Work Contract – Part 2: Warranty Obligations
If a contract is classified as a work contract, this has far-reaching consequences, especially as far as warranty obligations are concerned. i.e. they are much more extensive under the work contract than under the contract for services. But the customer has also more obligations.
Acceptance of the Work
Once the ordered work is delivered to the customer, the latter is obliged to check it as soon as possible for any shortcomings (article 367 of the Swiss Civil Code). Should such shortcomings be found, then the customer must report them to the contractor. If the customer fails to do so within a reasonable time, it is understood that the delivered work has been approved by tacit agreement. This means that the customer has been released from any liability whatsoever (article 370 clause 1 of the Swiss Civil Code). An exception are deficiencies that may occur only at a later date. But they also have to be immediately reported. Otherwise, it is equally assumed that the work has been accepted (article 370 clause 3 of the Swiss Civil Code).
Possibilities In Case of Defects
Should any shortcomings be found and reported within a reasonable time, then, pursuant to article 368 of the Swiss Civil Code, the customer has four options to choose from. The first possibility is always to have the work repaired free of charge (clause 2). This variant is subject to the condition that such repair is technically practicable and would not cause any excessive costs. However, it needs pretty much (up to 50% of the work value) before such costs can be classified as excessive. If the delivered work can still be repaired, the contractor is entitled to choose improvement before any other option. If the shortcomings are minor, the second possibility is to request a price reduction for the work (clause 2). In this case, the reduction would be applied against the consideration. The third option is to withdraw from the contract as set forth in clause 1. If the work suffers from defects so serious that it is useless for the customer or the latter cannot be reasonably expected to accept it, the customer can withdraw from the contract. The contract becomes sort of terminated. The withdrawal is excluded for works related to land property, however, as removing such works would involve disproportionate disadvantages. A good example is a house. All these rights can be exercised regardless of the contractor’s fault. Apart from the three options outlined above and whatever the customer elects to use, the (fourth) possibility is to claim damages.
Customer’s Liability
The customer is not entitled to exercise any of the rights described above if the shortcomings are due to the customer’s fault. Pursuant to article 369 of the Swiss Civil Code, no deficiency can give rise to any claim whatsoever if it is the customer who is responsible for it as a result of instructions given against the contractor’s explicit warnings.
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