Sales contracts regarding cars affected by the VW emissions scandal may be effectively revoked according to Regional Court Krefeld

Regional Court Krefeld, judgements of 14. September 2016 - 2 O 72/16 and 2 O 83/16

According to the Regional Court Krefeld the buyer of a car affected by the so-called VW emissions scandal may revoke the sales contract without specifying a period of time for performance or repair, because a repair is unacceptable in terms of s. 440 sentence 1 German Civil Code (BGB) and the defect is not merely an insignificant breach of duty in terms of s. 323 para. 5 sentence 2 BGB. The Regional Court Krefeld convicted the sued car dealer to take back the cars of the two plaintiffs and to pay back the respective purchase price less a compensation for use (judgements of 14.09.2016, file no. 2 O 72/16 and 2 O 83/16).

As a prerequisite to revoking a sales contract German law generally requires the buyer to specify a period of time, within which the seller has the opportunity to repair or replace the purchased item. There are some legal exceptions to this general rule though, for example if a repair is unacceptable for the buyer. The Regional Court Krefeld decided that with regard to the plaintiffs’ cars this exception applies. Therefore, the plaintiffs could revoke the contract without specifying a period of time. The court specifically stated that even in case of retrofitting the software a "justified suspicion of defect" would remain, so that there were doubts regarding the successful repair. Further, when the revocation was declared it could not have been excluded that removing the manipulating software would have negative effects to other emission values, the fuel consumption and the engine performance.

Moreover, the Regional Court reasoned that at the time of the revocation from the sales contracts at the beginning of 2016 it had not been clear whether and when the Federal Office for Motor Vehicles (KBA) would release the retrofit software for the respective cars.

Furthermore, the loss of trust in the manufacturer also affected the relation to the authorised dealer because the essential repair steps, the development of the software, its testing and obtaining authorisations are performed by Audi, thus by the one who had deceived and, thus, proven to be untrustworthy. The plaintiffs did not have to accept this.

Finally, under German law revoking a sales contract is only possible, if the breach of duty is not insignificant pursuant to s. 323 para. 5 sentence 2 BGB. After comprehensively weighing up all circumstances of the case, the court comes to the conclusion that the threshold of significance was transgressed in this case.

Dr. Martin Alexander, LL.M., Cologne

Katja Labusga, LL.M., Cologne