Goods Unfit for Purpose but Account Outstanding

3581

Hi there,

Hoping you can enlighten me on this hypothetical situation.

An electrical contractor purchases €10k of fire alarm equipment from a UKmanufacturer. He installs it correctly, but it malfunctions from day one.Despite the UK manufacturer sending staff members to Ireland on over 10occasions over the subsequent two years, the system is still not operatingcorrectly.

Given that the electrical contractor has not been paid by his customer (theowner of the building) and now wishes to progress the situation, he isconsidering removing the system and installing a competitors one in its place.However, this will involve much rewiring and cost, to make the cabling suitablefor the new system. (Also patching of ceilings etc.)

Let’s assume that the original system he bought can be proven to be unfitfor purpose. But there is a snag - He has not yet paid for the equipmentinvolved. Similarly, the manufacturer has not tried to collect the money fromhim as they knew of the technical issues.

What recourse does this injured party have? Is his case hugely weakened bythe fact that he never paid for the equipment? I.E. sale of goods and supply ofservices act does not apply?

Interested to hear you thoughts.

Thanks

NoQuarter

If there was no system in place at all, and the contractor wanted to install the competitors system, would wiring need to be installed and holes needed to be place in the walls in any event?

3581

It would. The point i'm making is that he installed the original cabling asper the manufacturers specification for this particular system and this is notdirectly compatible with anything else on the market.

NoQuarter

Ah yeah I understand that. The problem in this hypothetical situation is that regardless of whether the cables in place now we compatible or not, if the new system is being installed, new cables etc have to go in anyway and work has to be done anyway.

So, in my opinion, that stops any claim for the original company to pay damages or pay for the installation of the new system.

3581

Ok. What I'm getting at is that he would have incurred a cost in installingthis particular cabling arrangement which will have to be disregarded entirelyif he installs the competitors system.

So if he had installed the competitors system in the first instance, hewould have put in the cabling for that system in the first instance.

I.e. The requirement to re-work cabling, is as a direct result of theequipment failure of the current system.

Thanks for your help.

NoQuarter

Thanks, I understand now.

For starters, the sale of goods act wont apply if this is a business relationship or if the fire alarm was installed for business purposes. For the SOG act to apply, the goods/services must have been purchased from a business and intended for private use.

There are lots of problems in this situation; the contractor never paid for the goods, the contractor is the one who installed the system (presumably the fire alarm company can install it unless not required?), the alarm company werent the ones who drilled the holes and put in the cables etc etc; the time that has passed since the damage; the fact that the UK manufacturer is outside the jurisdiction.

If this was a real situation, I would advise the contractor to seek proper legal advice because there seems to be a lot more to consider here than meets the eye.

234

Ok, for starters, many parts of the 1980 Act do apply to non-consumer transactions; these are mostly Part I which amends the 1893 Act.

Section 14 of the 1893 Act (as amended) provides for implied undertakings as to fitness for purpose and merchantable quality; both of which would be relevant in any scenario similar to the one described.

In terms of remedies the buyer has a right to reject the goods if they breach the terms set out above. Otherwise you are left with an action for damages for breach.

3581

Thanks very much guys for this.