Defects in the goods sold: the buyer’s remedies

The defect appears after delivery

It happens very often that a company takes delivery of goods, puts them in the warehouse and only weeks later, when it comes to using them, notices that something is wrong: the machine does not reach the stated output, the batch is out of specification. You write to the supplier and the answer comes promptly: you complained too late.

When it comes to defects in the goods sold, that answer is unfortunately often correct. Swiss law grants the buyer effective remedies, but makes them conditional on diligent and prompt conduct. A second point should be noted straight away: anyone searching online mainly finds content based on Italian law, built around art. 1490 of the Italian Civil Code. Those rules do not apply in Switzerland. What governs are art. 197 et seq. of the Code of Obligations, with their own requirements and deadlines. For a complete overview of disputes between businesses, see our page on commercial contract disputes.

When a defect exists (art. 197 CO)

Under art. 197 CO the seller is liable both for the qualities warranted and for defects that, physically or legally, remove or substantially reduce the value of the goods or their fitness for the intended use. The second paragraph adds what matters most in practice: the seller is liable even if those defects were unknown to him. It is strict liability, independent of any fault.

Two limits temper it. The seller is not liable for defects known to the buyer at the time of the sale (art. 200 para. 1 CO); for defects the buyer should have discovered using ordinary diligence, the seller is liable only if he had warranted that they did not exist (art. 200 para. 2 CO). Someone who buys a vehicle with 200,000 kilometres and finds it worn has no defect to invoke; someone who had been assured in writing that the engine had been replaced does.

The relevant distinctions therefore need to be drawn. If the object is land, the claim becomes time-barred five years after acquisition of ownership (art. 219 para. 3 CO). If the counterparty did not sell goods but undertook to produce a work, this is a contract for work (art. 363 et seq. CO), where the customer may also demand repair (art. 368 para. 2 CO). In a sale, that right does not exist by law.

Notice of defects: the step that loses most cases

Art. 201 CO imposes two distinct duties. The buyer must inspect the goods received as soon as the ordinary course of business allows and, if he discovers defects for which the seller is liable, give the seller notice of them immediately. Otherwise the goods are deemed accepted and the warranty lapses, without any act of the seller being required.

An exception applies to defects not detectable by ordinary inspection, latent defects. For these the period runs from discovery and not from delivery: as soon as they emerge, notice must be immediate, failing which the goods are deemed accepted in that respect as well (art. 201 para. 3 CO).

How much time is there really? The law says "immediately" and sets no number of days. The settled case law of the Federal Supreme Court reads that word narrowly: the measure is days, not weeks, and between businesses the margin is particularly narrow. In practice, anyone who waits until the end of the month to write to the supplier already has a problem.

Since 2026 there is an exception: 60 days for construction defects. Where the defects of goods incorporated into immovable works in accordance with their normal intended use have caused the defects of the works, the buyer must give notice of them within 60 days. Defects not detectable by ordinary inspection must be notified within 60 days of their discovery. Agreements providing for shorter periods are ineffective (art. 201 para. 4 CO, in force since 1 January 2026).

It is the rule designed for the construction sector: windows, boilers, floors, systems installed in a building that turn out to be defective and compromise the works. Outside that situation, the usual "immediately" applies. In the same case the claim becomes time-barred after five years instead of two (art. 210 para. 2 CO).

The form is not prescribed, the proof is. A telephone call leaves no trace. Notice must be given in writing, describing the defect in detail and not in generic terms, and sent in a way that allows receipt to be proven.

The buyer’s three remedies (art. 205 and 206 CO)

Once the defect has been notified in time, the buyer chooses between the two actions under art. 205 CO. With the action for rescission he seeks to unwind the sale: he returns the goods and recovers the price. With the action for reduction he keeps the goods and claims compensation for the diminished value, that is, a reduction in the price.

The choice is not unlimited. If the court does not consider rescission justified, it may confine itself to reducing the price (art. 205 para. 2 CO): a minor defect does not allow the contract to be dissolved. Conversely, where the diminished value equals the amount of the price, only rescission remains (art. 205 para. 3 CO).

