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Good to know Price reduction – when and how to claim statutory warranty?

Price reduction – when and how to claim statutory warranty?

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​​Price reduction – statutory warranty and the method of determining the proportion underlying the price reduction

This text will be useful to buyers if an item they have bought does not conform to the contract and a faulty goods complaint becomes necessary. The seller then becomes liable to the buyer under the statutory warranty for physical and legal faults (including the so-called consumer statutory warranty). The buyer may be either a business or a consumer, but their rights differ (e.g. the freedom of contract is greater in B2B dealings).

Seller’s liability under statutory warranty

A supply of a faulty item to a buyer may trigger the seller’s liability. The basic protection tool in such a case is the statutory warranty (Article 556 et seq. of the Polish Civil Code (“CC”) and Article 43a et seq. of the Polish Consumer Rights Act (“CRA”). The buyer has the right to claim repair, replacement, price reduction, or may withdraw from the contract. 

Where the fault is not significant (e.g. significant enough to withdraw from the contract) but not too insignificant to be ignored, it is useful to submit a request for a price reduction. Such a request modifies the price agreed by the parties. The way to submit it follows two steps. First, you need to identify the value of the sold item with and without the faults (e.g. 80 and 100 zloty). Second, the contract price has to be adjusted for the percentage proportion making up the difference (e.g. the contract price of 80 zloty should be reduced by 20% which is 16 zloty). This follows from Article 560(3) CC and Article 43e(2) CRA. (known as the proportion method).

Cost estimation method within the framework of statutory warranty

The problem arises in identifying the item’s value with and without faults (in the first step). Case law varies on this matter. The first interpretation appeared in the Supreme Court’s resolution issued by a panel of 7 judges back on 30 December 1988 (III CZP 48/88) saying that “the reduction of a product price should account for the expenditures and efforts necessary to make, by removing the faults, the item fit for the intended purpose”. This is known as the cost estimation method. 

Comparison method

The amount of price reduction equals the value of anticipated expenditures and efforts which the buyer himself would have to make to bring the item in line with the contract (fault-free). The case law has developed also a different interpretation saying that it is necessary to identify the market value of a fault-free item and the market value of a faulty item. No expenditures and efforts to make the item fit for purpose should be considered in such estimation. This is known as the comparison method. Against this contentious background, the case law has developed numerous “in-between” approaches (e.g. income method), which only demonstrates that the valuation of faults is exceptionally disputable and inconsistent. 

Whichever approach you choose, it will have profound implications. The burden of proof of the proportion underlying the price reduction rests with the buyer (Article 6 CC). If the buyer cannot demonstrate or has not demonstrated in a given case (e.g. by using a wrong valuation method to prove his claim for a partial refund) how the value of a fault-free item stands in relation to the value calculated in consideration of the faults, he cannot claim the price reduction. The buyer should then seek other remedies (e.g. repair, replacement, or withdrawal from contract). Legal scholars have criticised that approach too, but have not put forward any alternatives. Should the buyer in some cases claim damages for improper contract performance instead of price reduction?

Each of the above-mentioned methods has its own pros and cons. The comparison method proves difficult in respect of unique (e.g. customised) items. There is often no market for “faulty” goods (e.g. a historical building with a defective facade). In the cost estimation method, costs of repair will often exceed the value of the item itself so that a straightforward application of the cost estimation could contradict the facts and the purpose of the price reduction. This method proves problematic also whenever a fault cannot be repaired, in which case the expenditures cannot be estimated. 

Product’s non-conformity with the contract

Further doubts arise when we dive into details. The law does not clarify when the valuation should be made – whether on the date a fault is ascertained or the contract date or the delivery date of a faulty item? Should, therefore, the depreciation of the sold item be accounted for (e.g. impairment over the process duration)? Should we consider taxes (e.g. VAT) or net costs? If we go for the cost estimation method, the question arises about which expenditures should be taken into account – potential ones necessary to remove the fault (e.g. replacement of a part of the item or repair) or the actual expenditures which the buyer has incurred to remove the fault on his own (e.g. due to an emergency situation). Should the follow-up costs and losses be included (e.g. when a faulty item damages other items – also known as caustic damage)?

