Product Liability and Warranty Litigation in Croatia

In Croatian law, the sphere of product liability claims and its variations falls under various regulations prescribed by the Croatian Obligations Act.

As a principal source, the Obligations Act lays down the provisions governing the “defective product liability” legal concept. It is a specific type of non-contractual liability for damage caused by the manufacturer of a defective product in which the responsibility of the producer is strict, regardless of fault. The injured party, i.e., the claimant must prove the defect of the product, that the damage occurred and that causal link exists between the defect and the damage.

Secondly, claimants may rely on the rules governing liability for the “material non‑conformity of goods” in legal transactions. These rules establish a separate type of contractual liability: liability for defects in performance, on the part of the seller for any material non‑conformity of the item (i.e., factual defects of the goods) in onerous legal transactions. This liability applies to defects that existed at the time the risk was transferred to the buyer, regardless of whether the buyer was aware of them, as well as to defects that manifest after the transfer of risk if they result from a cause that existed beforehand.

Another form of contractual warranty is a commercial warranty, which is a type of upgrade of liability for material non-conformity of the purchased item. According to it, the seller and the manufacturer may be liable if the sold item does not meet the specifications or other requirements specified in the warranty statement or in the relevant advertising material. Liability on this basis does not exclude liability for material non-conformity.

As it is the closest to the subject matter of this guide, the aforementioned legal concepts will be analyzed in greater detail in the table below.

Liability may also be based on general non‑contractual (tort) liability, which requires proof of fault, typically negligence or intent. Additionally, liability may arise from damage caused by a dangerous thing or dangerous activity, where liability is imposed regardless of fault, and the court assesses in each case whether the thing or activity that caused the damage truly presents an increased danger to the environment.

It is important to note that these bases of liability are independent and do not exclude one another. In some situations, a claimant may rely on several legal grounds at the same time in order to seek compensation for damage caused by a defective product. Although the legal bases differ, the objective remains the same - securing compensation for the injured party - and the common prerequisite for liability is the existence of a specific defect in the product.

Pursuant to the legal framework on defective product liability, the product is defined as any movable thing, as well as when it is incorporated in another movable or immovable thing. Electric energy and other forms of energy are also considered to be products. If there is doubt as to whether something is a movable or immovable object, it is considered movable.

Intangible products, e.g. software, were not explicitly included in the product definition, which will change with the implementation of the new EU Defective Product Liability Directive 2024/2853.The Croatian law does not make a descriptive distinction between consumer and business products in terms of their definition. 

According to the statutory regime of defective product liability, any individual who has sustained damage as a result of a defective product is entitled to pursue a claim. Claims can also be pursued on behalf of deceased individuals.

Claims arising under contractual provisions can generally be asserted by the original contracting party or their legal successors, including heirs.

In the context of defective product liability rules, compensation is provided for material damage caused by death or physical injury and for the damage caused by destroying or damaging the injured party's thing, different from the defective product, if the nature of the product is such that it is generally intended for personal use and if the injured party mainly used this thing for that purpose. This means that the claimant is not entitled to compensation for (material) damage caused by the damage or destruction of the defective product (damnum quoad rem), but only to consequential - reflex damage (damnum extra rem). This limitation is justified by the position that liability for the defective product is not provided for the purpose of establishing impaired equivalence of performance, but for compensation for damage to other legally protected goods of the injured party. 

Regarding the amount of compensation for damage caused by the destruction or damage of things, a deductible franchise of EUR 500 applies. 

Compensation for non-material damage caused by a defective product may only be requested in accordance with the general rules concerning liability for damage.  

In light of defective‑product‑liability legislation, a product is considered defective if it does not provide the level of safety that can reasonably be expected from such a product, taking into account all the circumstances. The circumstances that are especially taken into account include the manner in which the product is presented, the purposes for which it can reasonably be used, and the time when it is placed on the market. It has been established that four types of defects may be distinguished: (1) design defects, manifested in the incorrect conception and/or design of the product; (2) manufacturing defects - an error occurring in the production process despite a proper conception and/or design; (3) defects arising from insufficient scientific or technological development in the production of a new product; and (4) defects resulting from a failure to provide adequate information (i.e., a product placed on the market without appropriate instructions).

The reason for a product’s defectiveness cannot be the subsequent placing of an improved product on the market (this prevents the potential abuse of this concept).

