The change in the limitation periods for the contract of sale and the contract of enterprise

On January 1, 2013, a change in the statute of limitations regarding warranty for defects in both contracts of sale and contracts of enterprise went into effect.

This amendment is the result of the implementation of two parliamentary initiatives filed in 2006 and 2007.

These initiatives were implemented through three legislative amendments:

1. First, that of Art. 199 CO, in that clauses setting aside or reducing the two-year limitation period in sales contracts concluded between a professional and a consumer would, where applicable, be null and void.

2. Secondly, that of Art. 210 CO in order, on the one hand, to increase the limitation period for warranty actions for defects to two years for all types of sales concerning movable things and, on the other hand, to introduce a limitation period of five years whenever things with a defect are incorporated into a real estate work.

3. Finally, with regard to contracts for work and services, that of Art. 371 para. 1 CO, referring to Art. 210 CO, in order to extend the ordinary time limit to two years here as well.

The new Article 210 CO

With regard to Art. 210 CO, the limitation period for the warranty claim for defects in the thing sold is now two years from the delivery to the buyer (para. 1). However, the limitation period is five years if the defects of the thing incorporated in a real estate work in accordance with its intended use are the cause of the defects of the real estate work (paragraph 2). In addition, any clause providing for a limitation period of less than two years, or one year in the case of the sale of a second-hand thing, is void if the thing is intended for the personal or family use of the buyer and if the seller is acting in the course of a professional or commercial activity (para. 4).

The new Article 371 CO

With regard to Art. 371 CO, the limitation period of two years (respectively five years) is taken over with regard to defects in movable property (respectively defects in movable property integrated into immovable property in accordance with the use for which it is normally intended if they are the cause of the defects in the property; cf. para 1). The rights of the owner of a real property work against the contractor, architect or engineer are subject to a five-year limitation period, as was previously the case (para. 2). However, the term “real property” has been preferred to the term “real property construction” in the current art. 371 para. 2 CO. Finally, a general reference to the rules on the limitation of the buyer’s rights is provided in para. 3.

The advantages

The coordination of time limits in the case of things sold that are integrated into a real estate structure and the harmonization of Swiss law with international and European law are the undeniable advantages of this revision. The introduction of a two-year limitation period also reduces the unilateral disadvantage to the buyer recognized by the Federal Court due to the short limitation period currently provided. Better consumer protection therefore justifies the extension of the limitation period (such a period remains short in comparison to the general limitation period of 10 years, Art. 197 CO).

In addition, the two-year period is a mandatory rule for contracts concluded with consumers, which further strengthens the protection of the latter, as the relevant provisions are currently of a dispositive nature. The interests of the seller are not harmed by this extension of the time limit due to the strict obligations of verification and notification of defects incumbent on the buyer (Art. 201 CO); moreover, he also benefits from this change, since he will be able to turn against his suppliers within the same period.

Finally, the coordination of the limitation periods for contracts of sale and works is a considerable advantage for contractors. At present, if the work consists of real estate construction, coordination is not given between the contract of sale and the contract for work and services, since the contractor can be sued within a period of five years by the client, whereas he himself has only one year vis-à-vis his suppliers when movable things are integrated into a real estate construction. On this question of coordination, however, it should be pointed out that a certain divergence remains concerning the starting points of the time limits: in the contract of sale, the starting point is the delivery of the thing, whereas in the contract for work and services, it is the acceptance of the work that matters.

If you have any doubts about the issues raised in this notice, the swisNotaries are available to advise you.

Porrentruy / St-Aubin, 01/03/2013