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refers not only to the inherent specifications of the sold good, but also
to any material (any adverse quality decreasing or abrogating the value
or convenience of the sold good in comparison with the goods of the
same type), financial (e.g. past year financial statements of the target
company) or legal relationship (e.g. lack of requisite permits for the
site of operations of the target company) which may be considered to
effect its value. Such declarations may either state that the good pos-
sesses a certain quality (affirmative promise) or it lacks certain quali-
ties (adverse promise). Furthermore, even though the seller does not
explicitly promise and assure any quality, if an agreement presumes the
existence of certain qualities and the seller, by signing the agreement
without any reservations, shall be deemed to have implicitly warranted
such qualities.
Warranty from Expected Qualities
Although the seller does not explicitly promise that the sold good
possesses a certain quality or lacks deficiencies, the sold good shall
possess the qualities necessary for the expected purpose of its sale. The
seller shall be responsible from such necessary qualities even if it is not
aware of such deficiencies or it has not mentioned or promised such
qualities. Certain conditions must be met in order for the obligation of
warranty to arise:
• There Must Be a Deficiency, Which Decreases or Abolishes the
Value or Fitness of the Goods for Particular Purpose.
The purpose of allocation and usage of the goods may be deter-
mined as the purpose explicitly or implicitly agreed jointly upon by the
parties. Failing such agreement of the parties, the purpose of allocation
and usage of the goods shall be determined by taking into consideration
the established practice at the place of sale, the particularities of the sit-
uation, terms and conditions of the agreement and similar aspects.
Deficiencies of such qualities may result in material, economic or legal
defects, as explained above while assessing the quality of the goods.
• The lacking of such quality must materially decrease or com-
pletely abolish the value or the fitness of the sold goods.
A material defect shall mean a defect, which would have resulted
in the non-execution of an agreement or the decrease of its price if it
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