On 21 January 1975 the plaintiff bought a used motor car from the defendant. A so-called ‘Order Form’ in standard form provided that the motor car was being delivered as ‘used, as inspected, every warranty being excluded’. A handwritten addition noted ‘ … is being delivered in an unexceptionable technical condition’. On the reverse side of the form the defendant’s general conditions of trade were set out which are provided in article VII [Warranties].

1. No warranty is given in respect of the objects sold. This does not apply if and to the extent that the seller has provided a warranty in writing by a separate letter of guarantee.

2. No right exists to demand a return of the price in return for the goods [Wandelung], a reduction of the price [Minderung] or damages.

On 28 March 1975 the plaintiff, while driving the motor car, suffered an accident due to a blow-out of a rear tyre which was not of the type required by law to be fitted to this type of car. He sued the defendant for damages. The latter pleaded inter alia that the period of limitation had run.

The Court of First Instance and the Court of Appeal of Bamberg allowed the claim. A second appeal was rejected for the following

Reasons

I. The appeal is rejected. The appellant is correct, it must be admitted, in objecting to the view of the Court of Appeal that the defendant is liable to pay damages to the plaintiff under § 463 I BGB. For that claim is caught by the period of limitation, contrary to the opinion of the Court of Appeal.

1. (a) The Court of Appeal is right in regarding the statement that the motor car was being delivered in an unexceptional technical condition as a guarantee of a quality in the meaning of § 459 II BGB, i.e. as a guarantee that at the time of delivery the vehicle is technically in order, ready to be used and safe in operation. The question as to whether such details contained in a contract of sale of the object sold only serve to describe it (§ 459 I BGB) or whether they warrant a certain quality (§ 459 II BGB) is a matter of factual appreciation in the individual case, provided that—as in the present case—the statements are not of the type which are normally made in connection with such transactions. The interpretation reached by the Court of Appeal is possible, conforms to the principles laid down by the practice of the courts concerning the assurance of the existence of certain qualities [references], and therefore binds this court. Moreover it is convincing. A purchaser from an appointed dealer of a certain manufacturer of a used car of this particular make is interested, above all, that the car should at least conform to the official rules for permitting the car to be used on the roads (§§ 18 ff. of the Decree concerning the Admission of Motor Vehicles for Use on Roads) and can be put into operation without any hesitation. If the dealer in used cars, contrary to the practice in the trade with second-hand cars, confirms in addition that the car’s condition is technically unexceptionable, it is at least likely that he undertakes thereby to be responsible for any possible damage, if those conditions are not present. The argument of the appellant is inapposite to the effect that it cannot possibly be assumed that the defendant intended to warrant the technically unexceptionable condition of all parts of the used car, seeing that thereby the plaintiff would be in a much more advantageous position than if he had bought a new car. Clearly the Court of Appeal did not wish to attribute to the contractual statements of the defendant such an extensive meaning; it interpreted them and could interpret them to warrant operational readiness and safety …

Since by fitting tyres which did not conform to the permit for operating the car, the permit had become invalid (§§ 18(1), 19(2), 21 of the Decree concerning the Admission of Motor Vehicles for Use on Roads) and since, moreover, the vehicle … fitted with tyres which did not comply with the legal requirement, was no longer operationally safe, the defendant is liable to pay to the plaintiff damages for having failed to perform the contract (§ 463 first sentence BGB).

(b) The Court of Appeal is also correct in holding that the liability of the defendant for promised qualities has not been excluded either by the standard clause ‘used, as inspected, every warranty being excluded’ or by the exemption clause of the general conditions of trade reproduced on the reverse side of the standard contract. This Division has stated repeatedly that an exemption clause in a standard contract does not affect the liability of a seller for the absence of stipulated qualities [references]. If the seller is unwilling to remain subject to the risk of liability in accordance with the provisions of the law, he must indicate this unequivocally and in a manner intelligible to the buyer—with particular reference to the promises made—in the text of the contract or otherwise at the conclusion of the contract [reference]. This had not happened in the present case. Therefore, the defendant cannot plead either that his declaration, which amounts to a stipulation as to quality, was not made in the form prescribed by article VII no. 1 of its general conditions of trade (‘… by a separate letter of guarantee’) [reference].

