Motor Finance legal commentator Greg Standing has
highlighted concerns for dealers and lenders over fitness for
purpose, following a recent Court of Appeal case which focused on
the statutorily implied term about the fitness for purpose of
goods.
In BSS Group PLC v Makers (UK) Ltd (t/a Allied
Services), BSS purchased a plastic piping system from Makers. The
court held that BSS had, by implication, made it known to Makers
that valves it also needed to buy for the same project needed to be
compatible with the pipes.
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The court held that Makers knew all it needed
to know in order to exercise its skill and judgment as to whether
the valves supplied were compatible. They were not and therefore
they were not fit for purpose.
The important point for motor finance
companies is that buyers only need to make the dealer aware of the
purpose for which the vehicle is supplied to fix the finance
company with this knowledge. In the usual course of events, the
dealer, and not the finance company, deals with the buyer. If the
buyer rejects the vehicle as unfit for purpose he or she will have
to bring a claim for damages against the finance company in order
for that rejection to be effective. If that happens, says Standing,
the dealer may well then find itself on the end of a claim for an
indemnity from the finance company.
Greg Standing’s article appears in the
September issue of Motor Finance.
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