Lloyd's Maritime and Commercial Law Quarterly
SHIP REPAIRS AND FITNESS FOR PURPOSE
Slater v. Finning
The diminution of caveat emptor in the sale of goods has, thus far, been a striking feature of the 20th century. The implied terms relating to the description, quality and fitness for purpose of goods in the Sale of Goods Acts 1893 and 1979 have been extended consistently in the buyer’s favour, often with a fervour equatable with a desire to inaugurate caveat venditor as the workaday rule. In relation to the implied condition of fitness for purpose, this mutation has been achieved through a combination of accident and design. Accidental extension occurred initially as buyers who were wary of the meaning and scope of the implied term of merchantable quality regularly and successfully alleged breach of the seemingly more accessible implied term as to fitness for purpose,1 but, in later cases, the seller’s augmented liability and the ensuing allocation of risk were thought to be both accurate vis-à-vis the parties and germane in terms of public policy.2
More recently some decisions have indicated that the seller’s liability for breach of the implied terms might correctly be attenuated3 and, as the recent decision of the House of Lords in Slater v. Finning Ltd
4 emphasizes, the transformation from caveat emptor to caveat venditor is not yet complete. The appellant owners of a fishing vessel engaged the respondent marine engineers to repair the vessel’s engine when the main bearings failed. The respondents installed a new type of camshaft which its manufacturers claimed would be subject to less wear and have an extended life; but the new camshaft failed when the vessel was at sea, as did two further camshafts of identical type fitted by the respondents. Eventually, the appellants had a new engine installed in the vessel and had no further problems; the old engine was sold and fitted in another vessel, where, after a thorough overhaul but without a new camshaft, it performed well during extensive fishing trips. The appellants alleged that the respondents were in breach of the implied condition of fitness for a particular purpose contained in the Sale of Goods Act 1979, s. 14(3), in that the camshaft was unfit for use in their vessel and the particular purpose had been made known to the respondents by the fact that the camshaft was to be fitted in that particular vessel (no claim was made that the contract was one for the supply of services). In dismissing the appeal, the House of Lords held that there was no breach of s. 14(3) where the failure of the goods to meet the intended purpose arose from an abnormal feature or idiosyncrasy in the buyer or in the circumstances of the use of the goods, which had not been communicated to the seller. This was so irrespective of whether or not the buyer was aware of the idiosyncrasy. In the instant case, the House considered that the cause of the failure of the camshafts arose from the vessel’s extraordinary tendency to produce excessive torsional resonance, meaning that the camshafts became worn much sooner than
1. E.g., Preist v. Last [1903] 2 K.B. 148.
2. E.g., Grant v. Australian Knitting Mills Ltd [1936] A.C. 85; Ashington Piggeries Ltd v. Christopher Hill Ltd [1972] A.C. 441.
3. E.g., MIS Aswan Engineering Establishment Co. v. Lupdine Ltd [1987] 1 W.L.R. 1 (see Brown, “The Meaning of Merchantable Quality in Sales of Goods: Quality or Fitness for Purpose?” [1987] LMCLQ 400); Harlingdon and Leinster Enterprises Ltd v. Christopher Hull Fine Art Ltd [1991] 1 Q.B. 564 (see Bridge, “Description, Reliance and the Sale of Goods” [1990] LMCLQ 455; Brown, “Forgery, Fine Art and the Sale of Goods” (1990) 106 L.Q.R. 561).
4. [1996] 3 W.L.R. 190; [1996] 2 Lloyd’s Rep. 353.
193