2. However, the claims for damages available to the plaintiff under § 463 I BGB are caught by the period of limitation. The Court of Appeal believes that the period of limitation amounting to six months according to § 477 I BGB had only begun to run when the plaintiff was able to perceive the cause of the accident with the necessary degree of certainty following the receipt on 23 September 1975 of the written information by the manufacturer of the tyre. However, this view of the law is erroneous.

(a) It is true that this Division has raised the question several times—although it was not decisive in the final resort—whether in certain circumstances in order to prevent gross injustice or a curtailment of buyers’ rights the period of limitation for claims for damages in respect of warranties arising out of a sale, instead of beginning to run from the delivery of the object sold, should not start at a later moment only, e.g. when the damage occurred, when the buyer could become aware of it, or quite generally when it becomes possible in the individual case to raise such claims so as to interrupt the period of limitation [references]. These considerations, however, concerned without exception the question of liability for damage arising out of defects of the goods sold (Mangelfolgeschäden). In typical cases this often manifests itself in other legally protected assets of the buyer only a considerable time after the object sold has been delivered, or the damage may only occur at a later time.

In the present case, however, the issue is exclusively one of damages for failure to perform. It is unnecessary to dilate on this in respect of costs of repair, reduced value, and loss of use; the same applies to the cost of expert opinions relating to the existence of defects, for these are necessarily the consequences of defects, they are directly connected with remedying the defects, and—like profits lost as a result of the defects [references]—they reduce the value of the consideration received by the buyer in return for the price [reference].

(b) It need not be decided here as to whether to this extent, despite the clear wording of § 477 I BGB, a case exists in certain circumstances for postponing to a later date the moment when the period of limitation begins to run [references]. For even if this were to be assumed in favour of the plaintiff, the time for bringing a claim would have passed …

II. Since the contractual claims of the plaintiff against the defendant are caught by the period of limitation, the reasons given by the Court of Appeal do not support the decision under appeal. However, the decision is right for different reasons. The claim is well founded in tort (§ 823 I BGB); in this respect the defence that the period of limitation has run is ineffective, since the claim in tort is not subject to the short period of limitation [reference].

1. The Court of Appeal expresses doubts as to whether an action in tort lies—without going into details—because the plaintiff had acquired the motor car in a defective condition. His property was threatened from the outset with the danger of further losses through an accident. The fact that this threat had materialized did not constitute a separate violation of property. This view cannot be accepted.

(a) It is true that in the decision referred to by the Court of Appeal [reference] the Bundesgerichtshof rejected the claim of the owner of a building based on the violation of his property because the building has been badly constructed (§ 823 I BGB); it rejected the claim in respect of this building in particular, if the materials used for the building were defective and if, as the building work progressed, each time another defectively constructed section became the property of the owner of land [reference]. These cases are characterized by the fact that the defect of the object delivered was inherent in it as a whole, that the latter was therefore altogether useless to the owner from the beginning and that the defect was identical with the damages claimed [reference].

(b) With reference to this case, this Division in its decision of 24 November 1976 [case 48, above] has distinguished the case where the seller transferred to the buyer title in an object which was unexceptionable in general and merely included a defective control instrument (a safety switch)—the function of which was limited—the failure of which after title has passed caused further damage to the installation as a whole. In that case this Division accepted that property had been damaged illegally. It regarded as decisive that the cause of the danger represented by the contemporaneous supply of a defective switch had only materialized in damage exceeding the defect itself after title had passed and that as a result the property of the buyer, which was in every other respect free from defects, had been damaged as a whole. Rengier [reference] and Schubert [reference] criticize this decision on the ground that even small, limited defects render the entire object sold defective from the outset, as well as useless having regard to the danger of its destruction connected therewith. Weitnauer [reference] does not deny that property has been violated—illegally on the facts—but argues that a subsequent destruction of the installation does not constitute damage; in his opinion the latter event had only laid bare damage which had occurred previously. The value of an installation, the self-destruction of which as a result of a defect could be expected, was ‘nil’ from the beginning.

