BRITVIC SOFT DRINKS LTD AND OTHERS v. MESSER U.K. LTD AND ANOTHER [2002] EWCA Civ 548

Incorporating a technical standard into a contract does not ordinarily create a general warranty that goods are suitable for every stated use. Where the standard identifies categories and prescribes specific specifications, descriptive language about suitability may identify the relevant category without covering unexpected contaminants or commercial consequences that the standard does not address.

Under the Unfair Contract Terms Act 1977, exclusion of implied terms under section 14 of the Sale of Goods Act 1979 must be fair and reasonable in the circumstances known or contemplated when the contract was made. Standard terms may fail that test where the buyer could not reasonably be expected to detect an unforeseen contaminant and the supplier was best placed to bear or pass on the risk.

Messer supplied carbon dioxide to food and drinks manufacturers. Trace benzene entered the carbon dioxide through a manufacturing failure. Although the concentration posed no health risk, drinks made with the carbon dioxide became commercially unsaleable because of public concern.

Tomlinson J awarded damages to Bass, as assignee of claims by THP and Brothers, under implied terms as to satisfactory quality and fitness for purpose. The contracts referred to BS 4105 and contained standard clauses limiting Messer’s obligations and excluding other warranties. The appeal concerned whether BS 4105 contained an express undertaking relevant to benzene and whether clauses 11.1 and 11.2 satisfied the reasonableness requirement under the Unfair Contract Terms Act 1977. Other aspects of the appeal had been abandoned.

1. Disposition. The appeal was dismissed unanimously. Messer succeeded on the issue concerning the construction of BS 4105, but failed on the enforceability of clauses 11.1 and 11.2.
2. BS 4105. Mance LJ held that the description of type 2 carbon dioxide as suitable for industrial food applications was, at most, a representation relating to the characteristics ordinarily expected to be present. It did not create a general contractual undertaking of suitability or address unexpected contaminants such as benzene. Neuberger J reached the same conclusion, reasoning that section 1 identified and explained the categories, while the later sections prescribed the relevant specific standards. Thorpe LJ agreed with both judgments.
3. Reasonableness. The clauses purported to exclude the implied undertakings arising under section 14 of the Sale of Goods Act 1979. Since the parties were not dealing as consumers, section 6(3) of the Unfair Contract Terms Act 1977 permitted exclusion only if the clauses satisfied the statutory requirement of reasonableness. The question was whether they were fair and reasonable having regard to the circumstances known or contemplated when the contracts were made. Messer bore the burden of establishing reasonableness.
4. The appellate court applied the approach in Mitchell (George) (Chesterfield) v Finney Lock Seeds Ltd [1983] 2 AC 803: a first-instance assessment of reasonableness should receive the utmost respect and should be disturbed only for an erroneous principle or where plainly and obviously wrong. Incorporation of a term did not make actual knowledge of its existence and extent irrelevant. The parties’ knowledge, negotiations, and commercial circumstances could all be considered.
5. The contracts were standard terms that had not been discussed or negotiated. The buyers had no reason to test for benzene or other wholly unexpected contaminants. BS 4105 assumed that manufacturing and supply processes would exclude such substances. The resulting risk arose from a manufacturing or supply mishap and was one which Messer, as supplier, could reasonably be expected to bear or pass on to the manufacturer. Clauses 11.1 and 11.2 were therefore unreasonable and could not exclude the section 14 undertakings. Neuberger J added, obiter, that even if BS 4105 contained a suitability term, purely commercial unsaleability caused by public perception, without physical or physiological danger, would not necessarily constitute a breach.

1. Court of Appeal (Civil Division): dismissed Messer’s appeal and upheld the material conclusions of Tomlinson J. The decision is reported at [2002] EWCA Civ 548.
2. Queen’s Bench Division (Commercial Court): Tomlinson J awarded Bass £34,500 as assignee of claims by THP and Brothers, holding that the relevant implied terms applied and that the contractual exclusions were unreasonable. The judgment was handed down on 9 May 2001.