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George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd

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George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd

George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd [1982] Sale of Goods Act 1979.

Facts

Finney Lock Seeds Ltd agreed to supply George Mitchell (Chesterhall) ltd with 30lbs of Dutch winter cabbage seed for £192. An invoice sent with the delivery was considered part of the contract and limited liability to replacing ‘any seeds or plants sold’ if it were defective (clause 1), and excluding all liability for loss or damage or consequential loss or damage from use of the seed (clause 2). 63 acres (250,000 m2) of crops failed, and £61,513 was claimed for loss of production.

The two main issues in the case were, first, whether the limitation clause should be interpreted to cover the seeds actually sold, given that the seeds were wholly defective and did not do a seed's job at all; and second, whether under the Unfair Contract Terms Act 1977, s 2(2) the limitation was reasonable (s 11).

In the House of Lords, Leonard Hoffmann QC and Patrick Twigg made submissions for George Mitchell and Mark Waller QC made submissions for Finney Lock Seeds.

Judgments

High Court

Parker J [1981] 1 Lloyd’s Rep 476 held that what was sold was not seed at all and did not look at the statute. On the basis that clause 1 said 'any seeds or plants sold' he held that what was sold could not be considered seeds (because they simply did not work) and therefore the exclusion in clause 2, which was attached to what was sold in clause 1 had no effect.

Court of Appeal

Lord Denning MR dissented[1] on reasoning from his colleagues and argued the clause did apply to limit liability for the seeds sold, even if the seeds were defective. Oliver LJ and Kerr LJ held the limitation clause did not apply because, like Parker J, they held that what was sold was not seed. All agreed that the clause was invalid under the Supply of Goods (Implied Terms) Act 1973 (see now s 55 SGA 1979 and UCTA 1977) because it was unreasonable.

In a memorable passage, and his last ever judgment, Lord Denning MR outlined the problem of the case in this way.[2]

House of Lords

Lord Bridge gave the leading judgment. He agreed with Lord Denning MR that clause 2 applied to the seeds in question, and that it was a "strained construction" (following Lord Diplock's dicta in Photo Production Ltd v Securicor Transport Ltd [1980] AC 827) to say otherwise. At 810 he said,

On the question of the term's fairness, Lord Bridge held,

On the question of fairness here, the decisive evidence was that witnesses (for the seedsmen) had said the industry’s practice had always been to negotiate damages claims if they seemed genuine and justified. This was clear recognition that the relevant condition would not be fair or reasonable.

See also

Notes

References

External links

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