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Slater v Finning Ltd (1996) HL
This case concerns a breach of implied term claim under Section 14(3) of the Sale of Goods Act 1979 (SOGA 1979). Understanding this case requires grasping the implied condition of fitness for purpose and its limitations.
Case Facts:
This case concerns a breach of implied term claim under Section 14(3) of the Sale of Goods Act 1979 (SOGA 1979). Understanding this case requires grasping the implied condition of fitness for purpose and its limitations.
Case Facts:
- Parties: Slater (pursuers/buyers) and Finning Ltd (defenders/sellers).
- Goods: Camshafts for the engine of Slater's vessel, The Aquarius II.
- Issue: The camshafts failed prematurely. Slater sued for breach of the implied condition of fitness for purpose (SOGA 1979, s.14(3)).
- Finding at First Instance: The court initially found that the camshaft failure was caused by something external to both the camshafts and the engine.
- Final Decision (House of Lords): The House of Lords held that there was no breach of the implied condition of fitness for purpose.
- Section 14(3) SOGA 1979: This section implies a condition that goods sold in the course of a business are reasonably fit for the purpose for which they are bought, if the buyer makes known that purpose to the seller.
- Limitations on Implied Condition: The House of Lords clarified the limits of the seller's liability under s.14(3). Crucially, the seller is not liable if the failure is due to:
- Abnormal feature or idiosyncrasy: An unusual characteristic or peculiarity, either in the buyer's use of the goods or in the circumstances surrounding their use, that was not disclosed to the seller. This applies regardless of whether the buyer was aware of this abnormal feature. (Lord Keith's judgment)
- Caveat Emptor vs. Caveat Venditor: Lord Steyn highlights the shift from "let the buyer beware" (caveat emptor) to "let the seller beware" (caveat venditor) in commercial law concerning fitness for purpose. However, he argues that upholding Slater's claim would take caveat venditor too far. The seller's liability is not absolute; it's limited to foreseeable and disclosed circumstances.
- What is the implied condition of fitness for purpose under s.14(3) SOGA 1979? What are its requirements?
- Explain the concept of "abnormal feature or idiosyncrasy" as it relates to this case. Provide examples of scenarios where this might apply.
- How did the court balance the principles of caveat emptor and caveat venditor in reaching its decision?
- What are the implications of this case for businesses selling goods? What steps can sellers take to protect themselves from liability under s.14(3)?
- Why was it important that the cause of the camshaft failure was not definitively established? How does this uncertainty impact the application of s.14(3)?
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