Given that this is a form of strict (objective) liability, the rule on the burden of proof is particularly important. In cases of strict liability, the claimant is typically not required to prove fault but must establish the causal link and the damage suffered. Accordingly, in cases of liability for a defective product, the claimant must prove the defect, the damage, and the causal connection between the defective product and that damage.

Under the rules on defective-product liability, the claimant bears the burden of proof. As noted above, the claimant must prove the existence of a defect, the damage suffered, and the causal link between the two.

The shift of the burden of proof is not separately regulated by the relevant provisions; however, based on an interpretative reading of the rules prohibiting the contractual exclusion or limitation of the manufacturer’s liability, such a provision would not be enforceable.

Under the rules on defective‑product liability, the court applies an objective standard in determining whether the product provides the level of safety that can reasonably be expected of it.

In assessing whether a product is defective, courts rely on the objective standard of safety that consumers are entitled to expect. A central part of this assessment is the product’s compliance with applicable safety regulations and technical standards.

Within the scope of defective‑product‑liability law, the primary responsibility falls on the producer. 

A producer is considered to be any person who has manufactured a finished product, produced a raw material, or supplied an essential or non‑essential component incorporated into a finished product, as well as any person presenting themselves as a producer by designating the product with their name, trademark, or any other distinguishing mark.

In the case of the importation of a product, the person who imported it for the purpose of sale, lease or any other form of placing it on the market is considered to be a producer and is jointly and severally liable with the persons mentioned in the previous paragraph.

If the producer cannot be identified, any person who has placed the product on the market shall be considered a producer. That person may be exempted from liability if they notify the injured party, within a reasonable time, of the person from whom they acquired the product.

In the context of contractual relationships, the seller is liable for the material non‑conformity of an item. In specific situations within a supply chain, a seller against whom the buyer has exercised rights arising from liability for a material defect is entitled to seek recourse against their own seller (the previous seller).

Having regard to defective‑product‑liability requirements, if more than one person is responsible, their responsibility is joint and several, meaning that the claimant may recover damages from any of the liable parties.

Under the provisions on defective product liability, the producer may be exempted from liability if he proves that:

• he did not place the product on the market;
• based on the circumstances, it is probable that neither a defect nor its cause existed at the time the product was placed on the market;
• the product was not produced neither for sale, lease, or any other business purpose, nor was it produced or placed on the market within the producer’s operations;
• the defect results from compliance with the mandatory rules that were in effect at the time the product was placed on the market;
• the development stage of science or technical knowledge at the time the product was placed on the market did not allow for the detection of defects;
• the damage was caused exclusively by the action of the injured party or a person for whom that party is liable, or by the action of a third party which could not have been foreseen by the producer or the consequences of which could not have been avoided or eliminated.

Partial exoneration from liability is possible if the injured party, or a person for whom that party is liable, has partially contributed to the occurrence of damage.

In the case of contractual liability on the basis of a material non-conformity, the seller can be exempt by proving that the item did not have a material non-conformity at the time of the transfer of risk to the buyer. Conversely, the seller is not liable if, at the time of entering into the contract, the buyer was aware of the material non-conformities or could not have been unaware of them. It is considered that the buyer could not have been unaware of a material non-conformity that a prudent and diligent person, having the average knowledge and experience characteristic of a person of the same occupation and profession as the buyer, could easily have noticed during a usual examination of the item. The foregoing does not apply to consumer contracts.

In addition to the above, under defective‑product‑liability legislation, the producer’s liability cannot be contractually limited or excluded in advance. Any contractual provision to the contrary is null and void.

In line with the principle of freedom of contract and the dispositive nature of the provisions of the Obligations Act, in cases of contractual liability for material non‑conformity, the contracting parties may limit or completely exclude the seller’s liability. Agreements on the limitation or exclusion of the seller’s contractual liability are most often included directly in the main contract.

However, the possibility of limiting or excluding the seller’s liability for material non‑conformity is not unlimited. It is restricted not only by the limits of contractual autonomy (provisions contrary to the Constitution of the Republic of Croatia, mandatory rules, or public morality), but also in situations involving an attempt to circumvent the principle of good faith. A contractual clause limiting or excluding liability for defects is null and void if the seller knew of the defect and failed to inform the buyer of it, or if the seller imposed such a clause by abusing a monopoly position, or where the contract is a consumer contract.

Provisions of a contract that limit or exclude liability for material non‑conformities of an item that is the subject of a consumer contract, prior to the consumer notifying the seller of the defect, are not binding on the consumer.

