Successful Exclusion Of Implied Terms For Goods

The High Court in Air Transworld Ltd v. Bombardier Inc.¹ ruled that an exclusion clause that did not expressly refer to the word "conditions" was nevertheless successful to exclude the conditions implied into a sale of goods under the Sale of Goods Act 1979 (England). In a dispute over the condition of an executive aircraft at the time of delivery from the manufacturer, the High Court ruled that the exclusion clause was clear that all the seller's obligations and liabilities were to be found exclusively in the contract, and that general wording excluding obligations implied by law was sufficient to exclude the conditions implied by the Sales of Goods Act. Mr Justice Cooke rejected arguments that the relevant contract provision as an exclusion clause should be construed contra proferentem, with the result that any ambiguity should be determined in favour of the plaintiff/claimant.

The plaintiffs claim alleged that the aircraft did not correspond with description, was not of satisfactory quality and was unfit for purpose within the meaning of the Sale of Goods Act (ss. 13 &14)("SGA"). The defendant relied on the terms of the contact excluding liability under statute and replacing it with a set of contractual warranties.

The judgement takes us through a line of English authorities, the effect of which is that liability cannot be excluded for a breach of a condition implied by the SGA by exclusions which refer merely to "warranty" or "guarantee", even if those words are cross-referenced to statues or rules of law, which would otherwise give rise to an implication of such terms. The authorities required any term excluding a condition implied by...