Here is the story. Mr Kelly, an entrepreneur, went into property. He decided to convert an old convent school in north Devon into a block of 12 flats. He bought and installed 12 electric boilers from Jewson. The sales bumf was persuasive; the boilers were ideal for a flat or house, especially when there was no gas main. The boilers were very good. But he found out later that the Building Inspectorate required the heating system to meet SAP ratings. I'd never heard of all this SAP stuff, nor had the boiler maker, nor Jewson, nor the developer.
The "standard assessment procedure" gives an energy rating to your dwelling. The energy efficiency of the heating system adds or subtracts to that rating. Unfortunately the overall SAP rating came out under par. Mr Kelly landed on that as the reason his flats didn't sell. He blamed Jewson and built up a claim, which at one stage came to £450,000. Mr Kelly's first hurdle, however, was to show that the boiler sale was the root cause of his loss.
Now let me get a little technical. The Sale of Goods Act 1979 contains a number of promises that are implied automatically into the purchase. The act was amended in 1995 by the Sale & Supply of Goods Act. The Jewson case usefully clarifies the meaning of this amendment. It is intended to set out tests for substandard goods. There are two key parts I want to talk about. The first is unsatisfactory quality. Is there anything wrong with the stuff? The second is all about the goods not doing what you expected them to.
So, there you are at the counter and you ask for a dozen boilers, or a dozen screws or whatever.
The temptation is to argue that since the supplier has provided the product, it has somehow become the guardian of the purchaser
If the boiler doesn't boil or the screw doesn't screw, you have unsatisfactory quality. But, what if you asked for information about the boilers or the screws? What if you were told that the gizmos complied with all relevant regulations and legislation? This is all to do with the notion of "fitness for purpose".
There are, if you like, two fitnesses for purpose. The first is being fit for ordinary use. This is the intrinsic quality. That is, a standard that a reasonable person would regard as satisfactory. It includes asking yourself about the predictable use of the goods. But then there is another type of buyer. It is the fellow with a "personal agenda". This is a second variety of fitness for purpose. And now you might see Mr Kelly's dialogue with Jewson coming into play. Did he make known his particular purpose? And did he rely on the skill and judgment of Jewson?
The judge in the first trial was satisfied that Mr Kelly had made known how and where he intended to use the boilers. Satisfied, too, that he had relied on what Jewson told him. That was said to be enough to pin liability. But the Court of Appeal spotted that Mr Kelly had not actually relied on Jewson to select suitable boilers for him. He had had access to advice of his own.
Too little attention had been paid at trial to the possibility that there might have been only partial reliance on Jewson. The fact was that a considerable amount of information would be required if Jewson was to advise on SAP ratings. Surely, if the buyer's needs were insufficiently communicated, the buyer could not reasonably rely on the seller's skill and judgment to ensure the goods answered to those needs.
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on firstname.lastname@example.org.