“20. In paragraph 3.4 of the defence submissions, the Sellers expressly denied that the Buyers had expressly or by implication made known to them any particular requirements for or intended use of the vessel beyond that which had been provided by the express terms of the shipbuilding contract. They pleaded that the parties had entered into a detailed written shipbuilding contract containing the requirements and specifications for the vessel. They argued that if the Buyers had specific requirements as to the capacity of the cranes other than those actually specified, such intention would have been clearly expressed in the contract. 21. In paragraph 14 of the reply submissions the Buyers responded as follows:- “The requirements referred to were necessarily implicit in the fact that the Contract was for the building of a large handymax bulk carrier which was expressly required to be supplied with cranes fitted for grab working up to 30t SWL and fully rated for continuous operation”. 22. In other words, as was emphasised on behalf of the Sellers at the hearing, there was no suggestion that the Buyers had made known any particular requirements over and above those identified in the contract in express communications to them, the Sellers; the alleged purpose was only made known implicitly as a result of the express terms of the shipbuilding contract.”
“the Sellers did not challenge the Buyers’ case that theSale of Goods Act 1979 applied to the shipbuilding contract”
“Section 14(3) will not, however, normally assist the purchase of a new building in a quality dispute. The subsection is designed to cover the situation in which the goods are required for a specific purpose made known to the seller before the contract is signed; it is as such likely to be inapplicable in the overwhelming majority of shipbuilding projects, in which the vessel is built for use in standardised trades which are well known to, and understood by, both the buyer and the builder.”
“25. Simon Curtis referred to the Scottish case of Britain Steamship Co. Ltd. v. Lithgows Ltd. In that case the purchasers under a new building contract sued the shipbuilders alleging that a purpose for which the vessel was required was to deliver the stipulated engine output on a continuous basis and that this did not happen because of constant breakdowns. Lord Maxwell declared:- “…I read this as meaning, and almost throughout the pursuers’ counsels’ argument I understood them as saying, that the “purpose” relied on was the purpose of having a bulk carrying vessel with an engine capable of 16,800 b.h.p. and 110 r.p.m continuously, that is to say that the horse-power and the rpm were an element in the “purpose”
“28 For the sake of completeness, we should say that we did not consider that the above conclusions were weakened in any way by the case of Preist v. Last or, given that we were dealing with a detailed shipbuilding contract, the other cases analysed in paragraph 11-055 of Benjamin’s Sale of Goods. ”
“The Sellers accepted that the vessel had to be structurally capable of carrying and withstanding the dynamic forces of the operation of the 30 tonne cranes but there was no suggestion that the structure of the vessel did not comply with those requirements. However, they argued that any more onerous and specific requirement was inconsistent with the express terms that had been agreed.”
“. . . What about the more general argument that the express terms were inconsistent with the implied term? We concluded that, as argued by the Sellers, they were inconsistent with the express terms and they therefore fell foul ofs.55 of the Sale of Goods Act 1979 .”
“38. Although the Sellers failed on their third argument, we accepted that, on the bases of their first two arguments, the shipbuilding contract did not contain the implied term alleged by the Buyers in paragraph 4.3 of the draft re-amended claim submissions. 39. In his written skeleton argument addressing the second question, Mr Snook on behalf of the Sellers wrote:- “The parties entered into an exhaustively detailed and comprehensive agreement, running to some 252 pages with many hundreds of clauses. The suggestion that the parties omitted some fundamental point of substance is misconceived. Instead, the facts of this case demonstrate that the default position applies, namely that no further terms should be implied into the Contract.” 40. Although that argument was forensic and the preliminary issues in the shipbuilding contract had to be considered by reference to the principles established in English law, nevertheless it was a comment that supported our conclusion. Shipbuilding contracts are very lengthy and detailed documents. We are confident that both objectively and subjectively the parties would have been surprised if, at the conclusion of their negotiations, they were told that their contract was not comprehensive and very specific additional terms (albeit ones whose practical meaning was not clear) had to be implied into the contract.” “The parties entered into an exhaustively detailed and comprehensive agreement, running to some 252 pages with many hundreds of clauses. The suggestion that the parties omitted some fundamental point of substance is misconceived. Instead, the facts of this case demonstrate that the default position applies, namely that no further terms should be implied into the Contract.”