A seedsman sought to rely upon an exclusion clause preventing any claim by a purchaser by way of set off against its sales invoices. The House was asked whether a contractual term was ‘fair and reasonable’ within the meaning of section 55 of the Sale of Goods Act 1979.
Held: Where a tribunal applies a standard with a greater or lesser degree of imprecision and takes a number of factors into account, there will be cases in which it will be impossible for a reviewing court to say that the tribunal must have erred in law in deciding the case either way.
Lord Bridge of Harwich said: ‘The decisive factor, however, appears from the evidence of four witnesses called for the appellants, two independent seedsmen, the chairman of the appellant company, and a director of a sister company (both being wholly-owned subsidiaries of the same parent). They said that it had always been their practice, unsuccessfully attempted in the instant case, to negotiate settlements of farmers’ claims for damages in excess of the price of the seeds, if they thought that the claims were ‘genuine’ and ‘justified.’ This evidence indicated a clear recognition by seedsmen in general, and the appellants in particular, that reliance on the limitation of liability imposed by the relevant condition would not be fair or reasonable.’ and ‘There will sometimes be room for a legitimate difference of judicial opinion as to what the answer [under s 11] should be, where it will be impossible to say that one view is demonstrably wrong and the other demonstrably right. It must follow, in my view, that, when asked to review such a decision on appeal, the appellate court should treat the original decision with the utmost respect and refrain from interference with it unless satisfied that it proceeded upon some erroneous principle or was plainly and obviously wrong.’ A decision as to reasonableness is akin to the exercise of a discretion.
Judges:
Lord Bridge of Harwich
Citations:
[1983] 2 AC 803, [1982] 1 All ER 108
Statutes:
Unfair Contract Terms Act 1977 11, Sale of Goods Act 1979 55(4)
Jurisdiction:
England and Wales
Citing:
Appeal from – George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd CA 29-Sep-1982
The buyer bought 30lbs of cabbage seed, but the seed was not correct, and the crop was worthless. The seed cost pounds 192, but the farmer lost pounds 61,000. The seed supplier appealed the award of the larger amount and interest, saying that their . .
Cited by:
Cited – Schenkers Limited v Overland Shoes Limited and Schenkers International Deutschland Gmbh v Overland Shoes Limited CA 12-Feb-1998
A clause in a shipping freight contract using the standard British International Freight Association terms disallowing a set-off was not unreasonable. The clause read ‘The customer shall pay to the company in cash or as otherwise agreed all sums . .
Cited – Watford Electronics Ltd v Sanderson CFL Ltd CA 23-Feb-2001
The plaintiff had contracted to purchase software from the respondent. The system failed to perform, and the defendant sought to rely upon its exclusion and limitation of liability clauses.
Held: It is for the party claiming that a contract . .
Approved – Overseas Medical Supplies Limited v Orient Transport Services Limited CA 20-May-1999
The appellant challenged a finding that it was responsible for the loss of medical equipment being transported from Tehran to the UK, and of failing to insure it as required, the contractual term exempting it from responsibility being an . .
Cited – Regus (UK) Ltd v Epcot Solutions Ltd CA 15-Apr-2008
The appellant had contracted to provide office accomodation to the defendant. The air conditioning did not work and there were other defects. The appellant now challenged a finding of liability and that its contract terms which were said to totally . .
Cited – Bracknell Forest Borough Council v Green and Another CA 20-Mar-2009
The council sought possession of the property saying that the three bedroomed property was underused by the tenant and his sister. The respondents said that it was not too extensive, and that no satisfactory alternative accommodation had been . .
Cited – Cleaver and Others v Schyde Investments Ltd CA 29-Jul-2011
The parties had contracted for the sale of land. The purchaser secured the rescinding of the contract for innocent misrepresentation. A notice of a relevant planning application had not been passed on by the seller’s solicitors. The seller appealed . .
Cited – Hodges v Aegis Defence Services (BVI) Ltd CA 12-Nov-2014
Appeal against dismissal of claim with costs. The claimant was personal representative of her husband’s estate. He had been employed by the defendants to provide support and security escort to US personnel based in Iraq under a contract for . .
Lists of cited by and citing cases may be incomplete.
Contract, Consumer
Updated: 08 April 2022; Ref: scu.185991