Compensation for a defect in a service
Compensation for a defect in a service can take the form of rectifying the defect and redoing the work, a price reduction or cancellation of the contract.
The service provider is primarily liable for a defect in a service, and you should report the defect to them. You can also address your claim to a subcontractor whose work is defective. For example, a subcontractor carries the same liability for the work they perform as the company from which you ordered the work.
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The customer has the right to withhold payment for the service, or a part of it, until the defect has been rectified or some other compensation has been offered.
The amount you withhold should be roughly equivalent to the significance of the defect, for example its repair costs. You can only withhold the full payment if the defect is so significant that it could give you the right to cancel the contract. If you withhold the entire purchase price completely because of a minor defect, you may have to pay overdue interest and recovery costs.
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The customer has the right to demand that the company rectifies the defect or redoes the defective work. The rectification of the defect must not result in costs for the consumer, including freight or spare part costs.
The company has the right to rectify the defect if this is possible within a reasonable time. If the company is unable to rectify the defect quickly enough, the customer can ask another company to carry out the repairs and invoice the costs to the vendor company. For example, this is
- possible when
- the company’s professional skills are inadequate.
- rectifying the defect cannot be postponed.
- the service provider cannot be reached.
The company has the right to refuse to rectify the defect and offer a price reduction instead if rectifying the defect would result in unreasonable costs or inconvenience. This may be possible when the defect is minor but its repair costs are expected to be significant.
The consumer also has the right to receive compensation for any losses caused by the defect.
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If rectifying the defect or redoing the work is not possible, or the company does not rectify the defect within a reasonable time, the customer may demand a price reduction.
A price reduction may also be possible for example when
- the significance of the defect for the buyer is minor considering the service as a whole, for example a surface defect.
- rectifying the defect would result in unreasonable costs considering the value of the service.
The price reduction must correspond to the value of the defect.
For example, the price reduction may correspond to the repair costs or the reduction in the value of the service compared to the general price level.
The price reduction can only be offered in form of a gift voucher if the consumer agrees to this. If the defect cannot be compensated for by a price reduction, cancelling the contract is often the last resort.
The consumer also has the right to receive compensation for any losses caused by the defect.
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The consumer may demand that the contract is cancelled if the defect is not minor and sufficient compensation for it cannot be offered by other means, including a price reduction.
If you wish to cancel the contract before the work is finished, the work performance must be clearly incompetent. For example, the work is so defective and unskilled that, even when completed, its outcome can be expected to have serious defects. You must pay for any non-defective work to the extent that you can benefit from it.
If you wish to cancel the contract after the work has been completed, its end result must be so defective that the work will be of no use. If you cancel the contract after the work has been completed
- while you do not normally have to pay the agreed price, in some situations you may have to pay for parts which cannot be returned but which are to some extent useful to you.
- the company has the right to reclaim any materials that can be returned. Any attached materials need not be returned if detaching them would cause serious inconvenience.
Complaints and resolving disputes
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If there is a problem with the service, you should always contact the service provider. If you delay reporting the problem, you may lose the right to make any demands.
Often the problem can be resolved when you notify the service provider as soon as possible.
If the service provider does not react as you would like, submit a written complaint to the service provider with a detailed description of the problem and a list of your demands.
Justify your demands and provide evidence to support your claim, if possible. For example, photographs, documents, e-mail correspondence, and other evidence (such as fault diagnoses) may help.
You can use our Complaint Assistant to file a complaint. The Complaint Assistant also provides information about your rights and helps you assess what kind of demands you can make.
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If the opposing party is willing to resolve the issue, try to find a satisfactory solution through negotiation.
Consider carefully whether you can accept the service provider’s proposal. Often there is not just one right solution. However, reconciliation is usually a better and more economical solution than a prolonged dispute.
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If the complaint and the negotiation procedure do not lead to an amicable solution, you can contact the Consumer Advisory Services for instructions.
The processing of your case usually requires information about the opposing party’s view.