Defect in quality or defect in title? The difference and your rights

In warranty law, a distinction is made between defects in quality and defects in title. With a defect in quality, something is wrong with the item itself (fault, wrong condition). With a defect in title, third parties can assert rights to the item (e.g. the item is encumbered or stolen). In both cases you have the same defect rights.

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A defect in quality exists if the item does not have the agreed condition or is not suitable for ordinary use (§ 434 BGB). A defect in title exists if third parties can assert rights against you (§ 435 BGB).

With both types of defect you have the same rights (§ 437 BGB): supplementary performance, withdrawal, reduction and, under certain circumstances, damages.

What you should do now

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1. Classify the defect
Something is wrong with the item (fault, wrong quality) = defect in quality. A third party has rights to it (pledge, ownership, stolen) = defect in title.
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2. Give notice of the defect
Report the defect to the seller and demand supplementary performance with a deadline, regardless of the classification.
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3. Use further-reaching rights
If supplementary performance fails, you can withdraw or reduce the price; in cases of fault also demand damages.
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4. Be especially careful with defects in title
If theft or third-party ownership is behind it (e.g. with used vehicles), secure all documents and check the origin and papers.

How to spot the scam

With the used car, the papers, chassis number or chain of owners do not match.
A pledge or reservation of title of a third party rests on the purchased item.
The seller cannot prove ownership.

Frequently asked questions

What is a defect in quality?

A defect in the item itself: it does not have the agreed condition, is not suitable for the intended or ordinary use or deviates from assurances (§ 434 BGB). Example: a defective device.

What is a defect in title?

When third parties can assert rights to the item that interfere with your use (§ 435 BGB), such as an existing pledge, third-party ownership or an item reported as stolen.

Do I have the same rights with both?

Yes. Whether a defect in quality or in title, you are entitled to the same defect rights (§ 437 BGB): supplementary performance, withdrawal, reduction and, where applicable, damages. The classification does not change this.

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.