Arcos Ltd v E A Ronaasen & Son [1933]

Court: House of Lords

Facts: Buyers (C) contracted with sellers (D) for staves of timber wood specified to be 0.5 inches thick. A significant number of the delivered staves exceeded this thickness. The buyers rejected the staves, claiming they did not meet the contract specifications.

Issue: Whether the deviation from the specified thickness constituted a breach of a condition, thereby entitling the buyers to terminate the contract.

Held: The House of Lords held that the sellers' deviation from the specified thickness was a breach of a condition, which allowed the buyers to terminate the contract. Despite the staves being fit for making cement barrels, the court adhered to a strict interpretation of the contract terms.

Key Judicial Statements:

• Lord Buckmaster: Emphasized the rigid approach to contract specifications, stating that any deviation, no matter how small, constituted a breach of condition. He stressed that there was "no room in this contract for any elasticity," and exceptions only applied if the difference was so minor that it would not be considered by the law.

• Lord Warrington: Criticized the arbitrator's decision to introduce a qualification of commercial equivalence, reinforcing the strict adherence to the contractual description.

💡 Leveluplaw: This case demonstrates the strict application of contractual terms, where even minor deviations from specifications were treated as a breach of condition. Modern legislation, such as the Sale of Goods Act 1979, introduces some flexibility, allowing for breaches to be classified as warranties in cases where deviations are minor, reflecting a more nuanced approach to contract performance.