J & H Ritchie v. Lloyd Ltd  (2007)

 

The claimant purchased a combined drill and power harrow from the defendant. The agricultural equipment was found to be defective and it was returned to the defendant for investigation and, if possible, repair. The claimant was then told that repairs had been carried out and the equipment was ready for collection but the defendant refused to disclose what the problem had been.  Later the claimant discovered that the fault had arisen because bearings had been missing from the equipment. Armed with this information the claimant then rejected the goods because they were concerned that, by using the equipment before the problem arose, other parts might have been damaged.

 

The Court of Appeal decided that because the purchaser had elected for investigation and repair it was too late to reject the goods. The decision of the Court of Appeal has been overturned by the House of Lords. The court recognised that the Sale of Goods Act did not adequately legislate for circumstances where parties seek an informal way to remedy defects. To get around this problem the House of Lords treated the parties as having entered into a separate contract for investigation and repair. A term was then implied into that contract that whilst the seller was making investigations and/or repairing the goods the purchaser could not rescind the contract. Once investigation and repair was complete the buyer could decide whether to accept the goods and the right to reject would then be lost.   The buyer’s election could not be made until he had the information necessary to make an informed choice. 

 

It follows that a buyer, who allows the goods to be taken away for investigation and repair, can insist on being told what the outcome of the inspection is.

 

For more information contact Simon Leach

simon.leach@loxleylegal.com   DDI: 01453 700622