Transcript Contract and Commercial Law Lecture 4 Section 14(3) Acceptance

Steph Shaw
March 2010
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Next week’s lecture will be on Monday March
08 at 11 in BB 4.05
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Section 14(3) states that if the buyer
expressly or impliedly makes known to the
seller any particular purpose for which the
goods are being bought then there is an
implied condition that the goods are
reasonably fit for that purpose
Contrast with s14(2)-fitness for all the
purposes for which goods of the kind in
question are commonly supplied
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The basic ingredients of section 14(3) are that
there is an implied condition that the goods must
be reasonably fit for the buyer's particular
purpose provided the buyer:
Has expressly or by implication made known to
the seller the particular purpose for which s/he
(the buyer) is purchasing the goods.
And the buyer
Is relying on the seller's skill or judgment that
the goods will be reasonably suitable for this
purpose (this reliance is presumed).
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where the circumstances show that the buyer
does not rely, or that it is unreasonable for
him to rely, on the skill or judgment of the
seller ...
s 14(3) frequently overlaps with s14(2)
(satisfactory quality)
If goods are unfit for their one common use
there is likely to be a breach of both implied
conditions e.g. brand new car is found to be
unroadworthy
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However where section 14(3) comes into its
own and potentially provides the buyer with
an additional remedy is where the buyer
wants the goods for a use which is not
common
Unlikely to be a breach of s14(2) if fit for the
purposes for which it is commonly supplied
but there could be a breach of s14(3) if
certain requirements are satisfied
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Buyer must make known the particular
purpose for which he is buying the goods
Priest v Last [1903] 2 KB 148 Can be implied
when there is one obvious purpose as in:
Griffiths v Peter Conway [1939] 1 All ER 685.
Followed by:
Slater v Finning [1997] AC 473.
Aswan Engineering v Lupdine [1987] 1 WLR 1
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There must be reliance on the seller’s skill or
judgment
The reliance must be reasonable
Onus on seller to prove this is not the case
Jewson Ltd v Kelly [2003]
Kelly bought 13 electric boilers which worked
well but had the effect of giving the flats low
home energy ratings
Unusual purpose was unknown to the seller
Seller could not have reasonably been
expected to discover it
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Exclusion of the term in s14(3) or liability for
its breach is regulated by UCTA 1977 s.6
s14(3) cannot be excluded in consumer sales
s6(2) UCTA
In non-consumer sales liability can be
restricted or excluded only in so far as the
term satisfies the test of reasonablenesss6(3) UCTA 1977
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Loss of right to reject goods
s11(4) where the buyer has ‘accepted’ the goods,
breach of condition can only be treated as breach
of warranty –buyer cannot reject (unless contract
provides otherwise)
The buyer’s right to damages will remain
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When the seller tenders delivery of goods to
the buyer, he is bound on request to afford
ther buyer a reasonable opportunity of
examining the goods for the purpose of
ascertaining whether they are in conformity
with the contract
Steph Shaw-Applied Contract Law
11
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s 35(1)The buyer deemed to have accepted
the goods when:
◦ (a) He intimates to the seller that he has accepted
or
◦ (b) When the goods have been delivered to him and
he does any act in relation to them which is
inconsistent with the ownership of seller-resells or
gifts goods, using goods more than necessary to
determine conformity, consuming, attempting to
repair goods
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Section 35 (2)
Where goods are delivered to the buyer, and
he has not previously examined them, he is
not deemed to have accepted them until he
has had a reasonable opportunity of
examining them
Time for rejection runs from date of delivery, not date
of discovery of defect.
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Section 35 (4)
The buyer is also deemed to have accepted
the goods when after the lapse of a
reasonable time he retains the goods without
intimating to the seller that he has rejected
them
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Buyer does not have to return the goods but
he must make them available to the seller to
repossess
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Property revests in seller
Risk of damage/loss revests in seller
Position is as if the seller had not delivered.
If buyer has paid the price then he is entitled
to recover
Buyer must take care since if he rejects in
circumstances where he is not entitled to do
so then he will be in breach of contract
Steph Shaw-Applied Contract Law
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A question of fact
Nature of goods-perishable, complex
Conduct of the parties-seeking info
Nature of the market-volatile prices therefore
time for rejection shorter
Any custom of the trade
What the parties expected the buyer to do
with the goods-resale means longer time
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Reasonable time – attempt to specify shorter
subject to UCTA (consumer/non consumer)
Attempt to specify longer time also subject to
UCTA because allowing the buyer a long time
to reject may be interpreted as allowing him
to refuse performance of the contract
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Section 35 (6)(a) - Buyer not, by virtue of this section,
deemed to have accepted because:
◦ Asks for or agrees to repair by arrangement with
seller J & H Ritchie v Lloyd or
◦ s 35 (6)(b) the goods are delivered to another under a
sub – sale
◦ where the seller knows that the buyer will resell the
goods a reasonable time would usually be the time
expected to be needed to resell the goods plus an
additional time in which the sub-buyer might inspect
the goods and try them out – Truk (UK) Ltd v
Tokmakidis GmbH [2000]
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Bernstein v Pamson Motors (Golders Green)Ltd -3 weeks too
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Clegg v Anderson Marine – five months not acceptance
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J&H Ritchie Limited v Lloyd –seller repaired but would not tell
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Fiat Auto Financial Services v Connelly [2007]
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long to reject
buyer what the problem had been. A separate agreement had
been entered into, a repair and inspection agreement. Seller’s
refusal to provide info was in breach of that agreement
NB
s36 buyer not bound to return goods
Where right to reject lost - damages
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