Arcos Ltd v E A Ronaasen and Son

Where a sale contract describes goods by precise measurements, the seller must comply strictly with that description. Commercial equivalence, merchantability and fitness for the buyer’s disclosed purpose do not cure a failure to correspond with the contractual description.

An express margin or recognised trade usage may qualify the stated measurements. The law may also disregard microscopic deviations. Beyond those limits, failure to satisfy the descriptive condition entitles the buyer to reject the goods.

The sellers contracted to supply timber staves described as one-half inch thick. Most staves exceeded that thickness, although the umpire found that they were commercially within and merchantable under the specification and fit for making cement barrels.

The umpire decided that the buyers could not reject them. Wright J, on a special case, held that the goods did not satisfy the contractual description. The Court of Appeal unanimously affirmed that decision. The sellers appealed, raising whether the descriptive condition under section 13 of the Sale of Goods Act 1893 had been performed.

1. The appeal was dismissed with costs. Lord Buckmaster, Lord Warrington of Clyffe and Lord Atkin each concluded that the goods failed to satisfy the contractual description. The umpire could not treat commercial equivalence as performance of an unqualified promise to supply staves one-half inch thick.

2. Per Lord Atkin, where a written contract specifies conditions of weight, measurement or a similar characteristic, those conditions must be strictly performed. A stated measurement does not ordinarily mean approximately that measurement. A seller requiring a margin must stipulate for one. Recognised trade usage may alter the meaning of the figures, and the law may disregard microscopic deviations, but neither qualification was established here.

3. Per Lord Buckmaster, a buyer may reject goods which are not the article described even though they are its commercial equivalent. Vigers and Sanderson, 1901, 1 K.B. 108, was distinguishable because its contract used the qualifying word “about”. Lord Buckmaster approved Scrutton LJ’s view in Green v Arcos, 39 Lloyd's List Reports 229, that the earlier reference to commercial compliance extended only to differences too small for the law to regard.

4. Per Lord Warrington, the contract permitted specified variations in length and breadth but prescribed a thickness of one-half inch without qualification. By adding a commercial qualification, the umpire altered the parties’ description. The extent of the excess was not negligible.

5. Per Lord Atkin, description and quantity are distinct. Section 13 of the Sale of Goods Act 1893 governs correspondence with description, while section 30 governs quantity. Authorities allowing negligible excesses or deficiencies in quantity did not justify a general doctrine of substantial compliance with a contractual description.

6. Per Lord Atkin, the condition of fitness for a disclosed purpose under section 14(1) was additional to the descriptive condition under section 13. The fact that the staves were fit for making cement barrels did not prevent rejection for failure to correspond with their description.

1. House of Lords: Dismissed the sellers’ appeal and upheld the buyers’ right to reject the goods.

2. Court of Appeal: Scrutton, Greer and Slesser LJJ unanimously affirmed Wright J’s decision in favour of the buyers.

3. High Court: Wright J held on the special case that the dimensional differences could not be disregarded and that the goods did not correspond with the contractual description.

4. Arbitration: The umpire had found that the goods were commercially within and merchantable under the specification and awarded that the buyers were not entitled to reject them.