These objections—which are substantially identical—are not convincing in the opinion of this Division and do not persuade it to abandon its position in [reference]. Above all, it is not correct that in commerce a danger-ridden installation is treated as valueless. This might perhaps be so if the defect in question is absolutely incapable of detection and must lead to the destruction of the entire installation. No such case is in issue here. As Rengier and Schubert have pointed out, it may be difficult in individual cases to distinguish between a defect which affects the object transferred in its entirety from the beginning and a limited defect which only later on caused additional damage to an object which is otherwise free from defect. This Division has already stressed this in its decision of 24 November 1976 [reference], but the unequivocal facts of that case did not make it necessary to establish detailed criteria of delimitation. This Division is also not persuaded by the view of Rengier and Schubert that in allowing a claim in tort, the Bundesgerichtshof undermines the provisions of the law of sale concerning damages for non-performance (§ 463 BGB) as well as the rule concerning the limitation of this action laid down in § 477 BGB. A real concurrence of actions exists between the claim for damages for breach of contract and that in tort; in the latter case—leaving aside the special aspects of products liability—the claimant bears the burden of proof that the tortfeasor is to be blamed, unlike in the case of a claim in contract (§ 282 BGB). It follows that each of these two claims is governed by its own rules [reference]. In cases such as that which this Division had to decide [reference] no reason exists for denying the injured party recourse to claims in tort and thus for placing the party causing the damage in a better position than a third party who had incorporated a defective individual part into an object of a sale after its delivery to the buyer which led to the destruction of the latter.

(c) The case to be decided now—damage to a purchased motor vehicle arising out of an accident due to the fitting of a tyre contrary to the regulations—must in the opinion of this Division be treated similarly. On the one hand, the motor car which the plaintiff bought from the defendant was defective as far as the rear tyres were concerned. On the other hand, the car as a whole remained a valuable asset. Only after ownership had passed, a cause of danger resulting from this defect resulted in different and much higher damage compared with the original defect when an accident occurred in actual circulation. If the course of events had been different, especially if the tyres had been changed in time, this damage, which is different in substance from that of having tyres fitted which were contrary to the regulations, would have been avoided. Therefore it must be held that the defendant has violated the plaintiff’s property illegally … It would seem that also the Sixth Division of the Bundesgerichtshof in its decision of 30 May 1978 [reference], which is to be published, proceeded from the above-mentioned view of this Division.

2.

(a) [The court considered the culpability of the defendant] …

(b) [The court considered the contributory negligence of the plaintiff] …

3. Finally, faced with a claim for damages based on tort (§ 823 I BGB) the defendant cannot rely either on the exemption clause in the standard contract form (article VII of the defendant’s general conditions of trade) and on the fact that the plaintiff bought the vehicle ‘as inspected’. It is true that in all trade with second-hand cars a very wide exclusion of liability accords with the customs of this branch of business; this Division has described it as ‘more or less a requirement of economic reason’ [reference]. On the other hand, in the present case the defendant gave an express assurance by a personal statement that the used car was in an ‘unexceptional technical condition’. If the defendant also intended to exclude similar claims for damages based on tort, thus rendering his assurance largely ineffective in this area of liability and therefore of no value for this buyer, he should have stated this unequivocally. The simple reference, made in standard form in connection with the arrangement concerning contractual warranties to the effect that ‘no right exists to demand … damages’ is certainly insufficient to embrace such an extensive exclusion of liability, having regard to the special features of the present case. The further question can remain undecided as to whether generally, even in the absence of special assurances, exemption clauses of the kind employed here in the trade with second-hand cars also cover claims for damages in tort [reference].