- •The contents of the contract
- •4.1 Introduction
- •4.2 Distinction between Representations and Terms
- •4.2.1 Was the claimant relying on the skill and knowledge of the defendant?
- •4.2.3 Was there a significant lapse of time between the statement and the contract?
- •4.3 Remedies for Pre-Contractual Statements
- •4.3.1 Misrepresentation
- •4.3.2 Collateral contract
- •4.3.4 Negligent misstatement
- •4.3.5 Conclusion on pre-contractual statements
- •4.4 Express Terms
- •4.4.1 Incorporation
- •4.4.2 Construction
- •4.4.3 Methods of interpretation of express terms
- •4.4.3.1 «Purposive» or «commercial» interpretation
- •4.4.3.2 Interpretation under the Principles of European Contract Law
- •4.4.5 Conditions, warranties and innominate terms
- •4.5 Implied Terms
- •4.5.1 Terms implied by the courts
- •4.5.2 Terms implied by custom
- •4.5.3 Terms implied in fact
- •4.5.4 The Moorcock test
- •4.5.5 The «officious bystander» test
- •4.5.6 Terms implied by law
- •4.5.7 Liverpool City Council V Irwin
- •4.5.8 Terms implied by statute
- •4.5.9 Implied terms under the Sale of Goods Act
- •4.5.9.1 Title
- •4.5.9.2 Description
- •4.5.9.3 Satisfactory quality
- •4.5.9.4 Fitness for a particular purpose
- •4.5.9.5 Relationship between s 14(2) and s 14(3)
- •4.5.9.6 Sale by sample
- •4.5.10 Implied terms under the Principles of European Contract Law
- •4.6 Statutory Controls
4.5.9.4 Fitness for a particular purpose
If the buyer wants the goods for a particular purpose, and the seller is aware of this, then by virtue of s 14(3) there will, in all sales in the course of a business, be an implied term that the goods will be reasonably fit for that purpose, unless:
... the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely on the skill and judgment of the seller.
The section can apply even though the goods only have one purpose, in which case the seller will be taken to have notice of it, but it will usually be more appropriate to use s 14(2) in such circumstances. Section 14(3) may need to be relied on, however, if there is something special about the circumstances in which the goods are to be used. In Griffiths v Peter Conway, the plaintiff contracted dermatitis from wearing a Harris Tweed coat. This was brought about by the fact that the plaintiff had an unusually sensitive skin. On the facts, this was not something which the seller knew, and so the claim under s 14(3) failed. If the seller had been aware, however, then the action under this section would have been the appropriate one, despite the fact that the coat only had one «purpose», that is, to be worn.
The same approach was used by the House of Lords in Slater v Finning Ltd. A camshaft supplied by the defendants failed when used in an engine fitted to the plaintiffs’ fishing boat. Replacement camshafts supplied by the defendant also failed. The plaintiffs sold the engine, with its latest replacement camshaft, and it was fitted to another fishing boat in which it was apparently used without problem. The judge found that the problem of the failure of the camshafts must have been caused by some unexplained idiosyncrasy of the plaintiffs’ fishing boat. There was therefore no breach of the implied condition of fitness for purpose. This conclusion was confirmed by the House of Lords, which also made clear that where the problem arose from an abnormal or unusual situation not known to the seller, it was irrelevant for the purposes of s 14(3) whether or not this situation was known to the buyer.
A claim will not succeed under s 14(3) where the problems arise from the buyer’s misunderstanding of instructions supplied with the goods. This was the view taken in Wormell v RHM Agriculture (East) Ltd. This decision appears to accept, however, that defective instructions could lead to goods being found to be not fit for a particular purpose.
Once it is clear that the seller knew of the particular purpose, the burden is on the seller to show that there was no, or unreasonable, reliance. This is a hard test to satisfy, since the courts tend to favour the buyer, and have made it clear that partial reliance is sufficient to found an action.
4.5.9.5 Relationship between s 14(2) and s 14(3)
In Jewson Ltd v Boyhan the Court of Appeal emphasised the need to distinguish carefully between s 14(2) (satisfactory quality) and s 14(3) (fitness for a particular purpose). The defendant had supplied electric boilers for a flat conversion project. The boilers had the effect of reducing the energy efficiency rating of the flats and therefore made the flats more difficult to sell. The trial judge found the defendants in breach of both s 14(2) and s 14(3).
In allowing the defendant’s appeal, the Court of Appeal held that s 14(2) was concerned with the intrinsic quality of what was supplied. Here the question under s 14(2) was whether the boilers were satisfactory as boilers for flats, ignoring the particular circumstances which gave rise to the problems in this case. The answer was «yes», so there was no breach of s 14(2). As regards s 14(3), the important issue was whether the claimants had reasonably relied on the defendant’s skill and judgment in supplying the boilers. The answer was yes, as regards the intrinsic quality of the boilers for heating flats, but no as regards their suitability for these particular flats. On this issue, the defendant had insufficient information for it to be reasonable for the claimant to rely on them for this purpose. The defendant was therefore not liable under s 14(3) either.