Harlingdon and Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd

For specific goods, a sale by description under the Sale of Goods Act 1979 s.13(1) depends on an objective assessment of the contract and surrounding circumstances. An attribution does not automatically become a contractual description. The question is whether the parties intended the goods to correspond with it. Buyer reliance is important evidence, but is not an independent legal prerequisite. In dealer-to-dealer art sales, a seller’s disclaimer of expertise and the buyer’s own assessment may show that the buyer acquired the picture as it was. A forgery is not necessarily unmerchantable under s.14(2): relevant purposes may include resale and aesthetic appreciation, and inability to resell at the price paid does not itself establish unfitness.

The plaintiffs, art dealers, bought a painting attributed to Gabriele Münter from the defendant dealer for £6,000. The painting was later found to be a forgery. The plaintiffs refunded their purchaser and claimed against the defendant for breach of the implied conditions relating to sale by description and merchantable quality.

Judge Oddie rejected the claims, finding that the plaintiffs had relied on their own assessment rather than the defendant’s attribution. The appeal concerned whether the painting was sold by description under s.13(1) of the Sale of Goods Act 1979, and whether it was of merchantable quality under s.14(2) and (6).

By a majority, the appeal was dismissed with costs. Lord Justice Nourse and Lord Justice Slade formed the majority. Lord Justice Stuart-Smith dissented.

1. Under s.13(1) of the Sale of Goods Act 1979, specific goods can be sold by description. The question is objective and requires consideration of the contract as a whole and the circumstances existing when it was made. A description becomes contractual only if a common intention can properly be imputed to the parties that the goods should correspond with it. Reliance by the buyer is a useful index of that intention, but actual reliance is not an independent legal requirement. This approach was supported by (1900) 1 QB 513, (1947) 1 KB 554 and (1984) AC 382.
2. On the facts, the defendant had disclaimed knowledge and expertise concerning Münter’s work and had made clear that he was relying on the plaintiffs. The plaintiffs’ representative assessed the painting himself. Objectively, the parties had not intended the attribution to be a contractual term. The later invoice merely recorded the existing oral agreement and did not alter it. The claim under s.13(1) therefore failed.
3. The majority also dismissed the claim under s.14(2), although their reasoning differed. Lord Justice Nourse held that the relevant purposes could include resale and aesthetic appreciation. The forgery was a defect in quality, but the painting remained capable of resale and aesthetic enjoyment. Resale at a substantial loss did not establish unfitness, and the plaintiffs could not rely on their own error as to price. Lord Justice Slade considered that, where the artist’s identity was not a contractual term, the plaintiffs could not establish the same complaint through s.14 as a substitute for s.13.
4. Lord Justice Stuart-Smith would have allowed the appeal. He considered that authenticity could be a quality of the goods and that s.14(6) required attention to the description, price and the known purpose of resale. A virtually worthless fake was not reasonably fit to be sold as a Münter for £6,000.
5. Lord Justice Nourse added that courts should be particularly cautious about giving contractual effect to attributions in dealer-to-dealer art sales, where the arguability of attributions and the parties’ commercial experience form part of the factual background.

• Court of Appeal: Appeal from the West London County Court dismissed with costs.
• West London County Court: His Honour Judge Oddie rejected claims based on sale by description, merchantable quality, fitness for purpose and misrepresentation. The latter two claims were abandoned on appeal.