The third remedy applies solely to fungible goods: where the sale concerns a given quantity of generic goods, the buyer may demand the same quantity of goods of the same kind free of defects (art. 206 CO). This is replacement delivery, workable for a batch of standard components, not for a machine built to order.

By way of example: a company buys a plant for CHF 48,000 and finds output one fifth lower than agreed. If the plant remains usable, the realistic route is a reduction in the price; full restitution would probably be held disproportionate.

Here the difference that most often surprises clients should be flagged: the law provides no right to repair. In a sale the buyer cannot require the seller to repair the goods unless the parties have agreed to it. Many suppliers include in their general terms a clause limiting the warranty to repair alone, substituting it for the statutory remedies. It is valid, and it is worth reading before signing.

Damages are added to rescission: the seller returns the price with interest and is liable for the loss arising directly from the delivery of defective goods, regardless of fault (art. 208 para. 2 CO). For further loss he is liable only if he fails to prove that no fault is attributable to him (art. 208 para. 3 CO).

Limitation period and exclusion clauses (art. 210 and 199 CO)

Warranty claims become time-barred two years after delivery, even where the buyer discovered the defects only later, unless a longer contractual warranty applies (art. 210 para. 1 CO). The period rises to five years for defects of goods incorporated into immovable works in accordance with their normal intended use, which have caused the defects of the works (art. 210 para. 2 CO): windows, systems, cladding installed in a building.

The period may be extended, not freely shortened. An agreement reducing it to less than two years, and to less than one year for second-hand goods, is void where the goods are intended for the buyer’s personal or family use and the seller acts in the course of his professional activity (art. 210 para. 4 CO). Between businesses, a contractual reduction remains admissible.

Clauses such as "sold as is" are valid in principle, but have a clear limit: they are void if the seller fraudulently concealed the defects (art. 199 CO). In the same vein, a seller who intentionally deceived the buyer cannot invoke the limitation period (art. 210 para. 6 CO). It would after all be odd if concealing a known defect could work to the seller’s advantage.

What it means for the parties

For the buyer: organise the inspection of goods as an internal procedure, setting out in writing who checks and within what time. When a defect appears, send the written notice in the days immediately following, describing the defect precisely. Before paying, check whether the supplier’s general terms shorten the limitation period or replace the statutory remedies with repair alone.

For the seller: liability is independent of good faith, so ignorance offers no protection. What does protect is a precise description of the goods in the offer, because every quality warranted becomes the subject of the warranty. On receiving a complaint, check at once whether notice was given in time: that is often the point on which the dispute is decided.

Frequently asked questions

How long do I have to report a defect to the seller?

The law does not state a number of days: it requires notice "immediately" after discovery (art. 201 CO). In commercial practice the measure is a few working days from the finding. An exception applies, since 1 January 2026, where the defects of goods incorporated into immovable works have caused the defects of the works: there the period is 60 days and cannot be shortened by contract (art. 201 para. 4 CO). For latent defects the period runs from discovery, not from delivery. Notice must be given in writing and in a form that allows receipt to be proven.

Can I require the seller to repair the defective goods?

In principle no. A sale does not confer a statutory right to repair: the remedies are rescission, reduction of the price and, for generic goods, replacement delivery (art. 205 and 206 CO). A right to repair exists only if agreed, or in a contract for work (art. 368 para. 2 CO).

Is a "sold as is" clause valid?

Yes, an exclusion or limitation of the warranty is admissible in principle. It becomes void if the seller fraudulently concealed the defects of the goods (art. 199 CO). Towards a consumer, moreover, the limitation period cannot be reduced to less than two years, or less than one year for second-hand goods (art. 210 para. 4 CO).

I discovered the defect after two years: can I still do anything?

As a rule the claim is time-barred, because the period runs from delivery even if the defect emerges later (art. 210 para. 1 CO). What remains is the five-year period for goods incorporated into immovable works, any longer contractual warranty, and intentional deception by the seller, which prevents him from invoking the limitation period. A buyer who gave notice of the defect in time may also raise it as a defence if the seller demands payment.