Swiss law remains a popular choice for international construction contracts, but as of 1 January 2026 it operates under a revised statutory framework governing defects in construction works. The amendment to the Swiss Code of Obligations introduces clearer and partly mandatory rules on defect notification, remedies and limitation periods.

The reform strengthens the employer’s position and materially alters the risk profile for contractors performing works under Swiss-law-governed contracts.

From this article you will learn:

• how the 2026 amendment to the Swiss Code of Obligations changes defect notification rules;
• which remedies for defects in construction contracts are now mandatory and cannot be contractually excluded;
• how the mandatory five-year limitation period affects defect claims under Swiss law.

On 1 January 2026, an amendment to the Swiss Code of Obligations (CO) entered into force. The reform is particularly relevant to the construction companies from Central and Southern Europe, including Turkey, which choose Swiss law to govern their international construction projects. It addresses key aspects of the warranty regime for defects in works under construction contracts, including defect reporting, substitute performance and limitation periods. The reform introduces clearer and partly mandatory rules in areas that had long been governed by contractual practice and caused interpretative disputes.

In practical terms, the reform affects how defects are notified, how they may be remedied and how long defect-related claims may be pursued. It results in strengthening the legal position of the employer and may significantly affect the contractual risk profile of contractors performing works under construction contracts governed by Swiss law.

The most relevant aspects of the reform include the following:

• Defect notification deadlines
  Under the previous regime, defects had to be notified “immediately” after acceptance of the works or after their discovery. Due to the vague and undefined nature of the term “immediately”, this standard was regularly disputed, particularly where defects were latent, emerged gradually, or required expert assessment before they could be properly identified.
  
  The reform addresses this uncertainty by introducing a statutory 60-day notification period. This period applies to both apparent and hidden defects and runs from acceptance of works. It is a mandatory minimum period, which cannot be shortened by contract.

• Right to repair defects
  Swiss law has traditionally recognised the employer’s right to have defects repaired by the contractor. In contracts, this dispositive rule was often limited or excluded.
  
  Following the reform, the contractor’s obligation to repair defects free of charge has become mandatory. Contractual provisions restricting or excluding this right are no longer effective, making repair the default remedy under the statutory regime.

• Substitute performance after acceptance
  The amended CO introduces an express statutory right to substitute performance for defects even after acceptance of works. Where the contractor fails to remedy a defect within a set deadline, the employer may arrange the repair through a third party and recover the costs from the contractor. This amendment codifies existing practice developed by the Swiss Federal Supreme Court, providing a clearer and more predictable legal basis for substitute performance in such cases.

• Limitation period
  The reform also affects the limitation period for construction-related claims under Swiss law. The five-year limitation period for claims relating to defects in construction works, running from the acceptance of works, has become mandatory. Any contractual attempt to shorten this period is now ineffective.

The reform replaces several flexible, contract-driven solutions with fixed statutory rules under the CO. Where Swiss law is chosen as the governing law for international construction projects, parties should closely review their contracts to ensure that defect notification mechanisms, remedial clauses and limitation period provisions are aligned with the amended statutory framework.

The newly amended rules apply to construction contracts concluded after 1 January 2026.

By Jan Bałdyga

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Frequently Asked Questions

1. What is the new defect notification deadline under Swiss law?
The amendment introduces a statutory 60-day notification period for both apparent and hidden defects. This period runs from the acceptance of the works and cannot be contractually shortened.
2. Can contractors exclude their obligation to repair defects?
No. Under the revised regime, the contractor’s obligation to repair defects free of charge has become mandatory. Contractual clauses limiting or excluding this right are no longer effective.
3. Is substitute performance now allowed after acceptance?
Yes. If the contractor fails to remedy a defect within a set deadline, the employer may arrange repair by a third party and recover the costs from the contractor.
4. What is the limitation period for construction defect claims in Switzerland?
The five-year limitation period for defect-related claims in construction works has become mandatory and cannot be shortened by agreement.