Express 'fitness for purpose' terms



An express fitness for purpose warranty or condition requires interpretation of the contract and the surrounding circumstances to determine its extent and application. The intended purpose of the work or the goods should be properly identified. The purpose of the relevant work should be clearly stated in an objectively measurable way. This may be with reference to drawings, specifications and/or project requirements.

Where an express fitness for purpose warranty or condition is drafted broadly, effectively 'covering the field', a court may limit its scope and implication. A fitness for purpose warranty is not an insurance policy.


CASE STUDY



Barton v Stiff

[2006] VSC 307



Facts


  • Barton entered into a contract with the Stiffs to build a house on their property.
  • The contract stated that the house was required for the purpose of a residence.
  • Barton used general purpose clay bricks which over time had been damaged by the salty groundwater on the land.
  • The Stiffs claimed that the bricks used by the builders below the damp proof course were not suitable for the purpose for which they were used.

Result


  • It was contended that the express warranty in the contract was broadly worded so as to give rise to liability where the bricks were adversely affected by 'highly unusual' salty groundwater in the land.
  • The court concluded that to interpret the express warranty as broadly as contended 'would be tantamount to finding that the contract provided for the builders to be insurers of the house (Barton v Stiff [2006] VSC 307 at 39) and that the parties could not have intended this.

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