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Flaux J agreed with the Tribunal’s reasoning that the words “as she was” used in the first sentence of cl.11 of the MOA were a necessary part of a sentence that was recording the obligation to deliver the vessel in the same condition as she was when inspected. He went on to say:
“In other words, they are part of a temporal obligation which arises because, usually, there will be a period of time of weeks or even months between inspection and delivery. However, those words tell one nothing about what the sellers’ obligation are, either on inspection or delivery, as regards the quality of the vessel. Hence they do not and cannot exclude the implied term as to satisfactory quality under s.14(2) SGA.” [Emphasis added]
The words “as she was” in the present case were incapable, the judge said, of bearing the same meaning as the free-standing words “as is, where is” in a sale contract, assuming – for the purposes of argument – that those words do exclude the statutory implied terms. The judge continued:
“Even if the [sellers] were right that a possible meaning of the words “as she was” was to exclude the implied terms, it remains the case that the [sellers] cannot establish that that was the only meaning the words were intended to have, since plainly the context indicates the temporal purpose of the words, to make it clear that the vessel is to be delivered in the same condition as when inspected. Given the strict approach to construction of terms alleged to exclude the implied terms consistently adopted by the courts. .. the fact that even on the sellers’ best case the words must have more than one meaning is fatal to the sellers’ case that these words exclude the statutory implied terms. Furthermore, given that an obvious sensible meaning of the words is as part of the temporal obligation to which I have referred, section 55(2) defeats the [sellers’] argument, since it cannot be said that the first sentence of clause 11 is inconsistent with the implied term in secion 14(2).” [Emphasis added]
On the second issue, - whether the words “as is, where is” are sufficient to exclude the statutory implied terms of satisfactory quality - Flaux J held obiter that the words do not amount to an express provision inconsistent with the statutory implied terms so as to negative them pursuant to s.55(2) SGA. Flaux J found that the lack of evidence before the Court as to the genesis of the phrase “as is”, and the lack of consistent authority – both in case law and in the textbooks – as to its meaning, meant that the expression “as is” was not a term of art. Further, to accept this short phrase as encompassing a meaning that could negative the statutory implied terms ran counter to the strict rule found in a long line of case law that clear language must be used in the contract to exclude statutory implied terms.
Footnotes
1 Clause 11 continued:
2.Photo Production Ltd v Securicor Transport Ltd [1980] AC 827
