Business Clinic: I’ve bought a tractor that’s faulty – where do I stand?

Whether you have a legal, tax, insurance, management or land issue, Farmers Weekly’s Business Clinic experts can help. Here, Russell Reeves explains the best way to approach a dealer who’s sold you a malfunctioning tractor.

I have a question regarding a new tractor purchased at the end of July 2016. Right from the start I experienced serious stopping problems when using the tractor on the highway because of the braking system.  When applying the brakes the back wheels lock up and skid.

I contacted the dealer and the engineer’s report concluded that the wheels weren’t braking adequately, with a promise of a solution to be found to rectify the problem.

I rejected the first tractor after numerous faults with it and was offered a different model at a cost to me of an additional £7,500, which I was not happy with.  The only other option I was offered was to have another tractor of the same (original tractor) model, like for like, which I took, but the braking problem is through the series of tractors. 

The manufacturer has come up with a temporary resolution to the braking problem by fixing weights to the tractor wheels.

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The tractor was advertised as having safe braking whatever the weight ratio, which has proven not to be the case.

The question I have is: if the manufacturer does not come up with a solution to the braking system, where I do stand?  I understand that they have stopped producing this braking system because of the fault. 

Where do I stand if the resale value of the replacement tractor is lower because of a fault that cannot be rectified?

The replacement tractor is now giving the same trouble as the original faulty tractor. It has done fewer than 200 hours and has also had to have a steering issue repair (under warranty) worth £2,000. What do you advise?

A From what you say, you believe the tractor supplied to you under a contract for sale was not of satisfactory quality, and although the dealership has replaced it the problem remains (plus an additional steering problem on the replacement tractor).

You potentially have a claim for breach of contract but the burden of proof is upon you to show three things: a valid contract; a breach of a term of that contract; and loss resulting from that breach.

You are likely to have a valid contract with the dealership. Often a dealership will try to palm you off to the manufacturer but if your contract is with the dealership then any claim is against them.

Russell ReevesRussell Reeves
Partner, Thrings

As for whether there has been a breach of a term of that contract, you must first look at what the terms are.

These will likely include written terms which may provide you with rights and remedies. I haven’t seen these and would need to consider them to be able to advise you properly. In addition, there are likely additional terms which are incorporated into the contract by law.

Standard terms

The law regulates business-to-business contracts significantly less than consumer contracts. But there are some terms which are automatically incorporated into your contract, including that the tractor must be of a “satisfactory quality” and be “fit for purpose”. From the information you have provided, it sounds like the tractor was neither of satisfactory quality nor fit for purpose.

If the matter were to end up in court you would probably need an expert engineer’s report to evidence this (I note you already have an opinion supporting what you say, which is a good start).

If we assume you can prove that the tractor was not of satisfactory quality nor fit for purpose, you may have had the right to reject the tractor. However, your problem is that rejection should occur immediately and use of the tractor will typically terminate your right to reject.

In these circumstances and because you have already accepted a replacement tractor which you have used for fewer than 200 hours, you are unlikely to be entitled to return the tractor and have your money back. You may, however, still be entitled to damages.

The burden is upon you to prove the damages you have suffered. The starting point for this calculation is that you should be awarded a sum of damages that 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 functional tractor with a certain value; instead you own a tractor with a lower value. Your claim is likely to be for the reduction in value.

If this reduction is significant, I would recommend you obtain a report from a tractor valuation expert (perhaps a used tractor dealer with a good reputation, ideally with court experience) to evidence the difference in value because a court will likely require reliable proof of the reduction. If the reduction is smaller, the court may feel more comfortable accepting lesser evidence but best practice would be to obtain an expert’s report.

Put it in writing

The first thing you or a solicitor acting for you should do is write to the dealership to allege breach of contract and set out the damages sum being sought. The threat of legal proceedings may assist in bringing about settlement by agreement.

If you can’t agree settlement, then court is your only remedy. If your damages are 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.

Parties usually bear their own costs even if successful. It is less formal than the claims process for claims of higher value and the court tends to give parties acting without lawyers more leeway in assessing their compliance with the correct procedure.

If your claim for damages is for more than £10,000, the effect of the ordinary rule for you is that if you win the dealership will pay your costs; if you lose you will pay the dealership’s costs. Either of these would be subject to assessment. There is therefore more costs risk for claims of more than £10,000.

This is a complex situation and both the law and procedure heavily depend on your specific facts. It is therefore recommended that you seek specialist independent legal advice to assess your situation.

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