Defects in Goods or Property

The issues

When are goods or property deemed to be defective?
If a purchased item is defective, what can be done to put things right?
Does the notification of the defect before the sale absolve the seller from having to make a refund?
Under what circumstances can a buyer of goods which are defective or which fail to fulfil their function return the goods and get his money back? And when can the seller offer to repair the goods and keep the purchase price?

The Jewish Perspective

A. If a building contractor sells a new home and the buyer finds that it was not built to the agreed specifications, or if doors, furnishings or other installations were defective, the contractor must replace or fix the defects within a short period of time. Regardless of the cost of compliance with the original specifications, the buyer cannot seek to back out of the agreement if the contractor is willing to make the necessary repairs.

However if, notwithstanding the remedying of these defects, the value of the home would still decrease, or the scale of the repairs would convey the impression that the home was not new but second-hand, the buyer is excused from having to complete the sale. A Beth Din making this determination would have to familiarise itself with relevant construction practice before making a ruling.

B. Where a person orders an item from a shop, specifies that he must have it by a certain time and relies on the shop to delivering it by that time, if for any reason the delivery is delayed and the buyer does not receive the item on time and no longer has any use for it, the sale may be avoided by the customer even if the shop was not negligent or at fault in any way. If the customer has paid for the item in advance, he is entitled to receive a refund.

However, where the buyer does not specify at the time of the purchase that he needs that item by a certain time, even if he does subsequently request delivery by a specific time, and delivery is delayed, the sale may only be set aside if the buyer can prove that the delay was due to the fault of the shop.

C. If a person buys an item that is subsequently found to be defective, he may ask for a non-defective replacement or may return the item and ask for a refund. However, he has no right to demand that shop allow him to keep the item but discount the price on account of the defect (unless the shop agrees to this). If he insists on keeping such an item, the shop is entitled to obtain payment in full.

Unless it was clearly stipulated at the time of the sale that there would be no cash refunds even for defective goods, the shop has no right under Jewish law to stop the buyer avoiding the sale and receiving a full refund. The shop may not insist that the customer accept a non-defective item or offer to exchange it for other goods on sale there.