The Seller Has No Rights To Compensation

19 June 2008

Consumer protection companies and organisations have anxiously awaited the ruling of the European Court of April 2008, regarding the controversy between the Bundesverband der Verbraucherzentralen und Verbraucherverbände (Federal Organisation of the Consumer Protection Centres in Germany) and the company Quelle AG. The question is: Can the seller ask the client for compensation for defective goods that they were sold, which at the time of return had been used by the client?

In August 2002, the company Quelle A.G sold a client a kitchen set for private use. At the beginning of 2004, the client realised that the equipment was faulty. Given that the item could not be repaired, the client returned the defective item to Quelle AG. The company granted them a new kitchen set. However, Quelle claimed the payment of 69,97€ from the client for the use of the goods.

The “Bundesverband der Verbraucherzentralen und Verbraucherverbände” reclaimed, on behalf of the client, the refund of the payment of 69,97€. Hence, Quelle should remove the requirement to charge for selling a replacement of faulty goods.

The German Supreme Court became involved in this matter and realised that according to that established in § 439 IV with § 346 I and II nº1 BGB (German Civil Code) the right to compensate the seller exists. Given that the judges of the Supreme Court haboured doubts regarding the compatibiltiy of the regulations of the German Civil Code and EU Law, the Supreme Court stopped the proceedings and put this matter before the European Court of Justice.

The Supreme Court of Justice has clarified and realised that the German regulations are not compatible with EU regulations.

Specifically, the German Supreme Court will have to decide concluding that the company Quelle must reimburse their client with the amount of 69,97€. In addition, the legislator is called to adapt the BGB (German Civil Code) regulations, given that currently German laws regarding the matter of compensation contradict those in EU regulations.

This declaration is not limited to Germany: Spanish legislators will also be asked to revise their Civil Code.

For further information, please contact Sönke Lund :