Area Solutions & Anor v Tasty Wok Ltd & Anor

Contract formation is determined objectively. A party’s private belief, or a pleading assertion about the contracting party, carries little weight unless supported by the objective circumstances. Where quotations are accepted without clear indication that an agent contracts for a company, acceptance may be treated as made by the individual in his own capacity.

Under Sale of Goods Act 1979, s.14(3), goods must be reasonably fit for the purpose made known to the supplier. Slip-resistance may be assessed by appropriate technical standards and expert evidence even where no legally prescribed UK standard exists. A claimant who supplies floor tiles knowing their intended commercial environment is liable where the tiles are objectively unsuitable, and damages may be awarded for reasonable remedial costs without proof of an accident.

The claim concerned refurbishment work for a Chinese restaurant. The second claimant sought payment of unpaid invoices. The defendants asserted a set-off arising from allegedly defective floor tiles supplied and laid in the restaurant and kitchen.

The issues were whether the contracts had been made with the first defendant company or the second defendant personally, whether the tiles were reasonably fit for their intended purpose under Sale of Goods Act 1979, s.14(3), and the appropriate damages. The parties agreed that the principal claim was payable subject to the set-off and that the counterclaim should be dismissed.

1. Contracting party. The identity of the contracting party was an objective question. The claimant’s pleadings and the parties’ subjective beliefs did not determine it. The quotations and surrounding documents did not show that Mr Chan accepted them on behalf of Tasty Wok Ltd. The contracts made between January and April or May 2002 were therefore contracts with Mr Chan personally.
2. Fitness for purpose. The claimant knew that the tiles were required for restaurant and kitchen floors and had a contractual obligation to supply and lay non-slip Grade 5 tiles, or equivalent. Grade 5 concerned hardness and did not establish slip-resistance.
3. The absence of a legally prescribed UK standard did not prevent an objective assessment. The DIN standard and the 1998 Tile Association report, interpreted with the assistance of expert evidence, provided reliable guidance. The kitchen required an R rating of 12; the supplied tiles had ratings of 9 or 11. The restaurant required at least R10; its tiles had an R rating of 9. Both were unsuitable.
4. The claimant was therefore in breach of Sale of Goods Act 1979, s.14(3). The defendants were entitled to damages for breach of contract. It was unnecessary to await an accident before awarding damages, and the late assertion of the tile defects did not alter the objective question of breach.
5. The reasonable remedial measure was the estimated cost of supplying and overlaying replacement tiles, assessed at £9,034. That sum was set off against the claimant’s principal claim. Judgment was entered for the second claimant in the sum of £31,617.36, subject to the set-off, and the counterclaim was dismissed.