Sovereign Finance Limited v Silver Crest Furniture Limited., Keith Maher, David Howarth, Christopher Paine, Nelson Kerr, Mrs Kerr
QBD 26 February 1997 (Trading Law Reports July - August 1997)

The Kerrs had delivered and installed a machine for shrink wrapping products to Silver Crest Limited. Sovereign Finance purchased the machine from the Kerrs and supplied it to Silver Crest on a hire purchase agreement. Maher, Howarth and Paine, who were supporting Silver Crest, gave personal guarantees to Sovereign.

Silver Crest fell behind with the payments and Sovereign terminated the agreement and issued proceedings to recover sums due. After judgement, Silver Crest went into liquidation. Keith Maher continued to fight the case and counter-claimed against Sovereign claiming that the goods were not of satisfactory quality or fit for their purpose. Sovereign therefore sued the Kerrs who had supplied the product.

This hearing dealt with the preliminary issue of whether Sovereign could rely on clause 1.9 of their terms which excluded implied terms:

Acknowledgement and indemnity

(A) The hirer acknowledges that:

1.    The goods are required for the purpose of a business carried on by him, were selected by him and acquired at his request by the company for the purpose of this agreement from the supplier;

2.    In selecting the goods the hirer does not rely on the skill or judgement of the company but on his own or that of the supplier;

3.     Save for the extent that any statutes may provide otherwise, the supplier is not the agent of the company;

4.     Acceptance by the hirer of delivery of the goods is conclusive proof that the hirer is satisfied that they are in all respects in good working order and in conformity with the hirer's requirements;

5.     The delivery of the goods by the company depends on the supplier of the goods fulfilling its obligation to supply and the company shall not be liable for any delay in the delivery of the goods howsoever caused or arising.

(B) As the goods have been selected by the hirer and have not been inspected by the company, the company does not make or give any representation, warranty, stipulation or undertaking, express or implied, by statute, common law or otherwise, as to the age, state, quality or performance of the goods or their correspondence with description merchantable quality or their fitness for any particular purpose."