UK: Fitness For Purpose: Two Recent Cases

Last Updated: 19 August 2011
Article by Chelsea Walters

Two recent cases serve as useful reminders of the principles involved in relation to fitness for purpose in the context of the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982.

Case 1: BSS Group Plc v Makers (UK) Ltd (t/a Allied Services) [2011] EWCA Civ 809 click here
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In the first case, a seller, BSS Group Plc ("BSS"), had supplied particular types of adaptor and valve to Makers (UK) Limited ("Makers") in connection with a plumbing project which formed part of renovation works being carried out at a public house in Cambridge. The adaptor and valve turned out to be incompatible, and within hours of activation the valve blew off causing a damaging flood to the ground floor of the public house. The issue in the case was whether BSS was in breach of the implied term as to fitness for purpose imposed by section 14(3) of the Sale of Goods Act 1979 (as amended).

Section 14 (3) of the Sale of Goods Act 1979

This Section of the Sale of Goods Act makes it clear that where the seller sells goods in the course of a business and the purchaser, expressly or by implication, makes known to the seller any particular purpose for which the goods are being bought, there is an implied term that the goods supplied under the contract are reasonably fit for that purpose, whether or not the purpose is that for which such goods are commonly supplied. There is an exception to this however where the circumstances show that the purchaser has not relied, or that it is unreasonable for him to rely, on the skill and judgement of the seller.

Note that this does not relate to the implied term of fitness for purpose which would usually apply in a design and build contract for building works as a whole. 

The Initial Case

The judge in the initial case found that Makers had by a fax enquiry, written quotation and a written order, expressly specified a particular purpose to BSS. This purpose was that the valves were being bought for use with a particular "Uponor" system being used at the property, and Uponor type of adaptor. The valves in fact provided by BCC were of a different type to Uponor, with the result that the two items were incompatible, causing the flood to the property. The judge also found that Makers had relied on BSS's skill and judgment as to the compatibility of the valve and adaptor. The failure of BSS to supply valves which were compatible with the Uponor type of adapter was therefore held to be a breach of the implied term under the Act. BSS appealed this decision.  

The Appeal

The Court of Appeal dismissed the appeal and agreed with the original judge's decision. Makers were held to have made known to BCC the particular purpose for which the valves were intended to be used and that it was likely that the valves would be used with the Uponor system (impliedly – the Court fell short of endorsing the original judge's finding that Makers had made known its purpose expressly). The valves were not reasonably fit for that purpose on the basis that they were incompatible with the Uponor adaptors with which they were likely to be used for the purpose of sealing off an Uponor pipe, and would be likely to (and did) fail when used in conjunction with the adaptors. 

The Court also agreed with the initial judge's decision to dismiss BSS's argument that the failure of the goods to meet the intended purpose arose from an abnormal feature or idiosyncrasy, not made known to the seller by the purchaser. BSS referred to a case called Griffiths v Peter Conway Ltd [1939] 1 All ER 685 in which the purchaser bought a coat specially made for the purchaser. The coat was apparently fit for its purpose except that, because the purchaser had abnormally sensitive skin, the wearing of the coat caused the purchaser to contract dermatitis, a consequence that would not have been suffered by a purchaser who did not have such sensitive skin. Since the purchaser had not made the seller aware of its sensitivity however, the seller was not in breach of the implied term as to fitness for purpose because he did not know that he had to cater for the needs of a person of such sensitivity. The Court held that this was not applicable to the present case, on the basis that as far as BSS knew, there were no relevant unknowns about either the valve or the adaptor. BSS was a specialist dealer and simply had to exercise its skill and judgement in assessing whether they both worked together.  

The Court also confirmed the position under the Act in relation to whether Makers had relied on BSS's skill and judgment. In a case in which the purchaser has made known its purpose, there is on face value an implied condition of fitness for purpose which the seller can only defeat by proof that the purchaser did not rely on or that it was unreasonable for him to rely on the skill or judgement of the seller.

Case 2: Trebor Bassett Holdings Ltd & Anor v ADT Fire and security Plc [2011] EWHC 1936 (TCC) click  here

Another recent case dealt with fitness for purpose, but this time, in relation to Section 4 of the Supply of Goods and Services Act 1982 (as amended). This is drafted in largely similar terms to Section 14 (3) the Sale of Goods Act 1979 (as amended). The case related to a fire which had destroyed the purchasers' confectionary factory. Among other things, the purchasers were arguing that a CO2 fire suppression system supplied for the popcorn machinery in the factory was not fit for purpose under the 1982 Act. In this case, the Court did not consider that the purchasers had sufficiently established the implication of the fitness for purpose obligation on the basis that they had not indicated any particular purpose for which the goods were being acquired (and, even if they had, it is likely that the suppliers would have said that it would have been impossible to achieve).

The Court also held that there was no reliance of the kind necessary to trigger the implication of a fitness for purpose obligation. The purchasers had already decided that they were going to replicate an existing system from another factory before they approached the suppliers for the first time. Accordingly, not only did they fail to make any particular purpose known to the suppliers, but the purchasers did not rely on the suppliers' skill or judgement at all. The Court did point out, however, that if the CO2 system had been wholly inappropriate, or was never going to work in the conditions in the factory, then the suppliers were obliged to say so. However, there was no evidence that the CO2 suppression system was itself inappropriate in concept or itself misconceived in principle, or could never have worked.

Summary

Although they do not reflect new law, the cases above are a useful reminder for purchasers, sellers and suppliers of goods of the principles involved in relation to fitness for purpose in the Sale of Goods Act 1979 (as amended) and the Supply of Goods and Services Act 1982 (as amended).

If you are purchasing goods, the safest option is to ensure that you make absolutely clear to the seller the particular purpose for which you are purchasing such goods. Sellers/Suppliers should remember that where a purchaser has made known its purpose, there is on face value an implied condition of fitness for purpose. However, this can be defeated by proof either that the purchaser did not rely on or that it was unreasonable for the purchaser to rely on the skill or judgement of the seller/supplier.  An exclusion or limitation clause in the terms of supply may also have such an effect. 

To view a PDF of this article click here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 15/08/2011.

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