Maple Flock Company Ltd v Universal Furniture Products (Wembley) Ltd

 

[1934] 1 K.B. 148

 

Court of Appeal

 

Lord Hewart CJ

 

'The appellant company are manufacturers of rag flock, and the respondents are manufacturers of furniture and bedding for which they use such flock. The action was brought by the appellants for breach by the respondents of a contract in writing, dated March 14, 1932, for the sale by the appellants to the respondents of 100 tons of black lindsey flock at 15l. 2s. 6d. per ton, to be delivered in three loads per week as required. It was further stipulated that there should be a written guarantee that all flock supplied under the contract should conform to the Government standard. The load was 1½ tons or 60 bags…

 

… deliveries were at once commenced and continued of 1½ tons each. The sixteenth of these deliveries was made on April 28, 1932, and, according to the respondent's evidence, was duly accepted and the stuff put into use; a further delivery was made on April 29, 1932, and another on May 2, 1932. On that latter date the respondents notified the appellants that a sample drawn from the delivery of April 28, 1932, had been analysed and showed a contamination of 250 parts of chlorine, instead of the maximum allowed by law of 30 parts. The respondents thereupon claimed to rescind the contract; the appellants protested, and some negotiations took place, during which two more deliveries were tendered and taken, each of 1½ tons. Eventually the respondents adhered to their claim that they were entitled to rescind, and the writ was issued by the appellants claiming damages on the ground that the refusal of the respondents to take further deliveries was wrongful.

 

The decision of this case depends on the true construction and application of s. 31, sub-s. 2, of the Sale of Goods Act, 1893… A contract for the sale of goods by instalments is a single contract, not a complex of as many contracts as there are instalments under it. The law might have been determined in the sense that any breach of condition in respect of any one or more instalments would entitle the party aggrieved to claim that the contract has been repudiated as a whole; or on the other hand the law as established might have been that any breach, however serious, in respect of one or more instalments should not have consequences extending beyond the particular instalment or instalments or affecting the contract as a whole. The sub-section, however, which deals equally with breaches either by the buyer or the seller, requires the Court to decide on the merits of the particular case what effect, if any, the breach or breaches should have on the contract as a whole.

 

… With the help of these authorities we deduce that the main tests to be considered in applying the sub-section to the present case are, first, the ratio quantitatively which the breach bears to the contract as a whole, and secondly the degree of probability or improbability that such a breach will be repeated. On the first point, the delivery complained of amounts to no more than 1½ tons out of a contract for 100 tons. On the second point, our conclusion is that the chance of the breach being repeated is practically negligible. We assume that the sample found defective fairly represents the bulk; but bearing in mind the judge's finding that the breach was extraordinary and that the appellant's business was carefully conducted, bearing in mind also that the appellants were warned, and bearing in mind that the delivery complained of was an isolated instance out of 20 satisfactory deliveries actually made both before and after the instalment objected to, we hold that it cannot reasonably be inferred that similar breaches would occur in regard to subsequent deliveries. Indeed, we do not understand that the learned Judge came to any different conclusion… There may indeed be such cases… where the consequences of a single breach of contract may be so serious as to involve a frustration of the contract and justify rescission, or furthermore, the contract might contain an express condition that a breach would justify rescission, in which case effect would be given to such a condition by the Court. But none of these circumstances can be predicated of this case. We think the deciding factor here is the extreme improbability of the breach being repeated, and on that ground, and on the isolated and limited character of the breach complained of, there was, in our judgment, no sufficient justification to entitle the respondents to refuse further deliveries as they did.'