6â Sale of Goods Act 1979, section 14(3): fitness for purpose

The fitness of goods for their common purpose has already been considered as part of satisfactory quality but there remains the issue of liability for the ‘particular purposes’ to which goods may be put. Liability will arise under section 14(3)

105General Product Safety Regulations 2005 (SI 2005/1803), reg. 5.

106Ibid. reg. 9.â 107â [1981] 1 All ER 1185.

104 The implied conditions in sale of goods contracts

There is a strong argument here for saying that there has not been any reliance upon the seller but rather a reliance upon the reputation and publicity of the manufacturer. Thus, in Wren v. Holt,115 the court failed to find reliance when the buyer purchased beer from a tied house. Of course, the reversal of the burden of proof might now mean that reliance would be assumed on the basis of Grant v. Australian Knitting Mills (above), with the burden falling on the seller to demonstrate a lack of reliance. Further, it is clear, following the decision in Cammell Laird & Co. Ltd v. Manganese Bronze & Brass Co. Ltd,116 that reliance might be partial in that none exists in respect of any specifications for the product laid down by the buyer, but that reliance will be presumed in respect of other aspects of the goods unless the seller demonstrated that even partial reliance did not occur or would have been unreasonable. In that case, the seller was to provide two propellers for two ships. The buyer laid down certain specifications regarding the design but other factors, including the thickness of the blades, were not covered by the specifications. In the event, the propellers were not fit for the purpose because they were not thick enough. The House of Lords held that the seller was liable for any factors not governed by the specifications as, in respect of those, the buyer was relying on the seller’s skill and judgement.

As for the suitability of the goods themselves, section 14(3) requires that they are reasonably fit for the intended purpose. This does not provide an absolute guarantee of suitability and factors similar to those considered when assessing satisfactory quality come into play. Hence, things such as age, price and durability must be considered when evaluating fitness for purpose as one cannot reasonably expect second-hand goods to perform as well as new ones and cheaper goods may not last as long as more expensive ones. That said, there is authority that the seller will be held liable in respect of latent defects that render the goods not fit for the purpose even though it may be that the seller could not have discovered the defect even with the exercise of care and skill. Thus, in Frost v. Aylesbury Dairy Co. Ltd,117 the seller of milk infected with typhoid was held liable despite the defect being unknowable, a strict approach supported in Kendall v. Lillico.118 This approach is to be expected given that the section imposes strict liability and not liability based on care and skill. A different approach to the unknowable defect occurs in tort where, under product liability, the producer of defective products will escape liability using the state of the art defence if the defect was unknowable given the state of scientific and technical knowledge available at the relevant time.119

Q9 Analyse the relationship between section 14(2) and (3) as regards liability for the fitness for purpose of goods supplied under a contract. Further, consider the role of reliance in liability under section 14(3).