Lloyd's Maritime and Commercial Law Quarterly
SATISFACTION GUARANTEED? THE (NON-)SIGNIFICANCE OF A WARRANTY FOR THE ASSESSMENT OF CONFORMITY
Lamarra v. Capital Bank
It is a debated point at which time goods must be of satisfactory quality in order to fulfill the requirements of the Sale of Goods Act 1979, s 14(2). Different standards may be applied depending on the type of contract, especially where property and risk do not pass at the same time.1
Nevertheless, in consumer sales it seems established that, since risk now passes only on delivery of the goods whether or not the property has passed, the standard must be fulfilled at the time of delivery.2
One may wonder, however, whether this rule should be strictly applied also in cases where defects are minor and there is a warranty in place under which the seller is willing to cure the non-conformity. In these circumstances should the time of delivery still be adhered to as the time for assessment of satisfactory quality? Or should a wider standard be adopted in order to prevent rejection for defects that are easily remediable?
That a strict approach to the conformity question remains preferable in consumer sales is confirmed by the decision of the Inner House of the Scottish Court of Session in Lamarra
v. Capital Bank Plc
.3
The case is technically one of hire-purchase but the issues at stake are of general importance also in sale of goods cases and, to the extent that statutory rules are invoked that apply in the United Kingdom as a whole, the case is also significant for England and Wales. The main point at issue in the case is the significance of a warranty as a factor in determining whether goods are of satisfactory quality. Furthermore, attention is paid to the question whether the fact that a party has behaved reasonably or unreasonably may affect the availability of remedies to him, and to the standard of protection for minor defects in consumer cases. The court’s decision clearly promotes consumer protection in clarifying the standards that are to be used in relation to each of these issues and it is thought to provide a sensible model for future cases.
The object of the dispute between the parties was a car obtained by Mr Lamarra under a hire-purchase contract with Capital Bank Plc. The vehicle, a top of the range Range Rover with a purchase price of £51,550, suffered from a number of defects at the time of delivery. The sheriff found that the following had been present: a vibration due to a fault in the balancing of the wheels and steering pull; road speed related noise emanating from the transmission/drive system; a scratch on the lid of the ashtray and a missing navigation disk (both of which Mr Lamarra was aware of at the time); a misalignment of the
1. See AG Guest (ed), Benjamin’s Sale of Goods
, 7th edn (Sweet & Maxwell, London, 2006), [11-049].
2. Ibid
.
3. [2006] CSIH 49; 2006 SLT 1053.
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