Gillespie Bros & Co v Cheney Eggar & Co
High Court
Citations: [1896] 2 QB 59.
Facts
The claimant bought coals from the defendant. The written contract did not state what the claimant needed them for. However, before contracting, the claimant told the defendant that they needed the coals for a particular type of ship. The coals turned out to be unsuited for this purposes. The claimant sued for breach of contract.
s.14 of the Sale of Goods Act 1893 (now Sale of Goods Act 1979, s.14(3)) implied a term into sale of goods contracts. That term stated that where the buyer makes clear that they need the goods for particular purpose (indicating that they rely on the seller’s skill and judgement), it is implied into the contract that the goods will be fit for that purpose. The claimant alleged that this implied term was present in the contract, and the defendant had breached it.
Issue(s)
- Could the claimant admit evidence of oral discussions with the defendant to show that the s.14 implied term was present?
Decision
The High Court held in favour of the claimant. Evidence of the parties’ oral conversations were admissible to prove that s.14 was triggered.
This Case is Authority For…
Normally, the ‘parol evidence’ rule prevents parties from admitting oral or external evidence in court which contradicts or varies a written agreement. This rule does not prevent the courts from looking at all the evidence to determine whether a term should be implied into a contract.
Other
Lord Russell explained that the parol evidence rule is ‘a presumption only’. He continued:
‘it is open to either of the parties to allege that there was, in addition to what appears in the written agreement, an antecedent express stipulation not intended by the parties to be excluded, but intended to continue in force with the express written agreement.’
