Manufacturer in Insolvency: Who Is Liable to the Customer?
Warranty, manufacturer's guarantee and recourse – what dealers and installers should know about a manufacturer's insolvency
According to media reports, a German manufacturer of battery storage systems filed for insolvency on 22 October 2026; business operations are said to continue for the time being. For dealers and installation businesses this raises a question that recurs with every manufacturer insolvency: who is liable to the end customer for defects – and what can be recovered?
Warranty remains with the seller
Statutory liability for defects (Gewährleistung) falls on the customer's contractual counterparty, that is the dealer or installer – not the manufacturer. The manufacturer's insolvency does not change this. The customer can still demand subsequent performance (Nacherfüllung); the seller bears the costs (§ 439 para. 2 BGB), and for items that have been installed also the costs of removal and re-installation (§ 439 para. 3 BGB).
In a sale, claims generally become time-barred two years after delivery; for items that are customarily used for a building and have caused its defectiveness, after five years (§ 438 para. 1 nos. 2 and 3 BGB). Under a contract for work (Werkvertrag), the period begins with acceptance (Abnahme); it is in principle two years, and five years for buildings (§ 634a BGB). Whether delivery with installation is a sale or a contract for work, and whether a system forms part of a building, is often disputed in the individual case. New for consumer sales from 31 July 2026: if the customer chooses repair, the limitation period is extended once by twelve months; the dealer must point this out before subsequent performance (§ 475 para. 4, § 475e para. 5 BGB).
Manufacturer's guarantee and software updates
The manufacturer's guarantee is a voluntary promise alongside the statutory warranty (§ 443 BGB). Claims under it lie solely against the manufacturer. The dealer is not liable for it as long as the dealer has not assumed the guarantee personally.
The position is different for connected devices: anyone who sells goods with digital elements to consumers also owes the necessary software updates (§ 475b para. 4 BGB). If the manufacturer discontinues updates, this can give rise to a defect for which the dealer is responsible.
Recourse: it depends on your own supplier
The seller of a newly manufactured item can demand reimbursement from the seller's supplier of the expenses the seller had to bear towards the customer – also in the case of missing updates (§ 445a para. 1 BGB). The claim becomes time-barred at the earliest two months after the dealer has satisfied the customer's claims (§ 445b para. 2 BGB). Those who sourced through wholesale have recourse against the wholesaler. For installers under a contract for work, according to the wording these special rules do not readily apply; their claims may become time-barred earlier than those of their customers.
Only those who bought directly from the insolvent manufacturer are usually referred to a dividend: claims under previously concluded contracts are insolvency claims (Insolvenzforderungen) (§ 38 InsO), even if the defect only appears later. They are lodged after the opening of proceedings with the insolvency administrator, and in debtor-in-possession proceedings (Eigenverwaltung) with the custodian (Sachwalter) (§ 174, § 270f para. 2 InsO). Set-off against one's own outstanding invoices remains possible if the set-off position existed at the opening of proceedings (§ 94 InsO); set-off positions created during the crisis can be challenged (§ 96 para. 1 no. 3 InsO).
Practical checklist
Record warranty cases and deadlines
Keep the statutory warranty and the manufacturer's guarantee separate vis-à-vis customers
Clarify the supply chain: wholesale or direct purchase
Notify defects to the supplier without undue delay (§ 377 HGB)
Lodge claims on time and consider set-off
Secure the supply of spare parts, service and software
Conclusion
The manufacturer's insolvency does not relieve the dealer. How valuable the dealer's recourse is depends on the supply chain. Please contact us if you have any questions.
As of: 23.10.2026
NIETZER Rechtsanwälte · Attorneys at Law (USA) · Heilbronn · www.unternehmensrecht.com
This article is for general information purposes only and does not replace legal advice in an individual case.