Request for price reduction in the framework of statutory warranty

All these aspects make lawyer’s assistance necessary in pursuit of the claim for price reduction (even before the litigation). The discrepancies in the case law entail the risk that the buyer may exercise the right to reduce the price ineffectively and fail to reach the desired effect. This is because all these complicated intricacies and counterintuitive aspects have to be accommodated. ​

FAQ


What is the claim for price reduction under statutory warranty?

If a sold item does not conform to the contract, the buyer generally has four claims under the statutory warranty: repair, replacement, request for reduction of contract price, withdrawal from contract. The price reduction is available also if a real property has faults (in which case the price reduction takes account of the value of the faulty property). Some rights under the statutory warranty may be combined e.g. when a buyer demands repair of the sold item, but despite the repair (within reasonable time), its value is still below the new item's value. The contract remains in force in all other aspects (apart from the reduced price). 

What are the requirements for price reduction under the statutory warranty?

The basic requirement underlying the right to reduce the price is the sold item’s non-conformity with the contract (physical and legal faults). An item is faulty e.g. when it does not have the features which the buyer has advertised or is unfit for the purpose defined in the contract or has been delivered incomplete. The price does not have to be paid yet. The fault does not have to be significant either. The liability is excluded if the buyer knew about the product’s non-conformity with the contract. If the buyer is a consumer, he must communicate his acceptance of the fault explicitly. The liability towards the buyer generally arises at the time the item is delivered to the buyer and the fault exists on the delivery date. A consumer – unlike a business operator – does not have to report a fault to the seller immediately. The fault does not need to follow from circumstances attributable to the seller. Be mindful also of the deadlines for exercising the rights.

When is the price reduction in the framework of statutory warranty available?

As a rule, the buyer should first ask for repair or replacement. However, if the seller fails to supply a fault-free item or remove the fault, the contract price may be reduced or the buyer may withdraw from the contract. 

Can the price be reduced under the statutory warranty only if the faults are concealed?

No. The seller is liable for both conspicuous and concealed faults. The same holds true for the right to reduce the contract price in the case of non-conformity with the contract. Be careful, however, because the seller may accuse the buyer of having known about the faults or having accepted the faults separately if they are conspicuous (this does not apply to mail order sale). 

What are the buyer’s rights when it comes to price reduction?

Price reduction is exercised by means of the consumer’s unilateral statement and forces the seller to refund the price difference without delay. At the same time, the buyer has the right to demand refund of due amounts. If the price has not been paid, the buyer has to pay a lower price. The seller must not ignore the consumer’s demand and must respond to the complaint within 14 days. 

What documents are required to reduce the price?

The Civil Code sets no special requirements as to the form of the request for price reduction (e.g. it may be made by phone). However, for evidence purposes, at least the written form is recommended. There is no need for valuation by e.g. an appraiser. However, extra care is needed in drafting the request for price reduction.

Can a seller refuse to reduce the price under the statutory warranty?

The seller may challenge the request, except in the above-mentioned case in which the seller replaces the faulty item or repairs the fault without delay and excessive inconvenience to the buyer. This restriction does not apply if the seller has already replaced or repaired the faulty item before or the seller has failed to replace it or repair the fault. In the consumer regime, the right to the price reduction is subject to limitations described in Article 43e CRA. As a rule, a consumer must first demand replacement or repair, and only later may seek price reduction. 

Does a price reduction affect the contractual warranty?

As a rule, the right to price reduction is independent of the contractual warranty. If a non-conformity with the contract is removed in this procedure, there will be no grounds for liability under the contractual warranty (no liability towards the buyer for characteristics defined in the contractual warranty). A contractual warranty may also provide for the right to price reduction, albeit on different terms and grounds. The interdependencies between the statutory warranty and the contractual warranty tend to be problematic and require consultations with a lawyer (e.g. when a repair is first made in the contractual warranty procedure, and then a price reduction request is submitted on the basis of the statutory warranty). 

Author: dr Kamil Wielgus, lawyer in RÖDL’s litigation team. He specialises in civil and commercial law. 
17 December 2025

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