This post was contributed by James Devenney, Module Convenor for International Commercial law.
Much has been written about PPE supply-chains during the coronavirus pandemic and one case emerging out of these supply-chains was Local Boy’z Ltd v Malu NV [2021] EWHC 2439 (Comm). That case concerned a contract under which a Belgian company undertook to supply certain face masks (KN95 masks and the Type IIR masks) to a UK company. The buyer then sold those masks to a UK sub-buyer, who in turn sold them to third parties. Ultimately an issue arose as to whether the face masks supplied by the Belgian company breached the Sale of Goods Act 1979, ss.13 (correspondence with description) and/or 14 (satisfactory quality and/or fitness for purpose). More specifically:
- In relation to the Type IIR masks it was argued that the description of the mask was essentially to be found in a photograph supplied to the buyer before the contract was concluded. Moreover, it was argued that these masks did not meet the standards required in Directive 93/42/EEC on Medical Devices nor the EN14683 Standard.
- In relation to the KN95 masks it was argued that it was a condition of the contract that the masks would comply with various regulations/recommendations/standards in relation to PPE.
The learned judge, David Edwards QC, felt unable to grant a summary judgment in relation to the KN95 masks but did enter a summary judgment for the buyers in relation to the Type IIR masks. In so doing he noted:
- Goods could be ‘described’ by a photograph;
- Compliance with description was strict (save for microscopic or negligible deviations).
In relation to the last point, David Edwards QC relied on Arcos Ltd v EA Ronaasen [1933] AC 470 which involved a contract for the sale of wooden staves which were required to be half an inch thick. Although a large number of the wooden staves were one-eighth of an inch smaller, they were still perfectly suitable for the intended use. The court nevertheless held that there was a breach of s.13 and so the buyer could reject the staves and get its money back. Some would criticise Arcos as being too strict and as allowing a buyer to undo a contract on a technicality. Others would argue that from the point of view of certainty there is much to be said for such an approach, particularly in the commodity markets (see Fox et al., Text, Cases and Materials on Commercial Law 2020, p.403).
Interestingly a more generic approach seemed to have been adopted post-Arcos (meaning that not all descriptive words intended to be contractual in nature come within s.13), although Arcos Ltd v EA Ronaasen was never overruled. Thus, in Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441, at 503, Lord Diplock stated (emphasis added):
The ‘description’ by which unascertained goods are sold is, in my view, confined to those words in the contract which were intended by the parties to identify the kind of goods which were to be supplied. It is open to the parties to use a description as broad or narrow as they choose. But ultimately the test is whether the buyer could fairly and reasonably refuse to accept the physical goods proffered to him on the ground that their failure to correspond with that part of what was said about them in the contract makes them goods of a different kind from those he had agreed to buy. The key to section 13 is identification.
Lord Diplock
In emphasising Arcos, Local Boy’z Ltd v Malu NV [2021] EWHC 2439 (Comm) perhaps provides a reminder that context is important (here PPE requirements in the midst of a pandemic).