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The High Court in Air Transworld Ltd v. Bombardier
Inc.ą ruled that an exclusion clause that did not
expressly refer to the word "conditions" was nevertheless
successful to exclude the conditions implied into a sale of goods
under the Sale of Goods Act 1979 (England). In a dispute over the
condition of an executive aircraft at the time of delivery from the
manufacturer, the High Court ruled that the exclusion clause was
clear that all the seller's obligations and liabilities were to
be found exclusively in the contract, and that general wording
excluding obligations implied by law was sufficient to exclude the
conditions implied by the Sales of Goods Act. Mr Justice Cooke
rejected arguments that the relevant contract provision as an
exclusion clause should be construed contra proferentem,
with the result that any ambiguity should be determined in favour
of the plaintiff/claimant.
The plaintiffs claim alleged that the aircraft did not
correspond with description, was not of satisfactory quality and
was unfit for purpose within the meaning of the Sale of Goods Act
(ss. 13 &14)("SGA"). The defendant relied on the
terms of the contact excluding liability under statute and
replacing it with a set of contractual warranties.
The judgement takes us through a line of English authorities,
the effect of which is that liability cannot be excluded for a
breach of a condition implied by the SGA by exclusions
which refer merely to "warranty" or
"guarantee", even if those words are cross-referenced to
statues or rules of law, which would otherwise give rise to an
implication of such terms. The authorities required any term
excluding a condition implied by the SGA to be in "apt and
precise words" if it is to be effective.
Mr Justice Cooke commented that based on the wording in the
contracts, there was plainly intended to be no room for the
operation of any primary or secondary rights or obligations outside
the terms of the contract itself. He further commented that:
"No person reading this Article [4] could be in any doubt that
every promise implied by law is excluded, in favour of the
contractual promises set out in the APA".
Unfair Contract Terms Act 1977 (England) does not apply to an
"international supply contract" and accordingly it was of
no assistance to the claimant in this case.
Comment
We note that the transcript of this case indicates that an
appeal is outstanding of this judgement. It is likely that the
appeal will involve review of the legal analysis of this decision
which runs contrary to the line of English authorities which states
that liability cannot be excluded for a breach of a condition
implied by the SGA, by exclusions which are lack precision required
to unequivocally exclude such liability.
Footnote
1 [2012] EWHC 243
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