Bajaj Healthcare Ltd v Fine Organics Ltd

Bajaj Healthcare Ltd v Fine Organics Ltd

BHL breached the contract by supplying AHA contaminated with extraneous matter, failing to meet the express terms requiring similar quality and impurity profile to previous supplies, and implied terms of satisfactory quality and fitness for purpose. The contamination inhibited hydrogenation, causing loss to FOL. Compliance with the specification alone was insufficient where extraneous matter fundamentally changed the quality of the product.

Parties
Claimant: Bajaj Healthcare Limited; Defendant: Fine Organics Limited
Jurisdiction
England and Wales
Judgment Date
05 September 2019
Procedural Posture
Commercial Contract Dispute / Final Judgment After Trial
Outcome
Claim partially allowed; counterclaim allowed; set-off ordered.
Legal Topics
Breach of Contract, Implied Terms, Sale by Sample, Fitness for Purpose, Satisfactory Quality, Evidence, Damages, Manufacturing Standards
Contract Law Sale of Goods Breach of Contract Implied Terms Sale by Sample Fitness for Purpose Satisfactory Quality Evidence +2 more

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Parties

Bajaj Healthcare Limited

Claimant

Fine Organics Limited

Defendant

Procedural Posture

Commercial Contract Dispute / Final Judgment After Trial

Legal Issues

  1. 1 What were the express and implied terms of the contract for the supply of AHA?
  2. 2 Did Bajaj Healthcare breach the contract by supplying contaminated AHA?
  3. 3 Was the AHA of satisfactory quality and fit for purpose under the Sale of Goods Act?

Ratio Decidendi

BHL breached the contract by supplying AHA contaminated with extraneous matter, failing to meet the express terms requiring similar quality and impurity profile to previous supplies, and implied terms of satisfactory quality and fitness for purpose. The contamination inhibited hydrogenation, causing loss to FOL. Compliance with the specification alone was insufficient where extraneous matter fundamentally changed the quality of the product.

Court Disposition

Claim partially allowed; counterclaim allowed; set-off ordered.

Orders

  • FOL liable for BHL's outstanding invoices in the sum of US$513,946.23, subject to set-off.
  • BHL liable to pay damages for breach of contract to FOL in the sum of £646,883.39, to be set off against BHL's invoices.