A sales contract obliges the seller to deliver an object free of defects. If defects appear or delivery fails, the buyer has a three-tier legal protection package — provided deadlines are met.
The sales contract is governed by the Code of Obligations — Art. 184 to 236 CO (SR 220). For Swiss SMEs and private persons, defect rights and default are decisive in disputes. Whoever misses the notification deadlines loses their rights — usually permanently.
In international trade, the UN Sales Convention CISG (SR 0.221.211.1) applies in addition, where both parties are based in contracting states and no choice of law excludes it. Switzerland has been a contracting state since 1991 — many importers and exporters overlook this.
1. What does the seller owe?
The seller owes the transfer of ownership and possession of the agreed object (Art. 184 para. 1 CO). The object must also be free of defects — it must have the warranted properties and be suitable for the customary use (Art. 197 CO). Important: the seller is liable also for defects they did not know, unless they were excluded (Art. 199 CO).
2. Types of defect — what counts?
The Code of Obligations distinguishes three categories:
• Warranted properties — the seller has promised a specific property (e.g. year of construction 2024 for a used car), and it is missing.
• Functional defect — the object is not fit for the intended use (e.g. a laptop that does not boot).
• Value-reducing defects — the object has the basic function but properties that reduce its value or fitness (e.g. paint damage on a new car).
3. Duty to inspect and notify (Art. 201 CO)
The buyer must inspect the object as soon as possible after delivery and notify any defects to the seller immediately. What 'immediately' means depends on the type of transaction — in commerce usually within a few days, between private persons within one to two weeks.
Hidden defects — those not detectable at first inspection — must be notified immediately upon discovery, but at the latest within the limitation period (Art. 210 CO, generally 2 years).
In practice, most defect claims fail not on the defect — but on the late notification. A written, dated notification with photo documentation in the first days after delivery is the only safe evidentiary form.
4. Rescission, price reduction and remedy
Where the buyer has notified in time, three main rights are available under Art. 205 CO:
1. Rescission — unwinding of the contract: buyer returns the object, seller refunds the purchase price.
2. Price reduction — reduction of the purchase price by the loss in value.
3. Remedy — repair by the seller (where contractually agreed or required by the nature of the object).
For substantial defects (e.g. missing warranted property), rescission is usually accepted. For minor defects, the court often imposes price reduction — rescission would be disproportionate.
5. Damages in addition
Regardless of rescission or reduction, the buyer can claim damages under Art. 208 CO if additional loss has occurred — e.g. repair costs, lost profit, cost of cover purchase. The seller is liable for faulty defects on the full performance interest.
6. Default — when the seller fails to deliver
If delivery is not made on the agreed date, the seller is in default. The buyer sets a reasonable grace period and can then (Art. 107 CO):
• Insist on performance and claim default damages.
• Waive performance and claim damages for non-performance.
• Withdraw from the contract.
For fixed-date transactions (e.g. wedding dress for a date), no grace period is needed — the contract lapses with the missed date.
7. Contractual defect exclusions — valid or not?
Sellers often try to sell with 'as is' or 'under exclusion of any warranty'. Such clauses are not always enforceable:
• In case of fraudulently concealed defects, the exclusion does not apply (Art. 199 CO — 'where the seller knew of the defect, the agreement is void').
• For private sales between consumers, the exclusion is largely effective.
• In B2B trade, the exclusion is often accepted in practice, provided it was individually negotiated.
• For general terms and conditions, content review under Art. 8 UCA also applies.
8. International purchases — CISG and choice of law
For cross-border sales between companies in CISG contracting states (e.g. Switzerland–Germany, Switzerland–Ukraine), the UN Sales Convention applies automatically unless excluded. It brings its own deadlines and remedies — for example a 2-year period for defect notification from delivery (Art. 39 para. 2 CISG) instead of the Swiss immediate notification rule.
Anyone failing to check the CISG scope risks surprises — either more favourable buyer rights or stricter seller obligations than expected.
9. Limitation periods — the hard limits
Defect rights from a sales contract are time-barred under Art. 210 CO generally 2 years after delivery. For constructions the period is 5 years. For fraudulently concealed defects, the general 10-year limit applies (Art. 210 para. 6 CO). These periods were harmonised in 2013 — earlier shorter periods are no longer relevant.
Practical note
Sobiera Legal Consulting advises Swiss SMEs and private persons on sales contracts with foreign elements, defect disputes and the choice of correct contractual clauses — in Ukrainian, Russian, German, English and French. In an acute defect notification, the first days are decisive — a quick assessment avoids expensive evidence problems later.