Arcos Ltd v E A Ronaasen & Son [1933]

In Arcos Ltd v E A Ronaasen & Son [1933] AC 470, the court adopted a rigid approach to classifying specifications of goods as conditions, even when it concerned small deviations that did not undermine the fitness of the goods for their intended purpose.

The buyers entered into a contract with the sellers for the purchase of staves of timber wood. The contract specified that the staves should be of Russian redwood and whitewood with a thickness of 0.5 inches. However, upon delivery, a significant proportion of the staves exceeded the specified thickness of 0.5 inches, leading the buyers to reject the staves, asserting that they did not conform to the contractual requirements.

The main issue before the court was whether the deviation from the specified thickness constituted a breach of a condition that would entitle the buyers to terminate the contract. The House of Lords held that the sellers had indeed committed a breach of a condition, granting the buyers the right to terminate the contract. Despite arguments that the staves, while deviating from specifications, were still fit for the purpose of making cement barrels, the court rejected such claims, emphasising the lack of room for flexibility in the contract.

Lord Buckmaster, delivering a key opinion, highlighted the absence of elasticity in the contract and insisted that the only exception for a small deviation would be if the law did not regard it. Lord Warrington disagreed with the arbitrator's decision to add a qualification of commercial equivalence to the description in the contract, further emphasising the strict interpretation adopted by the court.

The approach adopted in this case to classifying specifications as conditions reflects a stringent stance, allowing little tolerance even in cases of minor deviations. It is noteworthy that modern legislation, such as the Sale of Goods Act 1979, has introduced a more flexible approach. Under Section 13 of the Act, there is an implied term that goods must match their description, considered a condition. However, Section 15A of the Act introduces some flexibility, treating breaches as breaches of warranty rather than conditions if they are so slight that it would be unreasonable for the buyer to reject the goods. In contrast to the Arcos case, this allows for a more nuanced consideration of minor breaches in contemporary contract law.
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