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Arcos v EA Ronaasen & Son [1933] AC 470

Contract Law – Terms

Arcos v EA Ronaasen & Son [1933] AC 470 is a key case within the contract law degree module for university LLB degree courses. The case concerns the use of terms for the formation of a contract.

Facts:

Buyers from England concluded a contract to purchase wooden staves from the English agents of a Russian company. The staves would be used to make barrels, the buyers specified that they must be half an inch thick. Upon delivery the buyer rejected the order due to the staves being too thick and not fit for purpose. Arbitration then found the delivered staves to be commercially viable and therefore fit for the purposes of making the barrels. The arbitration stated the buyer could not reject the order.

Issue:

Did the buyer have the right to reject the order due to not fitting specifications drafted in the contract terms? This being regardless of the staves being commercially viable under the contract description.

Held:

The court decided against the decision made in arbitration. A buyer within a contract has the right to reject goods that do not match contractual specifications regardless of being commercially viable. Instead, goods must conform to contractual specifications under this case. Furthermore, it is an unfair term to state that goods delivered are qualifiable as meeting requirements if they are commercially equivalent to the original specifications, unless expressly stated otherwise.

As the contract expressly specified the thickness of the wood the seller was under a contractual obligation to meet this requirement. The buyer had the right to reject the order.

OSCOLA reference this article/case: Lawlessons, ‘Arcos v EA Ronaasen & Son [1933] AC 470 1) LR 6 QB 597‘ (LawLessons, 10th August 2021) <https://lawlessons.co.uk/arcos-v-ea-ronaasen-son-1933-ac-470> accessed 10th July 2022

Published inTerms & Unfair Terms
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