Court:

Commercial court of Ghent, 3rd division, T.G.R., 2004, 319. Parties : B.V.B.A. ID / B.V.B.A I, O and B. Date : January 13 2004

Topics:

The liability of the professional seller towards the buyer on the basis of the contractual warranty for latent defects

The direct liability of the manufacturer towards the buyer on the basis of the contractual warranty for latent defects

The liability towards the buyer of the manufacturer defects caused after the sale of the product, during the packaging thereof by a third party acting on behalf of the buyer, when the manufacturer provided the packer with labels with his trademark and guaranteeing the quality of the product.

Articles:

1641-1648 C.C.

1382-83 C.C.

Facts:

Azalea growers buy from seller I the phytopharmaceutical product Radia, manufactured by O. The product is shipped by O in large vessels to B, who transfers it for the account of seller I into smaller containers. B labels the containers with a label provided by manufacturer O and guaranteeing the quality of the product.

The use of the product damages several azalea crops. It appears that the product was during the bottling by B contaminated with a residue of an herbicide. The azalea growers sue I, on the basis of the latent defect warranty of art. 1641-1848 C.C. I claims that it was impossible for him to discover the defect. They also sue on the same basis O, the manufacturer who argues that the defect came into existence only after the sale and the delivery to B. Seller I and manufacturer B exercise recourse against the bottler B.

Legal Questions:

When can a professional seller of a defective product rebut the presumption of knowledge of the defect resting upon him?

Has the buyer a claim on the basis of the warranty of latent defects against the manufacturer?

Is the seller of a product contaminated during the conditioning thereof by a third party liable if he had a label with his trademark and a guarantee of the quality of the product affixed by the party conditioning the product?

Under what conditions is the party conditioning the product liable?

Has the buyer a claim based on contract law against the person conditioning the product on behalf of the seller?

Decision:

A professional seller is presumed to have known the defects of the product he sells unless it is impossible for him to discover the defect. As the contamination could be discovered by laboratory analysis, the defect is not undiscoverable. The seller more particularly is under the duty to take all necessary measures to discover any defects of his products. In this case he was to control whether the bottling of the product on his behalf did not cause any contamination.

In the case of successive sales, the right to warranty for latent defects is transferred with the goods to the following buyer. It is an accessory to the goods.

The consumer has a direct action against the manufacturer of a defective product. The argument of the manufacturer that the defect came into existence after the moment of the sale is rejected. With the product, the manufacturer O delivered a label with his trademark and confirming the quality of the product to the packer. A trademark holder has the right to object his product being brought into circulation if its quality has been modified. By accepting that his label is affixed on the product by a third party at the moment of the bottling, he is liable as seller for the defects defect caused during the operation of the bottling. Allowing the use of the trademark in circumstances which he does not control while he should be aware of the risk of contamination is a negligence on the part of the trademark holder.

The contractor conditioning the product is liable if it is contaminated during the operation. His obligation is one of result. He is liable not only against his principal but also against the buyer of the product. In the case of successive sales, not only the action for latent warranties is transferred by the seller to the buyer as an accessory of the goods, but also the action which the seller may have against the conditioner of the goods.

Comments:

The decision is interesting in that it provides the buyer with a direct action not only against the manufacturer but also against the contractor who conditioned the product.

Novel is also the reasoning that the seller, as trademark holder, guarantees the quality of the product against any defects caused during the conditioning of the product prior to the moment a label with his trademark and guaranteeing the quality of the product is apposed, even if that moment is posterior to the sale.