Slater v Finning Ltd

Under section 14(3) of the Sale of Goods Act 1979, a business seller is strictly liable for reasonable fitness only for a purpose made known expressly or by implication. The purpose is assessed objectively from what a reasonable seller in the same circumstances would understand.

A seller may ordinarily assume that goods are required for their normal use. If their failure results from an abnormal feature or idiosyncrasy in the buyer or the circumstances of use, there is no breach unless that feature was made known to the seller. The rule applies even where the buyer was unaware of the abnormality.

The owners of a fishing vessel bought replacement camshafts from a marine-engine dealer for installation in the vessel's Caterpillar engine. Several replacements suffered premature wear. The unchallenged findings established that the camshafts were appropriate for that engine and that their failure resulted from excessive torsional resonance caused by an unidentified feature external to the camshafts and engine.

The Lord Ordinary dismissed the owners' claim under section 14(3) of the Sale of Goods Act 1979 and upheld the dealer's counterclaim. The Second Division refused the owners' reclaiming motion. The central issue before the House was whether the dealer nevertheless warranted fitness for use in this particular vessel, including its unknown and abnormal tendency to produce excessive resonance.

1. Disposition. The House unanimously dismissed the appeal. Lord Keith of Kinkel and Lord Steyn delivered reasoned speeches. Lord Griffiths, Lord Jauncey of Tullichettle and Lord Slynn of Hadley agreed with both. The orders dismissing the claim and sustaining the dealer's counterclaim therefore stood.

2. Scope of the implied condition. Per Lord Steyn, section 14(3) of the Sale of Goods Act 1979 imposes strict liability in the sense that liability does not depend upon want of reasonable care. Reasonable fitness remains a relative concept. Once the buyer has made a purpose known, fitness is prima facie implied unless the seller proves absence of reliance or that reliance on its skill or judgment was unreasonable.

3. Communication of purpose. Per Lord Steyn, the statutory words receive a broad and practical construction. A particular purpose means a specified purpose, which may be general and may arise by implication. The question is objective: what would a reasonable person, placed as the seller was when contracting, have understood the buyer's purpose to be? A seller may normally infer that goods are wanted for an ordinary use. A non-normal purpose or condition must be communicated before contracting.

4. Unknown abnormalities. Per Lord Keith and Lord Steyn, goods do not breach the condition merely because they fail when exposed to an abnormal feature or idiosyncrasy in the buyer or the circumstances of use which was not made known to the seller. The buyer's own ignorance of that feature does not transfer the risk to the seller. Without knowledge of the abnormality, the seller cannot exercise skill or judgment in selecting goods to accommodate it.

5. Application. The dealer could infer only that the camshafts were required as working components in a Caterpillar engine fitted to an ordinary vessel. The camshafts themselves were suitable. Their premature failure arose from the vessel's abnormal tendency to generate excessive torsional resonance, of which the dealer had not been informed. The implied condition was correspondingly limited, and there was no breach.

1. House of Lords: Unanimously dismissed the owners' appeal and left the Second Division's decision undisturbed.

2. Second Division of the Court of Session: On 30 November 1994, refused the reclaiming motion and affirmed the Lord Ordinary's interlocutor, subject to an agreed adjustment of interest on the counterclaim.

3. Lord Ordinary: On 22 January 1993, Lord Weir assoilzied the dealer from the claim and gave judgment on its counterclaim for £82,826 including interest.