On 1 October 2024, a judgment of the Gelderland District Court was published in a dispute concerning the consequences of a rescission of a purchase agreement due to defects on a yacht (ECLI:NL:RBGEL:2024:6576).
Facts presented
An individual bought a used yacht from another individual for €650,000. The buyer discovered three defects shortly after delivery: (i) the yacht was not air-conditioned, (ii) the portside engine was defective and (iii) the hardware infrastructure for the use of radio, television and wi-fi was missing.
Among other things, the buyer partially rescinded the purchase agreement out of court and claimed (re)payment of over €55,000. The seller disputes that it had failed to comply with the purchase agreement as well as the amount claimed by the buyer.
Court considerations
Regarding the missing air-conditioning, the court considered that the yacht had a ventilation system that could only heat. However, the sales brochure stated that the yacht was equipped with air-conditioning throughout. Given that statement, the seller was not entitled to rely on the buyer agreeing to a yacht without air-conditioning because of the provision in the sales contract that the yacht be accepted in the condition it was in when viewed. The yacht therefore fails to meet what the buyer was entitled to expect under the purchase agreement, the court said.
The court noted that the seller’s denial that he was under an obligation to deliver an air-conditioned yacht meant that a demand notice from the buyer would have been useless. Under those circumstances, the seller was in default and the buyer was entitled to rescind the purchase contract in respect of the air-conditioning. As a result, the buyer is entitled to a refund of the amount it wrongfully paid for the air conditioner. In that regard, the court considered that the buyer could not expect a new air conditioner on a used yacht, but under the sales brochure, one that was “in very good condition”. The court, using the buyer’s stated new-build price of over €24,000, determines the amount to be repaid at €20,000.
Regarding the defective portside engine, the court considered that even if such a defect was present, the seller was not in default. This is because the buyer only informed the seller of the defect after the buyer replaced the portside engine and disposed of the old engine. It thereby deprived the seller of the opportunity to inspect the portside engine and determine what repair, if any, was needed.
As for the missing hardware infrastructure, the court considered that no deficiency had been established. It was not disputed between the parties that the yacht was equipped with an antenna and a wi-fi router. The buyer did not explain what hardware infrastructure would be missing, and the seller explained that even if the wi-fi router would not work, this was because the buyer had failed to take out a new wi-fi subscription.
Lessons learned
This case shows that not every defect justifies a rescission of a purchase agreement. Not only must the buyer prove that there is a defect for which the seller is liable, he must also – in principle – give the seller an opportunity to repair the defect. As this case did not involve a consumer purchase, the buyer could not derive any rights from the legal presumption that the product does not comply with the contract upon delivery, if the defect manifested itself within one year after delivery. Consumers are additionally protected under Dutch mandatory law in case of a non-conforming product. If the contract does not qualify as a consumer purchase, in principle only provisions of regulatory law apply, which can be deviated from by contract.
We have extensive experience in assisting in the purchase and sale of yachts from a legal perspective and in litigating defects on behalf of shipyards and buyers. If you have questions about such transactions or need an analysis of your dispute, please feel free to contact us.
