The aim of this article is to analyse the Spanish Supreme Court judgment 167/2020 of 11th March resolving a conflict regarding the decision concerning the purchase of a diesel motor vehicle, that incorporated software which manipulated the data relative to the contaminant emissions, since it disabled NOx emissions (combination of nitric acid and nitrogen dioxide).
The affected buyer filed a nullity action on a purchase against the company that sold the vehicle and also against the manufacturer, alleging defect of consent, or resolution for contractual non-fulfilment with compensation for damages; and collaterally, the moral damage derived from the deception regarding the characteristics of the vehicle which had been offered and the consequent need to eliminate this software.
The most interesting matter settled in this judgment is the study of the efficiency of the principle of the relativity of contracts as contained in article 1257 of the Spanish Civil Code: “contracts are only effective between the parties who execute them and their heirs”. According to this principle, the contract, with regard to third parties is “res inter alios acta” (a thing done between others) and therefore, they are not affected.
This principle has been altered with the passing of time and the evolution of legal and financial traffic, especially with the introduction of mass contracts, in which the suitability of the product to the description with which it is marketed and advertised becomes very important.
Just as in other sectors, such as construction, the Supreme Court understands that there are particularities which justify the exception to this principle of relativity in the automobile market, such as the importance of the manufacturer’s brand, customer loyalty to such brands, bulk buying, etc.
It is established that in the vehicle sales chain the subjects that appear under the figure of the buyer and the manufacturer are especially important, since the dealer or seller of the product are mere means of distribution, although legally they do create relevant and separate links.
The high court considers that in the manufacturer-buyer relationship legal ties are established (even though a direct contract does not exist) such as, the obligation to guarantee the reality of the features offered in the advertising of the product, which is normally carried out by the manufacturer itself, and that are included as an element of the contract between the seller (not the manufacturer) and the final buyer. In this way, due to these characteristics both the seller and the manufacturer, who placed the product in the market and advertised it, are answerable.
Another reason which justifies this responsibility is the need to provide a solution to the problem which would pose itself for the buyer if the seller had acted in good faith and was not aware of these engine defects, or likewise if the seller was insolvent: the buyer would not be adequately compensated for the damage suffered and would be left unprotected.
Thus it is understood that the manufacturer is responsible before the buyer for the bought product to meet the specifications, as advertised; which is a joint responsibility with the seller, without prejudice to any legal actions which may be brought between them.
Furthermore, the high court understands that the manufacturer is responsible regardless of whether it manufactured all of the parts of the vehicle, or some parts were manufactured by, for example, other companies forming the same group of companies. All this, of course, is without prejudice to the fact that the manufacturer may subsequently turn to this supplier to claim the compensation it has had to pay.
Jaime Madero
Vilá Abogados
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17th April 2020
