NATURE OF FIBR E SPECIFIC ATION: A C ONDITION,

WARR ANTY OR AN INNOM INATE TER M ?

“An intermediate- looks to the effect of breach and determines whether innocent party is
Innominate deprived of substantially the whole benefit of the contract”
Term

Tradax v Goldschmidt SA [1977] 2 Ll. Rep. 604

• Provision as to impurities was not part of the description of the goods so
there was no implied condition under s. 13 of the Sale of Goods Act, 1893,
that entitles the Seller to reject goods, on non-compliance.
• Any condition implied by s. 14 of the Sale of Goods Act, 1893, was not
relied on.
• Absence of any clear agreement or prior decision to construe impurities as a
condition
Leaning towards provision as to impurities as an intermediate
term.
Contd.
 COURT’S VIEWS ON QUALITY FINAL
CERTIFICATE AND THE RIGHT TO REJECT GOODS

Referred to “The Hansa Nord (1975)

• In absence of Quality Final Certificate, breach as to impurities would entitle claim
of damages, and not rejection of goods by the Buyer.
• The buyers here had to consider whether the breach established by the quality
final certificate was substantial and serious or went to the root of the contract or,
whether it was of such a kind that they should have been satisfied with the price
adjustment.

Referred to findings by The Board of Appeal

• Suggest that this kind of deviation in quality does not entitle the Buyer to reject
the Quality Final Certificate or the goods.

Judge held that deviation in quality found in Quality Final Certificate does not
automatically allow the Buyer to reject the goods.
 IS FIBRE CONTENT A DESCRIPTION
OF GOODS?
Buyer contended fibre content is a part of description of goods, hence a an implied
condition. Seller contended it is a warranty under clause 5 of GAFTA 119. Seller
alternately claimed, it is an intermediate term.

Buyer relied on the decision of Bingham J in Tradax Export SA v

European Grain & Shipping Ltd [1983] 2 Lloyd's Rep 100.
Sale of “Goods in bulk U.S.A. solvent extracted toasted soya bean meal –
maximum 7.5% fibre”. Bingham J considered the contract term “maximum
7.5% fibre” as a condition, as it appeared next to the Description of Goods.

Court noted that the Board had not explored whether fibre content term is a Description.
Disagreed with the Board that breach of quality gives right to reject goods.
 COURT’S SUMMARY

Parties agreed to remit the matter of quality as a condition,

warranty or innominate term to the Board.

Court also urged the Board to review whether-

• The breach meant goods were not of merchantable quality,
and
• If Buyer has no right to reject, then what damages would
serve their purpose.
Contd.