Arcos Ltd v EA Ronaasen & Son [1933] AC 470
Arcos Ltd v E.A. Ronaasen & Son [1933] AC 470 is a landmark case that deals with the implications of non-compliance with contractual specifications in the sale of goods. The case is particularly important for law students who are studying contract law, as it sheds light on the legal consequences that may arise when goods supplied do not precisely meet the contractually agreed standards, even if the variation is minor. The ruling in this case has been widely cited and has had significant implications for the interpretation and enforcement of contracts in various industries.
Facts
Arcos agreed to supply timber staves described in the contracts as half an inch thick. When the timber arrived, the buyers rejected it because much of it exceeded the specified thickness. The staves could still be used commercially, and the arbitrator considered them commercially within the description. The sellers argued that this was sufficient compliance with the contracts despite the dimensional differences. The buyers maintained that the stated measurements defined the goods they had agreed to purchase. The litigation concerned their entitlement to reject that delivery.
Legal Issue
Could the buyers reject timber that remained commercially usable but did not correspond with the thickness specified in the contracts of sale?
Held
The House of Lords upheld the buyers' right to reject the timber. Commercial usability did not replace the requirement that goods correspond with their contractual description. The stipulated thickness was part of that description, and the findings did not establish compliance with it.
Lord Atkin rejected a general rule that substantial commercial compliance would satisfy expressly specified measurements. Lord Warrington nevertheless recognised that genuinely negligible discrepancies could permit a finding that goods answered their description. The court therefore distinguished a finding of actual conformity from an assertion that non-conforming goods remained merchantable. On the findings made, the sellers had not supplied the goods promised and their appeal failed.
⭐ Legal Principle
Goods sold by description must correspond with the contractual description. Commercial usefulness does not itself cure non-compliance with specified measurements. Arcos should be distinguished from genuinely negligible discrepancies and read alongside later statutory rules limiting rejection for slight breaches in some sales.
Significance
Arcos is a leading illustration of descriptive terms and the historical strictness of conditions in sale contracts. The case helps distinguish conformity with the bargain from general quality or usefulness. For a modern problem, section 15A of the Sale of Goods Act 1979 may restrict rejection for a slight breach in a non-consumer sale, subject to its conditions. Consumer transactions require the applicable consumer legislation to be considered separately.
Common exam questions about this case
Why was commercial usability not enough in Arcos?
The contract described the timber by reference to a particular thickness. A delivery could remain useful to a trader while failing to match that description. The sellers therefore needed to establish contractual conformity, not merely that the buyers could still use or resell the goods commercially.
Did the court say every microscopic dimensional difference permits rejection?
No. The speeches recognised that a genuinely negligible discrepancy might still support a finding of conformity. The problem was that the findings in Arcos did not establish such compliance. Students should distinguish that qualification from a broad rule allowing any non-conforming delivery that remains commercially serviceable.
What further question arises when applying Arcos today?
The applicable statutory regime must be identified. In relevant non-consumer sales, section 15A of the Sale of Goods Act 1979 can restrict rejection where a breach is so slight that rejection would be unreasonable. That later qualification should not be omitted merely because the historical case permitted rejection.