The deed of sale is considered as being one of the most important contracts in any legal system. A special relationship is created between the vendor and the purchaser.
Another important feature of the said contract is the protection of the purchaser of which the warranty of latent defects is an important characteristic.
This obligation of the vendor is regulated under articles 1424-1432 of Chapter 16 of the Laws of Malta. The Civil Code imposes the warranty of latent defects on every vendor, whether he desires to give such a warrant or not.
In fact, in the case of ‘Portanier vs Dalli’[1] the court held that if the vendor does not warrant the things sold “Ma jeħilsux mill-obbligu legali..” The said warranty comes into effect when the thing bought and delivered is found to be affected by defects which render the thing:
The aforementioned 2 criteria are commonly known as a double standard for latent defects under article 1424 of the Civil Code. The first standard requires that the defect reduces the functionality and use of the object. On the other hand, the second criteria is more liberal since it is subjective. The seller is thus answerable for such defects towards the purchaser who may either;
Maltese law does not define what constitutes a ‘latent defect’ however from a reading of article 1424 of chapter 16 of the Laws of Malta one may derive a definition.
A defect only becomes a latent defect for legal purposes if such defect is of a grievous nature. In fact, the court in the case of ‘Scicluna vs Azzopardi’ stated “... Id-difett irid ikun ta ċerta gravita’ relattiva ġol-ħaġa mibjugħa ...” and this view was later upheld by the court in the case ‘Borg vs Patrone’ wherein the court stated that “... Il-karattru tal-gravita għandu jkun relattiv għall-prezz...” Therefore, the defect is considered to be of a grievious nature if such defect makes the thing; Unsuitable for its use, lessens its value and should the buyer had known of such defect prior to purchasing the thing he would not have purchased such thing.
Additionally, the defect must also be inherent in the thing and arises from the thing itself. Therefore, an animal which was sold in good health cannot be held to have been defective if such animal later dies through a disease which was independent from it at the time of sale.
Article 1425 of the Civil Code diminishes the responsibility of the seller for any defects which the purchaser could have discovered himself, and such defects are referred to as apparent defects. The law provides no remedy in respect of apparent defects since it is presumed that the buyer had seen such apparent defects and had accepted them as part of the sale.
Latent defects in respect of immovable property fall under the ambit of the first standard under article 1424 of Chapter 16 of the Laws of Malta where the property is unfit for the use intended. The warranty of latent defects may be excluded by an agreement entered into between the parties to the sale. This arises out of article 1426 of the Civil Code which holds that if it is stipulated in an agreement, the seller is not bound to provide such a warranty.
The exclusion of the warranty of latent defects is commonly known as the ‘natural right to regulate’ The law provides for this faculty so that the parties may regulate themselves according to their particular circumstances.
However, with the aforementioned being said, if there is an agreement between the vendor and the purchaser which excludes the warranty of latent defects, this still does not completely exclude the seller’s responsibility.
In fact, in the case of ‘Xuereb vs Attard’ the court held that such special guarantees add to and supplement the legal warranty. Therefore, the vendor is not completely freed from his responsibility and the warranty laid down under the Civil Code is still effective though in a restricted way.
In the event a purchaser finds that the thing he has bought has a latent defect he has 1 of the 3 following options: -
The aforementioned last 2 actions are provided for under article 1427 of Chapter 16 of the Laws of Malta.
The Actio Redhibitoria is the maximum protection that the law affords to the purchaser. Through this action, the purchaser is able to resort back to his exact position he was before the contract of sale, this action allows the purchaser to claim back the money paid including any damages suffered by him (also referred to as damnum emergens)
The Actio Aestimatoria establish at what lower price the purchaser would have purchased the thing.
The prescriptive period in respect of latent defects is one year in respect of immovables and 6 months in respect of moveables.
For more information or assistance related to Contracts and Property Law please contact Dr Robert Tufigno and Dr Delilah Vella.
[1] Rikors Numru 195/2017 SM