What are the legal effects of delivering goods of poor quality under CIF contract?

The Client applied to Interlegal for analysis of potential consequences of delivering mineral fertilizers of poor quality in the framework of CIF contract. Our law team has drafted the relevant legal opinion and provided the necessary comments and recommendations.

While preparing legal advice, we highlighted several key aspects regarding supply of the goods of poor quality under English law.

Legislation governing quality is set out in the English Sale of Goods Act 1979 (SoGA 1979).

Article14 of this law contains two conditions (implied terms):

- the goods should be of satisfactory quality (Article 14(2)) and

- the product should correspond to its purpose (Article 14(3)).

The first condition states, inter alia, that the goods shall be treated as of satisfactory quality if they meet the standard. Here it is important to refer (in general) to the goods description, the price (if applicable) and all other relevant circumstances.

Regarding the condition of compliance with the appointment - Article 14(3) of the English Sale of Goods Act1979 states: “Where the seller sells goods in the course of business and the buyer directly or indirectly states to the seller a particular purpose for which the goods are being purchased, there is a condition that the goods supplied under the contract, should be fit for that purpose, regardless of whether this is the purpose for which the goods are ordinarily supplied, unless the circumstances show that the buyer does not rely, or that it would be unreasonable to rely thereby on the seller's qualifications or judgment...”.

According to Article 13(1) of the English Sale of Goods Act 1979, “In the presence of the goods sale and purchase contract, description shall mean a condition that the goods will conform to description”.

Therefore, full understanding between the seller and the buyer at the moment of entry into the goods sale and purchase contract will be the key to a successful business and will minimize the occurrence of disputes.

Therefore, with regards to the outlined aspects of legislation, it is important to emphasize that quality and suitability of the goods are key aspects of successful trade. The fact of detecting the goods delivery of poor quality may cause breach of the contract and may raise legal disputes between the parties. Therefore, it is important to study terms of the contract carefully before entry into, as well as to control quality of the goods in the process of their delivery for avoidance of potential negative consequences.

In case of additional questions, our team of professional lawyers is always ready to help.

Interlegal junior lawyer Larysa Karakach, managed by partner Oleksiy Remeslo , provided legal advice.