstrates that the seller misled it intentionally when concluding the contract, this independently of the contractual or legal nature of the limitation period (Article 210 paragraph 6 CO). In this connection, under Article 199 CO, which remains unchanged by the revision, any agreement to exclude or limit warranty obligations are void if the seller has fraudulently concealed the failure to comply with warranty from the purchaser. Both provisions apply by analogy to warranty for defects in relation to work contracts. In both cases, if the seller intentionally misleads the purchaser or fraudulently conceals a defect, the purchaser’s claims are time-barred after 10 years.
The revision of the warranty rules for defects in relation to purchase and work contracts strengthens consumer rights allowing them to benefit form a warranty regime for a period of two years. It also improved the position of contractors against their providers of goods or services. Last, implications for businesses go beyond consumer and contractors’ protection since statutory time-limitation period in relation to defects of the purchased object or of the contracted work are extended for any type of purchase and work contract; the two-year limitation period may however be modified contractually. Businesses should take this important revision into account when drafting warranty clauses and reviewing general conditions, particularly warranty clauses in relation to consumer contracts.