The client's situation
Nicoară & Asociații represented a leading Romanian manufacturer of steel and steel products, joined as a third party under a notice of guarantee in complex commercial litigation, where the buyer claimed that the industrial products delivered had hidden defects and could not be used for the intended purpose.
The claim sought:
- repayment of the contract price of RON 571,290.44;
- payment of EUR 106,000, representing costs allegedly incurred to replace the products;
- payment of lost profit of RON 1,056,680;
- statutory interest and penalty damages.
The stakes therefore went well beyond the value of the goods delivered and carried significant financial consequences for the manufacturer.
The legal issue
The products had been manufactured in accordance with the technical characteristics and the standard requested in the purchase order and reflected in the supply contract.
The buyer later argued that they were not suitable for a special use. That use, however, required a different technical standard, which had not been indicated when the quotation was requested, when the contract was concluded, or when the manufacturing order was placed.
The central issue was whether a product's unsuitability for a special purpose — one that had never been communicated to the manufacturer and did not follow from the contractual specifications — could qualify as a hidden defect.
The legal strategy
The manufacturer's defence was built around:
- the technical specifications requested by the buyer;
- the standard expressly set out in the order and in the contract;
- the conformity documentation for the products;
- the special purpose pursued by the buyer;
- the differences between the contracted standard and the standard required for that use;
- the findings of the technical expert evidence produced in the case;
- the statutory conditions for liability for hidden defects.
We argued that the manufacturer had performed the order within the parameters communicated to it, and that the product delivered matched the contractual characteristics.
The mere fact that the product could not later be used for a special purpose did not establish a hidden defect. To engage the manufacturer's liability, it had to be proven that a defect existed that was hidden, serious and present at the time of delivery — not that there was a gap between the product ordered and the buyer's actual technical need.
The courts' decisions
The Mureș Specialised Tribunal dismissed the claim as unfounded. The court held that the products delivered complied with the standard and characteristics set out in the contract, and that the technical expert evidence did not confirm the existence of hidden defects.
The Târgu Mureș Court of Appeal upheld the decision on the merits, confirming that liability for hidden defects could not be shifted onto the manufacturer where it had produced the goods in accordance with the order received.
The opposing party filed a second appeal on points of law.
By Decision no. 61 of 18 January 2024, the High Court of Cassation and Justice dismissed that appeal as unfounded. The outcome in the manufacturer's favour became final.
The outcome
Our client was finally released from liability, and the claims brought against it were dismissed.
The result shielded the manufacturer from financial obligations exceeding RON 1.6 million and EUR 106,000, to which the opposing party had sought to add interest and penalty damages.
The case confirms how important it is to define precisely the technical specifications, the applicable standard and the intended use of the product at the contracting stage. In disputes over alleged hidden defects, the distinction between a non-conforming product and a correctly manufactured product ordered for a purpose other than the one actually pursued is decisive.