Liability limitation and Consumer Protection in the Czech Republic and Germany

27. 3. 2023

Waiver of liability are a popular contractual instrument not only in Germany, in order to be able to declare a transaction economically reasonable in a risk-cost analysis.

The Czech Civil Code also allows limitation of liability for damages. However, the principle of protecting the weaker party must always be considered under Czech law - the weaker party can also be an entrepreneur.

Furthermore, a distinction must be made between the limitation of liability for damages and the warranty rights for defects. The consumer's rights arising from a warranty for defects can never be limited by contract.

Liability for damages - whether in contract or tort (statutory) - can never be effectively limited in the case of intent or gross negligence, nor can liability for personal injury. It should be noted that under Czech law - unlike under German law - accountability is not required for contractual liability for damages – not even negligence.

A contractual limitation of liability is therefore very advisable. Disclaimer clauses require verifiable contractual agreement, and legal advice should be sought to ensure their effectiveness.

Indeed, their effectiveness can be challenged, especially if such disclaimers are agreed in the context of General Terms and Conditions (GT&C). If the other party is a consumer, stricter rules apply in both Germany and the Czech Republic that prohibit unreasonable disadvantages for the consumer.

Currently, for example, the validity of a GT&C clause is being questioned, which assigns all claims, including future claims for damages against the producer - in this case Mercedes-Benz - of the borrower to the lender affiliated with the producer in the context of a car loan agreement, thus making compensation for damages against the producer impossible across the board. The reason for this: Unreasonable disadvantage to the consumer.

Such or similar clauses are not uncommon and the rulings on such model clauses are increasing, which is especially the case in the Czech Republic. Only since 2014 with the new Civil Code a comprehensive new regulation of the law on damages was implemented and therefore fundamental court decisions are issued comparatively often.

We will be happy to assist you in reviewing your General Terms and Conditions or draft a new one for you that is in line with current law and judicial decisions.

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