For claims under the provisions on liability for defective products, the claim for compensation of damage caused by a defective product becomes time-barred three years from the day on which the claimant learned or ought to have learned of 1) the damage, 2) the defectiveness, and 3) the identity of the producer. The right to compensation for damage caused by a defective product is extinguished ten years from the day the product was put into circulation, unless within that period proceedings have been commenced against the producer before a court or another competent authority for the determination or enforcement of the claim for compensation.

In cases involving death, the same limitation periods apply: a three‑year subjective period and a ten‑year objective period.

Under Croatian law, “implied contractual warranties” is not a recognised legal term. The closest functional concept is the seller’s statutory liability for material non‑conformity of goods, which applies automatically under the law in every onerous sale unless the parties expressly exclude it. In consumer sales, any advance contractual exclusion or limitation of the seller’s statutory liability for material non‑conformity of goods does not bind the consumer prior to notice of non‑conformity.

The Croatian Obligations Act establishes product liability as a stand‑alone, objective, non‑contractual regime against the producer; it does not depend on any contract with, or implied warranty owed to, the claimant. This regime may be pursued in parallel with the buyer’s contractual remedies against the seller for material non‑conformity of goods.

According to the Obligations Act, a material non-conformity of goods, in the context of a contract of sale, exists if the item:

• does not correspond to the description, type, quantity, or quality, i.e., does not have the functionality, compatibility, interoperability or other features required under the sales contract;
• is not suitable for any particular purpose for which the buyer requires it and of which the buyer informed the seller no later than at the time of conclusion of the contract, and in relation to which the seller gave consent;
• is not delivered with all additional equipment and instructions, including installation instructions, as required under the sales contract;
• is not delivered with updates as stipulated in the sales contract;
• is not suitable for the use normally expected of items of the same kind, taking into account EU legislation and Croatian legislation, applicable technical standards or, if such standards do not exist, relevant codes of conduct applicable in the specific sector;
• does not correspond to the quality and description of the sample or model made available to the buyer before the conclusion of the contract;
• is not delivered with additional equipment, including packaging, installation instructions or other instructions that the buyer may reasonably expect to receive;
• does not correspond to the quantity or lacks such properties or other characteristics-including durability, functionality, compatibility and safety-that are usual for items of the same kind and that the buyer may reasonably expect given the nature of the item and having regard to public statements made by the seller or other persons in earlier stages of the transaction chain, including the manufacturer, particularly in advertising or labeling;
• is incorrectly installed or assembled where installation or assembly is part of the sales contract and has been performed by the seller or a person for whom the seller is responsible; or
• where the product is intended to be installed or assembled by the buyer, is incorrectly installed or assembled by the buyer due to deficiencies in the instructions provided by the seller or, for items with digital elements, by the seller or the supplier of the digital content or digital service.

If a product is found defective, i.e., if material non-conformity has been established, the buyer is entitled to several remedies:

• removal of the non-conformity or delivery of another item without the non-conformity, with the seller bearing the costs;
• proportionate price reduction;
• to declare the contract terminated (or simply: “to terminate the contract”).

In each of the foregoing cases, the buyer is entitled to compensation for damage in accordance with the general rules on liability for damage, including damage caused by such non-conformity to the buyer’s other property.

Punitive damages are not recoverable in breach‑of‑warranty cases.

The system of damages is based on the compensatory principle; the injured party is entitled only to compensation for measurable losses, whether actual (material) or non‑material (non‑pecuniary) damage, and solely for the purpose of compensating the harm suffered, not for punishing the defendant.

There are no special rules on document disclosure in product‑liability litigation; the standard provisions of the Civil Procedure Act apply.

The court may order any party to submit a specific document if the opposing party makes it plausible that the document is relevant to the dispute. A party may not refuse to produce a document if they have referred to it in the litigation as evidence for their statements, if they are legally obliged to hand it over or make it available, or if the document is, by its nature or content, deemed to be jointly shared by both parties. The same applies to a third party who is not part of the dispute.

Documents typically obtained in such proceedings include: technical documentation, safety and test reports and compliance documents.

Class actions are permitted for product‑liability claims in Croatia.

The scope of class actions is regulated by the Croatian Representation Act, adopted to implement Directive (EU) 2020/1828. It operates on an opt‑in basis, meaning that injured parties must explicitly declare in writing their intention to be represented by the authorised plaintiff in order to fall within the scope of the lawsuit.

