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George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd
Encyclopedia
George Mitchell Ltd v Finney Lock Seeds Ltd [1982] EWCA Civ 5, [1983] 2 AC 803 is a case on the sale of goods and exclusion clauses. It was decided under the Unfair Contract Terms Act 1977
and the Sale of Goods Act 1979
.
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 (254,952.2 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.
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.
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.
Unfair Contract Terms Act 1977
The Unfair Contract Terms Act 1977 is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most important functions is limiting the applicability of...
and the Sale of Goods Act 1979
Sale of Goods Act 1979
The Sale of Goods Act 1979 is an Act of the Parliament of the United Kingdom which regulates English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidates the original Sale of Goods Act 1893 and subsequent legislation, which in turn had codified and...
.
Facts
Finney Lock Seeds Ltd agreed to supply George Mitchell (Chesterhall) ltd with 30lbsPound (mass)
The pound or pound-mass is a unit of mass used in the Imperial, United States customary and other systems of measurement...
of Dutch winter cabbage
Cabbage
Cabbage is a popular cultivar of the species Brassica oleracea Linne of the Family Brassicaceae and is a leafy green vegetable...
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 (254,952.2 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
Unfair Contract Terms Act 1977
The Unfair Contract Terms Act 1977 is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most important functions is limiting the applicability of...
, 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
Mark Waller (judge)
Sir George Mark Waller is the Vice-President of the Civil Division of the Court of Appeal of England and Wales.Waller was educated at Oundle School and read law at Durham University before being called to the Bar in 1964 and is a Bencher at Gray's Inn. He became a Queen's Counsel in 1979, and was...
made submissions for Finney Lock Seeds.
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 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 LJPeter Oliver, Baron Oliver of Aylmerton
Peter Raymond Oliver, Baron Oliver of Aylmerton PC, QC was a British judge and barrister.Oliver was born in Cambridge, where his father, David Thomas Oliver, was a professor of law and Fellow of Trinity Hall, Cambridge. He was educated at The Leys School, Cambridge and Trinity Hall, Cambridge,...
and Kerr LJ
Brian Kerr (Judge)
Brian Francis Kerr, Baron Kerr of Tonaghmore, PC, is a Justice of the Supreme Court of the United Kingdom and former Lord Chief Justice of Northern Ireland.-Early life:...
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
Supply of Goods (Implied Terms) Act 1973
The Supply of Goods Act 1973 was an Act of the Parliament of the United Kingdom that provided implied terms in contracts for the supply of goods and for hire-purchase agreements, and limited the use of exclusion clauses...
(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.
House of Lords
Lord BridgeNigel Bridge, Baron Bridge of Harwich
Nigel Cyprian Bridge, Baron Bridge of Harwich PC was a British barrister and judge. Bridge was the presiding judge at the trial of the Birmingham six in 1975, the verdict of which was quashed by the Court of Appeal in 1991, and he later served as a Law Lord.-Early and private life:Bridge's father...
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.