Business Clinic: What can I do about faulty milking robots?

Whether you have a legal, tax, insurance, management or land issue, Farmers Weekly’s Business Clinic experts can help. Here, Robert James associate at Thrings offers advice on how to tackle a problem with expensive equipment not working as it should.

Q I run a 121ha (300-acre) and 180-cow dairy farm. With a view to expanding and increasing profits, I bought four milking robots in 2013 to replace my herringbone parlour. 

I’ve had nothing but problems with them. They constantly breakdown, are wholly unreliable and profits have fallen. I cannot contemplate expanding the herd until the problems are resolved.

Plus, I’ve had to maintain my herringbone parlour as backup when the plan was to sell this and recoup some money. The whole episode has caused great distress to both myself and my family. What can I do about it legally?

A The good news is it looks like you have a claim for breach of contract. If you bought the robots from the manufacturer or an agent, I would expect they would have contracted on their set of standard terms and conditions which would set out some express terms. It is these that would need to be examined in the first place. 

Regardless of these terms, the law implies certain terms into contracts such as these, primarily that the robots should be (a) of satisfactory quality and (b) fit for purpose.

This would be governed by the Sale of Goods Act 1979, as you purchased the robots back in 2013. It has since been replaced by the Consumer Rights Act 2015 which applies to all contracts after 1 October 2015.

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In any standard terms and conditions, I would expect to see certain exclusion or limitation of liability clauses. This is an attempt by the seller to restrict the category of claims that may be brought against it, or try to set up a financial cap on its liability for any claim.  

If the standard terms and conditions are simply imposed on you, and these exclusions or limitation clauses were not adequately explained and highlighted to you, then there may be an argument they are not valid.

Under the Unfair Contract Terms Act 1977, it would up to the seller to persuade the court the clauses are reasonable in the circumstances. On the facts of your case, this is not an easy task.

If it can be shown the breakdowns are caused by inherent defects with the robots and not by husbandry or other external factors then, on the face of it, you would have good prospects to show they are not fit for purpose and are not of satisfactory quality.

Detailed record

To support any potential claim, it is important to keep a detailed record of the frequency of the breakdowns and any known cause. A positive expert report from a suitably qualified engineer would strengthen your position.

If you can successfully show the robots are defective, relief will come by way of damages. From what you have described, there are three broad heads of loss.

First, you need to be put in a situation where you have working robots. Usually, this involves the cost of repair, but if all repairing efforts to date have been to no avail you could certainly argue you should be awarded damages to enable you to go out any buy new robots.

Second is the question of any loss of profit from the drop in production. You will need to show these losses were foreseeable, for example, that they could reasonably be a contemplated result of having defective robots. Your accountant may be able to help you demonstrate and provide evidence of these losses.

Last, you mention distress. The law only allows damages for distress in contract claims in very limited circumstances, where the purpose of the contract was to provide peace of mind or relaxation. The current claim is unlikely to fall within that category.

A note of caution. Any court claim for a breach of contract should be started and issued with the court within six years from the breach, which could run from the date of purchase back in 2013 and may therefore mean that you do not have much time left to pursue the claim.

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