The general rules of the Civil Procedure Act apply to costs, meaning that the losing party bears the costs of the successful party. There are limited exceptions to this rule for instance, a party may be required to reimburse the opposing party for costs incurred as a result of that party’s conduct.

The court determines cost allocation by first assessing the percentage of success of each party. The lower percentage is deducted from the higher one, and the difference represents the proportion of costs the losing party must pay to the winning party. In essence, the court balances the costs between the parties.

As for standing, authorised bodies — i.e., qualified entities — may file domestic or cross‑border representative actions, provided that they are included in the List of Authorised Bodies for filing representative lawsuits, issued by the Ministry of Economy.

Product liability lawsuits are typically funded by the claimants themselves.

Third‑party funding, as acknowledged in the Representative Actions Act, is allowed, provided that appropriate measures are taken to prevent conflicts of interest and to ensure that the funder, who may have an economic stake in the proceedings, does not influence the protection of collective interests. Funding by a competitor of the defendant or by any entity dependent on the defendant is not permitted. A financial statement identifying the funding sources of the qualified entity must be provided only if requested by the court.

Consistent with the cost‑allocation rules applicable in civil proceedings, the same framework applies in product‑liability claims - the losing party typically bears the procedural costs, including both court fees and the statutory attorney’s fees of the prevailing party.

Contingency‑fee agreements are permissible. The Croatian Lawyers’ Tariff provides that, in civil cases, lawyers may enter into a written agreement with the client on a fee proportionate to the success achieved in the proceedings or in the legal actions undertaken on behalf of the client. The upper limit of the agreed percentage may not exceed 30% of the total success achieved. The basis for calculating the fee consists of the sum of the principal and interest, while the awarded costs of representation belong to the lawyer, who is entitled to collect those costs from the client only if such costs have been awarded and have become due for payment, or have already been collected.

Case law in this area remains relatively limited and continues to follow the well‑established principles set out in the Obligations Act and existing EU harmonised rules.

Although the courts have not issued notable new decisions, substantial changes to the product‑liability landscape are expected once Croatia transposes the EU Product Liability Directive 2024/2853, which must occur by 9 December 2026.

Given the new regulation at the European Union level based on the EU Defective Product Liability Directive 2024/2853, the Croatian Ministry of Justice, Public Administration and Digital Transformation has announced that the plan is to transpose the directive into national legislation through an amendment to the Obligations Act. The Minister emphasised that the changes to the legal framework are numerous: “On the one hand, it is our obligation as a Member State of the European Union to harmonise Croatian legislation with the EU acquis, and on the other hand, it is about internal reasons – an analysis of the current situation and the need to further improve certain solutions.”

This Directive will apply to products placed on the market or put into service after 9 December 2026, and the Member States have until that day to transpose it into national law.

In short, the Directive regulates the following:

Any natural person who suffers damage caused by a defective product is entitled to compensation; however, the Directive does not cover situations in which the victim is a company. The right to compensation applies to the following: death or personal injury (including medically recognised psychological harm); damage to or destruction of any property (subject to certain exceptions); and destruction or corruption of data that are not used for professional purposes. The Directive also specifies which economic operators are liable for such damage (manufacturer, importer, etc.) and the circumstances under which they may be exempt from liability.

Under the new Directive, a product is defective if it does not provide the safety that a person is entitled to expect from it, or that is required by law. The Directive applies to digital products (including various types of software) and to online platforms, which may also bear liability.

Another novelty introduced by the Directive concerns the disclosure of evidence, in order to ensure equality of arms between the parties. At the claimant’s request, where the claimant has presented facts and evidence sufficient to support the plausibility of the compensation claim, the defendant must disclose relevant evidence in their possession.

Furthermore, although the claimant must prove the defectiveness of the product, the damage suffered, and the causal link between the defectiveness and the damage, the Directive provides for certain circumstances in which defectiveness and/or causation will be presumed - for instance, if the defendant fails to disclose evidence.

The limitation period for claiming compensation within the scope of the Directive is three years from the date on which the injured person became aware, or should reasonably have become aware, of the damage, the defectiveness, and the identity of the relevant economic operator. However, the operator is no longer liable after 10 years from the date on which the product was placed on the market or put into service (unless proceedings have already been initiated), or from the date on which a substantially modified product was placed on the market or put into service following its substantial modification. Exceptionally, in certain health‑related cases where symptoms emerge slowly due to the latency of personal injury, this long‑stop period is extended to 25 years (unless proceedings have already been initiated).