Procurement Glossary
Notification of defects: definition, procedure and legal significance in Procurement
November 19, 2025
The notice of defects is a central legal instrument in the procurement system, which buyers use to inform suppliers of quality defects or breaches of contract. It serves to assert warranty claims in a timely manner and protects against loss of rights. Find out below what a notice of defects is, which procedures to use and how to minimize legal risks.
Key Facts
- Legal notification of identified defects to suppliers or service providers
- Immediate complaint required to safeguard warranty claims
- Written documentation recommended for preservation of evidence
- Basis for subsequent performance, reduction or compensation
- Limitation periods only begin to run after proper notification of defects
Contents
Definition: Notice of defects
A notice of defects is the formal notification by the buyer to the seller of defects found in goods delivered or services rendered.
Legal basis and characteristics
The notice of defects is based on the provisions of the German Civil Code (BGB) and the German Commercial Code (HGB). It comprises the following core elements:
- Concrete description of the defects found
- Time of discovery and notification
- Request for subsequent performance or other remedial measures
- Setting a deadline for the rectification of defects
Notice of defects vs. complaint
While a complaint is often used colloquially, a notice of defects has a precise legal definition. It differs from a simple complaint in terms of its formal requirements and legal consequences.
Importance of notification of defects in Procurement
In professional procurement, proper notification of defects secures warranty claims and enables quality standards to be enforced. It is an integral part of claim management and supplier management.
Methods and procedures
The systematic handling of complaints requires structured processes and clear responsibilities.
Testing and documentation
The basis of every notification of defects is a careful incoming goods inspection. Deliveries are checked against acceptance criteria and specifications. Any deviations found must be documented in detail:
- Photographic preservation of evidence
- Measurement protocol for quantitative defects
- Witness statements on delivery
Formal complaint procedures
The notification of defects is made in writing, providing all relevant details. A structured approval workflow ensures that all legal requirements are met. Communication should be clear and timely.
Escalation and follow-up
Escalation levels are defined if the supplier's response is inadequate. This includes the involvement of the legal department and, if necessary, external advice. Systematic tracking ensures that deadlines and dates are met.
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Important KPIs for notification of defects
Specific key figures are used to measure and control defect notification processes.
Quantitative performance indicators
Key performance indicators include the number of complaints per supplier and time period, the average processing time and the success rate in enforcing claims. These metrics make it possible to evaluate process efficiency:
- Complaint rate per 1,000 deliveries
- Average response time of suppliers
- Success rate for claims for subsequent performance
Qualitative evaluation criteria
In addition to quantitative metrics, qualitative aspects must also be evaluated. The completeness of documentation, the legal certainty of complaint procedures and the satisfaction of internal customers play an important role. Systematic benchmarking enables comparisons with best practices.
Preventive indicators
Early indicators such as the development of supplier quality or trends in certain material groups enable proactive measures to be taken. The analysis of defect patterns supports the continuous improvement of procurement processes.
Risks, dependencies and countermeasures
Inadequate complaint processes can lead to considerable legal and economic risks.
Legal risks and statute of limitations
Missed or incomplete notifications of defects lead to the loss of warranty claims. The limitation periods start to run anew if the defect is properly notified. Companies risk considerable financial losses if defects are not reported on time. A clear purchasing guideline defines responsibilities and processes.
Supplier relationships and escalation
Frequent or unjustified complaints can put a strain on supplier relationships. A balanced approach between legal protection and partnership-based cooperation is required. Escalation procedures should be graduated and proportionate.
Operational dependencies
The effectiveness of complaints depends on the quality of the incoming goods inspection. Inadequate inspection processes or a lack of competence can lead to overlooked defects. Regular training and clear competence matrices minimize these risks.
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Practical example
An automotive supplier receives a delivery of 10,000 screws in which the incoming goods inspection identifies deviations in the surface coating. The quality assurance department documents the defects photographically and creates an inspection report. A written notification of defects is sent to the supplier within 24 hours, containing a detailed description of the defects, a deadline for subsequent delivery and a reference to the terms of the contract. The supplier responds immediately with a subsequent delivery and cause analysis.
- Immediate blocking of the defective goods
- Documentation with photos and measurement report
- Timely written notice of defects
- Follow-up until complete rectification
Current developments and effects
Digitalization and stricter compliance requirements are shaping the development of modern defect notification processes.
Digital documentation and AI support
Modern procurement systems integrate automated inspection processes and digital documentation. AI in Procurement enables the automatic detection of quality deviations and the generation of standardized complaints. Machine learning algorithms analyze patterns and support risk assessment.
Stricter supply chain laws
The Supply Chain Act increases the requirements for the documentation of defects and their rectification. Companies must be able to prove that they have responded appropriately to quality problems. This increases the importance of systematic defect notification processes.
Preventive quality assurance
The trend is moving from reactive notification of defects to preventative quality assurance. Supplier evaluations and continuous monitoring of delivery capability reduce the need for downstream complaint procedures.
Conclusion
Notification of defects is an indispensable tool for safeguarding warranty claims in procurement. Systematic processes, digital support and clear responsibilities ensure legally compliant processing. Companies should combine preventative quality assurance with effective complaint procedures in order to minimize legal risks and maintain supplier relationships.
FAQ
What is the difference between a notice of defects and a complaint?
A notice of defects is the legally correct term for the formal notification of identified defects. It has precise legal requirements and consequences. A complaint is colloquial and legally unspecific. A notice of defects preserves warranty claims, whereas a simple complaint does not guarantee this.
What deadlines apply to the notification of defects?
Defects must be reported immediately upon discovery. In the case of obvious defects, this applies immediately upon delivery, in the case of hidden defects after their discovery. In commercial transactions, the inspection and notification period is generally a few days. Missed deadlines lead to the loss of warranty claims.
Does a complaint have to be made in writing?
No written form is legally required, but it is strongly recommended. The written notice of defects serves to preserve evidence and documents the time of the complaint. In practice, all notices of defects should be made in writing and contain a detailed description of the defect and a deadline.
What rights arise from a proper notice of defects?
A proper notice of defects justifies claims for subsequent performance, reduction, withdrawal or compensation. The buyer may initially demand subsequent performance. If subsequent performance is unsuccessful, further rights are available. The limitation periods shall begin to run anew in the event of a proper complaint.
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