BetterLawNotes-5 (2)

CONTRACT LAW

Cato runs a fish and chip restaurant. Dan is a supplier of kitchen equipment. Over the years, Dan has supplied numerous pieces of equipment to Cato. On each occasion, Cato receives an invoice from Dan a week or so before delivery or installation is due, requesting payment. At the foot of Dan’s invoices are printed the following clauses:

‘1. All equipment is installed at the customer’s own risk.

2. Unless Dan is otherwise notified in writing within seven days of the date of installation, the equipment shall be deemed for all purposes to be of satisfactory quality and fit for its intended purpose.

3. Without prejudice to the foregoing, Dan’s liability for loss or damage arising from the breach of any warranty implied by the Sales of Goods Act 1979 shall not exceed the amount of this invoice.’

On 1st June, Dan agrees to supply Cato with a new deep fat fryer and install it in the restaurant kitchen for £15,000. The installation is to take place on 1st July. On 24th June, Cato receives an invoice from Dan. Dan’s standard terms appear at the foot of the invoice. Cato settles the invoice by return of post.

On 1st July, while Dan is installing the fryer, he carelessly lets it fall on Cato’s foot. Cato is in great pain for the following month and spends £1,000 on private medical care so as to ensure that he is able to keep working at the restaurant.

On 1st August, the new fryer explodes. It turns out that the fryer contained a hidden defect which neither Dan nor Cato could reasonably have discovered prior to the explosion. The explosion causes £20,000-worth of damage to the kitchen. The fryer itself is damaged beyond repair.

Advise Dan on his liability to Cato for breach of contract.

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