a constructor to ensure that the structure is of the quality and description required by the contract, is fit for a particular purpose expressly or impliedly made known to the contractor, and fit for purposes of which a structure of the same description would ordinarily be used.105 Again, there is a marked similarity to the approach in the BGB. To apply these provisions to the example given earlier, assuming that the type of mortar to be used had been specified in the contract, deviation from this description would mean the building was not in conformity with the contract. Thus, the particular articles on construction contracts would affirm the result reached under the general DCFR rule, and entitle the customer to a reduction in price affecting the reduction in value (if any) of the building as constructed.

(b)  Sales of goods

The harsh decision of the US Supreme Court in the case of Filley v. Pope,106 referred to approvingly in later Supreme Court decisions, might be thought to go against the substantial performance position. In that case, a contract was concluded for the sale of 500 tons of pig iron, at the price of $26 per ton, to be shipped from Glasgow to New Orleans as soon as possible. The seller had trouble finding a vessel to ship the iron, but eventually found one which was able to transport it from the port of Leith, near Edinburgh, rather than Glasgow. The iron was shipped from Leith to New Orleans, but the seller refused to accept and pay for the iron as shipped from Leith. The Court held that the stipulated port of embarkation of the goods was a ‘warranty’ (or ‘condition precedent’) of the contract, failure to fulfil which entitled the buyer to ‘repudiate’ (in other words, terminate) the contract. Such a result of course leaves the seller, who has performed at some considerable cost to himself, with no way to claim the price from a buyer unwilling to accept the goods simply on account of a matter which has no bearing on the quality of the goods at all.

In English law (which has its own late nineteenth-century equivalent of the Filley decision),107 as in US Common law, a distinction is made between those types of term which entitle a party to terminate a contract (called a ‘condition’), and those which do not (called a ‘warranty’, despite equation

105 Art. IV.C.-3:104. 106 115 US 213.

107Bowes v. Shand (1877) 2 App Cas 455, where the deviation from the contract terms was as to the date upon which goods were to be shipped. The House of Lords held the date of shipment to be an integral part of the description of the goods sold.

of the terms ‘warranty’ and ‘condition’ in Filley). A third category (an ‘innominate term’) may give a right to terminate, but only if the breach is deemed severe enough.108 Determining which character a term will have is essentially a matter of interpreting what the parties intended (a point emphasised in the case of sale of goods contracts by section 11 of the Sale of Goods Act 1979, which states that such determination ‘depends in each case on the construction of the contract’).109 Assuming that the same facts as arose in Filley were to obtain in an English case, the outcome would depend on whether the parties had intended the port of embarkation of the goods to be a condition of the contract, something which could not be assumed merely from the inclusion of the name of the port in the contract. The case for arguing that the inclusion of the port of embarkation of the goods was a condition would be sealed if it could be argued that it was part of the description of the goods, that is if the goods to be sold by the seller were not just ‘500 tons of pig iron’ but ‘500 tons of pig iron to be shipped from Leith’. The significance of finding that the description of the goods to be sold included the phrase ‘to be shipped from Glasgow’ would be that, were the goods to be shipped from Leith instead, what would be delivered would not be the goods as described in the contract. This would mean that there would be a breach of section 13(1) of the Sale of Goods Act, the section which provides that where there is ‘a contract for the sale of goods by description, there is an implied term that the goods will correspond with the description’, breach of this section being deemed a condition of the contract.110 The approach of the US Supreme Court in Filley was certainly to see the stipulation as to the port of embarkation as part of the description of the goods sold, a similar approach taken by the House of Lords in a case from 1877.111 On the other hand, in the present era an English court might well be less likely to consider such a stipulation as part of the description of the goods.112

If goods shipped from the wrong port were nonetheless kept by the buyer, it would certainly have to pay for them. Moreover, it is extremely

108Hong Kong Fir Shipping Co. Ltd v. Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26.

109SOGA, s. 11(3) (not applicable in Scotland).

110SOGA, s. 13(2). 111 Bowes v. Shand (1877) 2 App Cas 455.

112In Harlingdon & Leinster Enterprises Ltd v. Christopher Hull Fine Art Ltd [1991] 1 QB 564, the description a ‘Gabriele Münter’ applied to a painting was held not have been intended by the parties to be a term of the contract, so that the contract was not one of sale by description in terms of s. 13 of the Sale of Goods Act 1979. Such a view suggests that the specification of a port of loading for goods may be equally unlikely to be held a condition of a contract.