Warranty for Hidden Defects under Statute (implied warranty)

Article 1641 of the French Civil Code applicable to sales provides for the seller’s liability for hidden defects in a product that make it unfit for the use for which it was intended or that limit its use to such an extent that the buyer would not have purchased it or would have paid a lower price if he or she had known about the defects at the time of sale.

When does the implied warranty for hidden defects apply?

For the warranty to apply, four requirements must be met : 

• the product must have a defect ;
• this defect must render it unfit for the use for which it was intended and, therefore, be a significant defect ;
  
• the defect must be hidden ;
  
• the defect must exist prior to the sale.
  

The warranty does not apply if the problem is simply due to improper use of the product, without it showing a defect.

Note : The warranty against hidden defects is excluded by statute for “as is” sales where the buyer buys the item at its own risk. Sales of buildings to be built and of domestic animals are subject to a different set of laws. There are also other exceptions applicable to sales resulting from judicial proceedings such as, for example, foreclosure proceedings (French Civil Code, Art. 1649).

When must a warranty action be filed ?

According to articles 1648 and 2232 of the French Civil Code, a warranty action against a seller for hidden defects must be brought within 2 years of discovery of the defect, but such time period is limited to a maximum of 20 years from the date of the cause of action - which, in matters of warranty against hidden defects, is the date of the sale by the party whose liability is claimed. (Court of Cassation, Mixed Panel, July 21, 2023, No. 21-17.789)

Is the implied warranty for hidden defects automatically transferred to successive buyers in the event of sale ?

A product might be the subject of several successive sales. The original seller, in such case, remains liable under the warranty--not only towards the buyer with whom he has contracted but also with respect to all subsequent buyers. As a result, in the event of successive sales, the subsequent purchaser can take action against his seller or against the previous sellers, the warranty against hidden defects being transferred with the property.