UK: Individual Components Are Goods But Not Bespoke System As A Whole

Last Updated: 17 September 2012
Article by Mark Alsop

Trebor Bassett Holdings Ltd & Cadbury UK Partnership v ADT Fire & Security plc [2012] EWCA Civ 1158

ADT supplied, for £9,000, a fire suppression system for Trebor's popcorn plant (Trebor is a subsidiary of Cadburys). A fire developed in a hopper, ADT's system did not put it out, the fire spread and the entire manufacturing plant, including Cadbury's adjacent chocolate confectionary production lines, dissolved into a sticky mess and was destroyed. Trebor/Cadburys sued in contract and tort. The High Court found that the design of the system was negligent, in that ADT had failed to use reasonable care and skill in the design. However, the Judge also found that Cadburys was negligent, indeed "woefully at fault" and "even reckless" in its failure to segregate the oil pop production area from the rest of the building and to install sprinklers. Since the contractual duty of ADT was co-extensive with its tortious duty, the Judge applied Section 1 of the Law Reform (Contributory Negligence Act) 1955 to reduce the damages payable by 75%. To avoid taking this reduction, Trebor was therefore left in the position of having to show that ADT owed contractual duties that went beyond the tortious obligation of reasonable care and skill. It raised a number of arguments, with the two relevant for this bulletin being that (i) the system was a supply of goods and so was subject to the conditions of satisfactory quality and fitness for purpose implied by S4 of the Sale of Goods and Services Act 1982 and (II) the specification amounted to a guarantee that the fire suppression system would extinguish fires.

The contract was on Cadburys' standard terms which stated that "all Goods supplied and/or Services carried out shall be of good quality and subject to the Buyer's approval and in particular must meet the governing Specification and CTB standards but without limitation must also be as required by law in respect of title, quantity, quality, purpose or description...". The opening line of the specification stated: "For the protection of the above hazard, we propose the design, supply, delivery, installation, testing and commissioning of a CO2 fire fighting system".

The Court of Appeal rejected Trebor's appeal. In relation to the two issues:

  • Implied terms. This was not simply the supply of an off the shelf system or product. That was clear from the specification. What was offered was, at best, a bespoke product. The important element was not so much the inherent quality of the constituent parts, but rather their selection as being suitable for the task and the manner in which they were to be combined. "It was wholly artificial to regard ADT as having contracted to supply a system which can be equated with "goods" and of which it can simply be asked in the abstract, was it or was it not of good quality." The system was made up of various pieces of equipment, but what made it a system (as opposed to a random selection of equipment) was the design: the pulling together of all the relevant information into a designed system. The court said that another way of coming to the same conclusion was that it was not possible to say if the system supplied was in the abstract not of good quality because it did not have any inherent characteristics against which it could be judged (that depended on the use to which the system was to be put). ADT was agreeing to supply primarily design skills and to use care in exercising them, not goods. The goods which were supplied were of good quality – the sensor that caused the problem worked fine; the design stipulated the wrong position for it. The shortcomings in the system were matters of design, not the inherent quality of the goods which were also supplied. The SGSA implied terms for goods therefore had no relevance.
  • As for the specification, this did not amount to a warranty or guarantee that all fires would be extinguished. Both the High Court and the Court of Appeal made it clear that it would be extremely unusual for a professional to undertake that type of liability. Very clear words indeed would be required to bring about the result that a designer and supplier of fire suppression systems had contracted to extinguish all fires occurring.


The point being made by the court was that the supply of a bespoke system as a whole does not constitute the supply of goods for the purposes of implying statutory terms. The individual components may well be goods, subject to the implied terms, but if the fault in the system is one of design, then the fault is part of the service element and only the reasonable care and skill term will be implied.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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