From 1 January 2013, a change to Swiss law means longer seller warranty periods apply. Unless otherwise agreed, sellers have to warrant the absence of defects in sold products during a period of two years (previously: one year). Due to transition rules, warranty periods already running on 1 January 2013 may be extended for even longer.

Who has to provide a warranty?

By law, the person selling a product must warrant to the customer (whether a dealer or end-user) the absence of defects in the product.

The seller’s statutory warranty must be distinguished from the manufacturer’s or dealer’s guarantee. Depending on its form, the manufacturer’s or dealer’s guarantee may modify or even exclude the statutory warranty. If this is not the case, guarantee claims may exist in parallel to statutory warranty claims.

What does a seller have to warrant?

A seller has to warrant the contractually agreed properties and the absence of product defects at the time of delivery.

Compared with this, manufacturer’s and dealer’s guarantees usually confer a right to claim for product defects or even product losses that arise or occur during a certain guarantee period.

What warranty rights does a customer have?

Subject to certain conditions, the statutory warranty entitles a customer, at its own option, to repayment of a part of the purchase price corresponding to the reduction in value of the product, to revoke the purchase completely or to exchange the defective products for products free from defects. Customers may also claim damages.

Compared with this, manufacturer’s and dealer’s guarantees usually confer rights to repair or replacement of the defective products at the option of the company providing the guarantee.

What are the new warranty periods?

A seller must honour the warranty of the absence of product defects for two years from product delivery. Previously, the period was one year. For products incorporated into a building (e. g. pipes) and that result in a defect in the building, the new warranty period is five years.

What are the new rules applicable to sales of immovable property and to works contracts?

A seller selling immovable property still has to warrant the absence of defects for five years. Under the law on works contracts, the contractor will now have to provide a warranty for two years.

Do these new periods give rise to concerns under unfair competition law?

As a result of the revised law, manufacturer’s and dealer’s guarantees may lose their advantages over statutory warranties. If so, in some circumstances the promotion of a manufacturer’s or dealer’s guarantee may be unfair and thus unlawful.

Is it possible to contractually limit or even exclude the seller’s statutory warranty based on the revised law?

Yes, based on the revised law a limitation or exclusion is in principle still possible, provided that it is expressly agreed upon. On the one hand, a seller may limit the content of the warranty rights (e. g. exclusion of the right to partial repayment of the purchase price). On the other hand, it may shorten the warranty period for commercial buyers and – for sales of used products (e. g. used cars) only – for consumers. For sales of new products to consumers, the two year warranty period cannot be shortened. Despite this, a seller may exclude the statutory warranty completely. However, it is to be expected that the courts will impose strict standards of form for such comprehensive exclusions. In particular in relation to consumer contracts, there is a high risk that such exclusions will be null and void if they are contained in general terms and conditions.

Does the revised law correspond to EU law?

The revised warranty periods correspond to the periods foreseen by the EU directive. However, the EU directive prohibits any limitation or exclusion of the statutory warranty in consumer contracts. Additionally, manufacturer’s and dealer’s guarantees to consumers must always make reference to the parallel validity of statutory warranty provisions. Swiss law does not provide for this duty to inform consumers.

Which rules apply to warranty periods already running on 1 January 2013 (transition rules)?

One year warranty periods that have not expired by 1 January 2013 will automatically be extended for two full years to 1 January 2015. The same rule probably applies to contractually extended warranty periods with a term shorter than two years. Contractually agreed warranty periods of two years or longer will likely not be extended. It can be assumed that such extended periods will remain unaffected by the transition rules and will thus expire as agreed.

Transition rules do not apply to additional rights granted to the customer in manufacturer’s and dealer’s guarantees (e. g. claims for repair or replacement at the manufacturer’s or dealer’s option). These guarantee rights will expire as agreed.

Five year warranty periods pursuant to the current or the revised law will not be reset on 1 January 2013. The time elapsed prior to 1 January 2013 is to be included in the calculation of these warranty periods.