Introduction

The obligation to provide a warranty for hidden defects of the goods is regulated by Article 1707 of the Civil Code. According to paragraph (1):
“The seller warrants the buyer against any hidden defects which render the sold good unfit for its intended use or which so diminish its use or value that, had they been known, the buyer would not have bought it or would have paid a lower price.”

The conditions for invoking the warranty for hidden defects arise from Article 1707 of the Civil Code. Thus, pursuant to Article 1707 paragraph (2):
“A defect is hidden if, at the time of delivery, it could not have been discovered by a prudent and diligent buyer without specialist assistance.”

It should be noted that the seller is not liable for apparent defects. An apparent defect is one that could have been easily identified by a prudent and diligent buyer at the time the contract was concluded.

Another condition is that the defect must have existed at the time of delivery; therefore, according to Article 1707 paragraph (3) of the Civil Code:
“The warranty is owed if the defect or its cause existed at the time of delivery of the good.”
Under this provision, it is sufficient that the cause of the defect existed prior to delivery, even if the defect itself materialized only after delivery to the buyer; thus, the moment when the defect becomes manifest is irrelevant, as long as the underlying cause existed at the time of delivery.

The final condition is that the defect must be serious. This follows from the wording of Article 1707, which requires that the defect render the good unfit for its intended use or sufficiently diminish its use or value such that the buyer would not have purchased it, or would have paid a lower price.

Without going into excessive detail, I will provide several brief clarifications regarding the classification of defects, as well as the rights and obligations of the seller and the buyer:

1. Definition and classification of hidden defects

• Defects, as defined by the Civil Code, are flaws in the sold good which are not immediately visible but substantially affect its quality or usability. These may be classified into two categories:

• Apparent defects: those that can be detected upon reasonable inspection and are the responsibility of the buyer if overlooked.
• Hidden defects: those that cannot be discovered through ordinary examination and which constitute the subject of the Civil Code’s regulation.

2. Obligations of the seller

• The Civil Code imposes strict obligations on sellers:

• Sellers must:
• deliver goods free of hidden defects;
• disclose known defects that the buyer could not reasonably identify, as well as apparent defects.

3. Warranty period and prescription

• When a hidden defect is discovered, the buyer must notify the seller as soon as possible. According to Article 2531 of the Civil Code, the warranty period within which defects must be discovered is:

• 1 year for delivered goods or completed works (other than constructions);
• 3 years for constructions.

Both periods run from the date of delivery of the good or construction, or from the date of acceptance.

The prescription period for bringing an action for hidden defects is 3 years from the date the defects were discovered (Article 2517 Civil Code).

4. Remedies available to the buyer

• Once invoked within the legal time limits, the buyer has several remedies available depending on the gravity of the defect (Article 1710 Civil Code):

• elimination of the hidden defect by the seller or at the seller’s expense;
• replacement of the sold good;
• reduction of the price;
• termination of the contract and return of the defective good.

• In addition, the court may award damages for any further losses resulting from the hidden defect, or may order another remedy depending on the nature and seriousness of the defect. The same applies when the seller knew of the defects at the time the contract was concluded.

5. Burden of proof

• Upon the discovery of hidden defects, the burden of proof lies with the buyer. The buyer must prove that the defect existed at the time of sale and could not have been discovered by normal inspection.

For example, the lack of waterproofing beneath the concrete slab of a building has been held to constitute a hidden defect, as it is covered by screed and cannot be discovered without breaking it. Likewise, the concealment of missing airbags or missing seatbelt components in a car, rendering them unusable, has been considered a hidden defect.

6. Exclusion of liability

• A contractual clause excluding liability for hidden defects may be stipulated only if the seller did not know of the defects at the time the contract was concluded.
• The new Civil Code renders null any clause by which the seller’s liability for hidden defects is excluded or limited when the seller knew or should have known of the defects.
• Regarding defects the seller should have known, the burden of proving that the seller could have known them lies with the creditor of the warranty obligation — the buyer. However, a case-by-case assessment is required to determine which hidden defects could reasonably have been known by the seller, depending on the nature of the sold good.

Brief conclusions

The warranty for hidden defects arising from sale contracts, as regulated by the Civil Code, requires a comprehensive understanding of both their legal definition and the rights and obligations of buyers and sellers. While buyers must exercise due diligence when inspecting goods, sellers must fulfill their obligation to deliver goods free from defects. In a dispute, it is important to note that the choice of remedy belongs to the buyer, who must notify the seller of the discovered defect within a reasonable time. The appropriate remedy will depend on the nature and extent of the hidden defect, as well as the preferences of the parties (typically the buyer).

It is advisable for both buyers and sellers to seek legal counsel in complex cases involving hidden defects to ensure that their rights and obligations are properly addressed.

Legal services offered

Our firm provides professional legal services, including drafting sale contracts, negotiating specific clauses, preparing contract drafts, and offering legal advice both before and after signing sale agreements.

We also provide legal assistance and representation in litigation arising from sale contracts (partial performance, non-performance, hidden defects, etc.).

Attorney Dr. Gidro Dominic-Alexandru
Civil and commercial law specialist