Claimant Acted Reasonably in Rejecting Supplier’s Proposal to Modify Faulty Product

27 August 2013

Peterg

Usually the process of returning a faulty product to the suppliers is simple. However this process becomes much more complex if the relationship between the buyer and supplier has broken down. In Manton Hire & Sales Ltd v Ash Manor Cheese Co Ltd, the Court of Appeal asked the vital question of whether a buyer can refuse an offer to correct the fault and still claim all its losses.

Manton supplied a fork lift truck to Ash.   Manton had attended Ash’s premises, listened to Ash’s requirements, had taken measurements and recommended two models that could be suitable. In reliance on this advice by Manton, Ash entered into a finance agreement and the finance company bought the truck from Manton and let it to Ash. Manton had listened to Ash’s requirements but the truck was not right, as the truck turned out to be of unsuitable dimensions.  Manton refused to uplift the truck and proposed another solution instead. Ash was concerned that Manton’s solution would not be safe or comfortable, so rejected it.  The parties fell out and Manton thought Ash had been unreasonable.  Ash paid the full amount due to the finance company and claimed an indemnity from Manton.  The question arose whether Ash had been right to reject what Manton had offered.

The Court found that the answer to this question depends on the individual circumstances. The court will consider the nature of the proposals to try and rectify the situation by the supplier and also whether the buyer acts reasonably in rejecting the supplier's proposals. 

Although there was a potential modification to the product, the exact extent was not clear. Manton had not provided detailed plans or specifications.  The Court felt that it would be unusual in commercial cases for it to be reasonable to refuse a proper offer of rectification by a supplier on the basis of the harm which the supplier has already caused. But on the other hand if the supplier only makes an unclear offer to modify the product then a buyer will not be made to accept such an offer; the standard of reasonableness is not high in view of the fact that the defendant is an admitted wrongdoer.

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