The seller is liable for actual defects that the item had when the risk passed to the buyer, regardless of whether they were aware of them or not. A defect is actual if the item lacks properties necessary for its normal use or for trade; if the item lacks properties necessary for special use for which the buyer is purchasing it, which was known or should have been known to the seller; if the item lacks properties and characteristics that were explicitly or implicitly agreed upon or prescribed; if the seller delivered an item that does not match the sample or model, unless the sample or model was shown only for information purposes (Article 459 of the Obligations Code – hereinafter: OC). However, in certain cases, the seller may limit or exclude the seller’s liability for material defects. In practice, such cases are most often the sale of old or second-hand movable and immovable property.

Regardless of the OC provisions regarding actual defects, the seller and buyer may explicitly agree that the item will be sold on an “as seen, as bought” basis.

Article 466 of the OC stipulates that the contracting parties may limit or completely exclude the seller’s liability for actual defects of the item. A contractual provision limiting or excluding liability for item defects is null and void if the defect was known to the seller but they did not inform the buyer, as well as when the seller imposed this provision by exploiting their dominant position. A buyer who has waived the right to withdraw from the contract due to item defects retains other rights regarding these defects.

This means that the “as seen, as bought” clause must be explicitly stated in the contract, as well as the buyer must voluntarily agree to it.

The seller can protect themselves with the “as seen, as bought” clause, as in such cases they are not liable for the item’s defectiveness upon delivery. The key meaning of this clause is that the buyer is not entitled to assert warranty claims for obvious or hidden defects that they would otherwise have the right to assert (in contracts where the “as seen, as bought” clause is not agreed upon).

The seller can protect themselves with the “as seen, as bought” clause, as in such cases they are not liable for the item’s defectiveness upon delivery. The key meaning of this clause is that the buyer is not entitled to assert warranty claims for obvious or hidden defects that they would otherwise have the right to assert (in contracts where the “as seen, as bought” clause is not agreed upon).

Regardless of Article 466 of the OC and the agreed exclusion of liability, this does not mean that the seller can completely absolve themselves of all responsibility for actual and legal defects of the sold item. In cases where the seller knew about a defect but did not inform the buyer beforehand, this provision does not apply and the seller is still liable for defects on the item.

In judgment case no. I Cpg 752/2020 of March 17, 2021, the Higher Court in Ljubljana ruled on a case where the sales contract specified a smaller area of the immovable property than the actual area. The buyer filed a lawsuit claiming that the smaller area of the immovable property constituted a defect for which the seller was liable. The Higher Court ruled that since the immovable property was sold on an “as seen, as bought” basis, in accordance with established case law, the seller’s liability for defects was excluded, as the seller did not know beforehand that the area of the immovable property was smaller, having relied on officially published data, and the buyer was not sufficiently careful in purchasing the immovable property.

Car dealers also often include the “as seen, as bought” clause in contracts to relieve themselves of liability for defects that can be common in used cars. In the case of selling a used car, despite the “as seen, as bought” clause in the contract, the seller may still be liable for defects on the car if the actual defect was known to the seller but they did not inform the buyer before the purchase. Case law is stricter for car dealers, as they are expected to act with the diligence of a good business manager. During the sale, the seller must inform the buyer about all defects that the vehicle has or defects that a careful seller should have known exist. Thus, even in cases where the seller did not know about a defect but should have known about it, the buyer can still assert their rights based on actual defects or non-conformity of goods.

In the above case, the buyer will be able to assert certain claims against the seller, but the buyer will be the one who must prove that the seller knew or should have known that the item had a defect, that it is a defect as defined in Article 459 of the OC, and that the seller deliberately concealed it from the buyer.

When concluding contracts with the “as seen, as bought” clause, the buyer must be especially careful, as this clause in the contract places them in a worse position than if the clause were not present.

Based on the above, the “as seen, as bought” clause means that the buyer has agreed to a complete or partial exclusion of the seller’s liability for actual defects, and even in case of defects, they will not be able to assert their rights and demand rectification of defects, as the warranty for actual defects is limited to the actual state, where the defect is hidden and the seller knew about it but concealed it from the buyer. This clause thus places the buyer in a weaker position, as not only will they not be able to assert claims regarding defects that arise, but in case of a defect, they will have to prove that the buyer knew about the defect beforehand and did not inform the buyer about it.