The Sale of Goods Act 1979, s. 14(2) provides that, where goods are sold in the course of a business, there is an implied condition that the goods supplied under the contract shall be of merchantable quality. Section 14(6) then provides that: “Goods of any kind are of merchantable quality within the meaning of subsection (2) above if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to any description applied to them, the price (if relevant) and all other relevant circumstances.” This definition was first introduced by the Supply of Goods (Implied Terms) Act 1973, s. 7(2).

There was no definition of merchantable quality in the Sale of Goods Act 1893 but, clearly, the test of merchantability was originally designed for the business community to have a broad meaning of “commercially saleable” in sales of unascertained goods by description. It appears that there were no problems with the definition and understanding of this concept in the 19th century and in Jones v. Just 3 Blackburn, J., found it unnecessary to give the jury any direction as to its meaning. Furthermore, in Cehave N.V. v. Bremer Handelsgesellschaft m.b.H. (The Hansa Nord), Roskill, L.J., said:4

It is clear from the cases since 1893 that the law has always tried to reach a compromise between two extreme propositions: first, that goods be merchantable for every purpose for which they could be used, and, secondly, that they be merchantable for any one of those purposes. The first proposition is too harsh on any seller of goods and the second too detrimental to any buyer. In Henry Kendall & Sons v. William Lillico & Sons Ltd.5 (on appeal from Hardwick Game Farm v. S.A.P.P.A.) the House of Lords considered all the relevant authorities and two tests of merchantability emerged. The first was whether a reasonable buyer who