Tag: fitness for purpose

The term “fitness for purpose” arises from the Sale of Goods Act 1979 and it was amended by the Sale and Supply of Goods Act 1994 which implicitly imposes conditions for every seller of goods when performing business. This contains a statement that the provided goods will be of satisfactory quality and, where the buyer demands a specified purpose, are reasonably fit for their intended purpose.

The seller’s consent on this clause declares that it is guaranteeing that the design will be compatible with the terms claimed by the buyer. This highlights that, the only duty of the buyer is to prove that the completed work is not working properly as it should. However, it is not necessary to demonstrate that the design has been negligent.

The parties should be aware of the existence of the term of the contract which states the buyer’s purpose. When this issue is unclear, the intended purpose will usually be evaluated by the court or arbitrator in regard to the facts. This puts an extra liability on the seller to add a stated purpose   or buyer’s requirements and then to verify them to ensure that the purpose is defined in a clear way.

 

A fitness for purpose obligation may be implied into a contract where the seller has the obligation to provide the goods which should be fit for that specified purpose. If the seller refuses or will be unable to provide fitness for purpose in the work, he/she should expressly exclude fitness for purpose in the contract.

Where the fitness for purpose risk is excluded in the contract, then the seller will have the lower obligation of reasonable skill and care on the works. In the event that the parties agree on dividing the risk of the work being unfit with the agreed terms and conditions to reflect the risk taken amongst the parties in respect of uninsured losses, the seller can agree to be liable to perform the work or to provide the other losses arising from this breach.

In the event of lack of an express or implied fitness for purpose obligation, the seller’s performance must be in compliance with a reasonable skill and care which means that the work must be compatible with the standard of competent professional seller. In this event, the buyer should prove that the seller has been neglectful by showing that the work fails to be compatible with the standard of competent professional seller.

Revocation of contract is possible if the provided work is not consensual with the intended purpose of the buyer. Compensation claim of the buyer in accordance with general rules is also reserved.

Besides, in compliance with the article 35 of the United Nations Convention on Contracts for the International Sales of Goods the seller should supply the goods in the quality, quantity and description stated in the contract.