knowledge 5 October 2026 |

Buyers beware Sellers can repair: CJEU confirms product safety defects do not automatically allow termination under the EU Sale of Goods Directive

Importantly, the CJEU accepted that the mere fact that a defect affects the safety of the goods does not automatically provide sufficient grounds to terminate the contract. Rather, in determining whether a consumer could insist on the termination of a sales contract, an objective test which considers the goods concerned, the nature of the defect, the adverse effect on safety and the circumstances in which the goods can be repaired is required to determine whether the consumer can objectively maintain confidence in the seller’s ability to bring the goods into conformity.   

Background Facts

The case concerned the purchase of a second-hand vehicle by a consumer in Austria in 2023. The vehicle was described as ‘adequately fit for use’. However, approximately one week later, the consumer had the vehicle inspected and found a serious defect affecting operational safety and road safety which had existed at the time of purchase. The defect, an engine oil leak, could be repaired at a minimal cost.

The consumer refused the seller’s offer of repair and brought a claim through the Austrian courts, seeking termination of the sales contract and reimbursement of the purchase price and associated costs. The seller argued that the consumer had refused the offer of repair without reason and should therefore not be allowed to terminate the contract.

Procedural history and questions referred

The Austrian Court initially found for the seller, considering that the vehicle could be brought into conformity through repair at low cost. On appeal, the Court found for the consumer, treating the impact on safety as decisive and the availability of a cheap repair as irrelevant. The Austrian Supreme Court referred two questions to the CJEU as follows:

1. whether, under Article 13(4)(c) of the Sale of Goods Directive (the “Directive”) a defect affecting the safety of the goods is automatically sufficiently serious to justify termination and reimbursement; and
2. if so, whether that remains the case where the defect can be remedied at relatively low cost.

CJEU Judgment

The CJEU found that, having regard to the Directive’s wording and broader context, termination is permissible only where the lack of conformity is not minor and is such as to affect the consumer’s confidence in the seller’s ability to bring the product into conformity. As the Directive seeks to strike a balance between the rights and obligations of the consumer and the seller, it would be inappropriate to treat every safety defect as automatically sufficient to trigger termination.

That assessment is objective and must be made in light of all the circumstances of the case, including the nature of the defect, the goods concerned, the repair conditions and the effect on the safety of the consumer or third parties.

On this basis, the CJEU concluded that the mere fact that a lack of conformity adversely affects the safety of the goods and can be repaired inexpensively is not sufficient to reach the standard required by the Directive to justify immediate termination and reimbursement of the purchase price.

Irish context

In Ireland, the Consumer Rights Act 2022 (the “CRA”) transposes the Directive. Section 26(1)(c) CRA is the equivalent of Article 13(4)(c), allowing a consumer to terminate a contract where a product’s lack of conformity is of such a serious nature as to justify termination.

The CRA does not allow for termination where a lack of conformity of a product is minor, and in case of a dispute, this will be for a seller to argue and demonstrate. The CRA also provides for the same objective test as invoked by the CJEU to determine the seriousness of the lack of conformity. The objective test combines specific factors for consideration, including the consumer’s confidence in the seller to bring the product into conformity and the consumers reasonable expectation that repair or replacement will not remedy the serious defect. 

KFZ Kolak provides some comfort to sellers that where a repair or replacement can be provided the product’s defect in and of itself will not likely result in the automatic termination of the sales contract, even where that defect affects the safety of the goods. The ruling gives sellers a basis to insist on a first chance to repair when a consumer demands immediate termination for a safety defect. That protection holds only where the seller’s own conduct is such as to maintain the consumer’s confidence in its ability to repair the defect.

For more information or specific advice, please contact Conor Cunningham or Marcus Mahony.

Also contributed to by Ben Robertson.