Whether you have a legal, tax, insurance, management or land issue, Farmers Weekly’s Business Clinic experts can help.
Here, Russell Reeves offers advice over a disagreement about the purchase of a baler.
Q In 2015 I purchased a new baler (cost £67,000), which I was told was built in 2014 and was a 2014 model, and I fully understood that this machine was one year old but new and unused.
When the machine was delivered to my farm I noticed it was built in 2013.
I contacted the company within two hours of it being delivered and said that they had quoted for a 2014 build machine not a 2013 build one, all of this is on their written quote. They said they would sort it out.
I had to use the machine to complete harvest (which they were aware of). I phoned them after harvest to ask what they proposed to do. It was some time later that they said they would come and change the manufacture’s plate to a 2014 date.
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I told them I was not happy about what they proposed and said they should collect the machine and repay my money, which they declined to do.
They phoned in January 2016 and said they wished to come and change the manufacture’s plate to one which showed a 2014 build date. I agreed to this because I believe this proves that they did lead me to believe that I was buying a 2014 build machine.
They claim that the machine was built in the last five months of 2013 so they are entitled to class it as a 2014 build machine.
When looking at second-hand machine prices there is around £8,000 to £10,000 difference in price between a 2013 machine and a 2014 machine.
I have enclosed copies of balers for sale in a recent ad showing price difference in 2013-14 build machines. I feel they failed to supply what they had quoted and when I sell this machine it will be at a loss.
A The question suggests you believe that goods supplied to you under a contract for sale were different from those which you agreed to buy.
You say that you accepted delivery of those goods out of necessity but not before informing the seller that the goods were not as described in the contract.
Where goods are found to be faulty or not as described upon delivery, the buyer usually has the right to reject those goods.
However, rejection should occur immediately. Use of the goods will typically terminate the buyer’s right to reject.
My view is that you are probably no longer entitled to return the baler, nor to receive a refund. You may however be entitled to damages.
You may be familiar with the idea of misrepresentation. Misrepresentation concerns representations made before the contract is entered into, rather than actual terms of the contract.
ou say that in its written quote to you, the supplier offered to supply a 2014 machine. The contract clearly then includes a term to this effect. All this said, misrepresentation does not appear to apply here.
Without seeing the contract, it would be improper to speculate on what its terms may be. However, it is safe to say that protections given by law to private consumers do not apply.
Because you entered this contract in the course of business you are classed as a business customer rather than a consumer. The level of protection a consumer automatically enjoys is far higher than that which a business does.
Failure by one party to abide by the terms of the contract is known as a breach. A serious breach by one party allows the innocent party to end the agreement and to claim damages, essentially meaning money. A minor breach entitles the innocent party to damages alone. What you describe appears to be a minor breach.
To claim damages one must show a valid contract, breach of a term of that contract, and loss resulting from that breach. It seems that a valid contract could easily be proven but the second and third requirements present more of a challenge.
Is your contention that the seller was required to supply a machine fitted with a plate showing a 2014 build number? Or is it that the seller was required to supply a machine that was actually built between 1 January 2014 and 31 December 2014? This is not pointless pedantry.
If it is the former, the seller may well be entitled to rectify their breach by fitting a new plate. You would then not be entitled to any real damages.
If your contention is actually the latter, you may be entitled to damages. The seller could counter with the argument that they were, in fact, required to supply you with a machine that was built between 1 July 2013 and 30 June 2014. If the disagreement cannot be settled, a court could decide who is correct.
Assuming you prove such a breach, the court would then need to establish what loss you have suffered and put a monetary value on it.
The starting point for this calculation is that the court should award a sum of damages which puts you in the position you would have been in had the breach not occurred.
Had the breach not occurred you would now own a baler of a certain value. In fact, you own a baler of a lower value. You say the difference is £8,000-£10,000. Proving this may be an issue – the court may not accept copies of advertisements as proper evidence of the value of the machine so expert evidence may be required.
To recover less than £10,000, you can use the small claims process. This is a simplified court procedure where only very small sums can be recovered by either side in respect of legal costs.
This removes the costs risk ordinarily associated with litigation. It is less formal than the claims process for claims of higher values, and courts tends to give parties acting without lawyers more leeway in assessing their compliance with the correct procedure.
In reality, because legal costs cannot be recovered even by the winning party, a commercial entity will always lose money in defending such a claim. For a private individual acting on their own behalf it will cost them only their time plus certain court fees.
This encourages commercial parties to settle claims quickly, even those they believe they could successfully defend.
This is a complex situation, and it is recommended that you seek specialist independent legal advice to assess your situation.
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