Significance of the Condition Grade in the Acquisition of Classic Cars – Jurisprudence on Agreements on Condition
The acquisition of historic vehicles presents unique aspects in many respects. In addition to emotional value, legal considerations also play a decisive role. The recent decision of the Federal Court of Justice (BGH, Judgment of 28.07.2025 – VIII ZR 240/24) has clarified the significance of the so-called condition grade within the framework of a purchase contract for a classic car. Below, we highlight the essential contents and implications of this judgment and provide an assessment for entrepreneurs, investors, and high-net-worth individuals.
The Condition Grade – More Than Just a Sales Argument
Background: Classification of Classic Cars
In the classic car trade, almost all market segments have established assessment methods that use a condition grade as a reference for a vehicle’s state of preservation. In Germany, the scale developed by “Motor Klassik” is often decisive; it features five levels, from “Grade 1” (flawless condition) to “Grade 5” (in need of restoration). The condition grade is not only a factor in value appraisal but is also frequently used as a sales argument.
Agreement on Condition pursuant to Section 434 BGB
The BGH ruling specifies when the agreed condition grade pursuant to Section 434 BGB becomes an agreement on condition and what consequences arise from this. If the buyer is given a clear statement about the condition—such as “Condition grade 2”—in the purchase contract or a binding offer, this statement is decisive for assessing the absence of material defects in the purchased item. This agreement fundamentally differs from mere “advertising statements” or expressions of opinion. The explicit inclusion of the condition grade in the contract signals a concrete intention of the parties to make this state the binding expectation.
Consequences under Warranty Law
Standard for Claims for Defects
If a specific condition grade is agreed upon, it defines the required quality as per Section 434 BGB. If there is a deviation to the disadvantage of the buyer—for example, if a vehicle, upon impartial inspection, only merits “Grade 3” instead of “Grade 2”—this typically constitutes a material defect. Even for older vehicles, it is not the general age-related condition but the specifically agreed assessment level that is decisive.
Rights and Obligations of the Parties
The agreement on condition in such a purchase contract creates comprehensive rights and obligations for the parties involved. In the event of a deviation, buyers can assert financial claims—such as for subsequent performance, price reduction, or withdrawal—provided that any limitation of warranty in used car sales (e.g., through an individual agreement) does not apply effectively. On the other hand, the seller is responsible for ensuring that the confirmed condition actually exists according to objective assessment standards. Stating a higher condition grade than is actually present can trigger liability, even if the seller relied on the assessment of a previous owner, an appraiser, or a third party.
Implications for Buyers and Sellers – Preventive Measures
Avoidance of Disputes through Precise Contract Design
The judgment emphasizes the necessity of using clear language in the purchase contract for classic cars. An as precise and binding description as possible of all value-determining characteristics, particularly the condition grade, provides legal certainty. Non-binding phrases or vague wording (“visually very good condition”, “grade stated in sales documents”) are insufficient to form a binding agreement on condition. References to specific inspection reports, current appraisals, or the use of standardized terminology enhance legal certainty and can help to avoid future disputes.
Significance for Commercial Trade
In commercial trade, especially on international markets, this issue gains even greater importance. Varying national assessment standards, translation issues, and discrepancies between oral and written statements require increased vigilance from all parties when concluding and performing contracts. Not least, precise documentation of all condition features as part of the contract history can play a crucial role in any subsequent dispute.
Outlook and Further Developments
With its decision, the Federal Court of Justice contributes to transparency and legal certainty in the increasingly important market for historic vehicles. The agreement of a specific condition grade thus becomes legally binding, provided the contract specifies it sufficiently. For market participants, this means careful handling of condition assessments and contract drafting remains essential to avoid legal disadvantages or litigation wherever possible.
Continuous legal developments should be monitored, as the requirements for evidence, interpretation of terms, and incorporation of international standards may evolve. Should new guidelines emerge, their impact on existing contractual relationships would also need to be carefully analyzed.
In addition to the overview presented here, further information can be found in the published judgment of the Federal Court of Justice (VIII ZR 240/24, 28.07.2025; source: www.urteile.news).
For more in-depth questions on this subject, particularly regarding contractual structuring and risk mitigation when acquiring or selling classic cars, the attorneys of MTR Legal Rechtsanwälte are gladly available as points of contact.
