3PB reviews abatement, the Sale of Goods Act 1979 and the Readie Construction case

22nd November 2021

3PB’s pupil barrister Jakob Reckhenrich (pictured here) has analysed the case of Readie Construction Limited v Geo Quarries Limited [2021] EWHC 3030 (QB).

By way of background, Section 49 of the Sale of Goods Act 1979 prescribes the circumstances in which the seller is entitled to sue for the price. The seller has to demonstrate either that property in the goods has passed (which will be problematic if the contract contains a retention of title clause), or that the contract terms require payment “irrespective of delivery”. In Readie Construction Limited v Geo Quarries Limited, the High Court considered the meaning of that important requirement. Against a conflict of approach between the appellate courts of Australia and New Zealand, and the High Court of Singapore, the English High Court has followed the latter. A contract will make payment due “irrespective of delivery” even if the entitlement to present an invoice is contingent on the delivery of the goods; the requirement means simply that the time for performance of the respective obligations of delivery and payment, must be divorced from each other. The court also considered the long-standing problem of whether a no-set-off clause precludes abatement.

This article is a must-read for commercial and construction lawyers as the judgment of this case will now make it easier for a party to bring itself within section 49(2) of the Act, showing that the time for payment is other than the day of delivery may well be sufficient to show that “the price is payable on a day certain irrespective of delivery”. Secondly, the courts may be more willing than they once were, to construe a no set-off clause as extending to abatement (particularly where the word “reduction” is used).

Jakob Reckhenrich is a third six pupil, building a practice focused on commercial, real estate and property disputes. He joined 3PB after completing his pupillage at Monckton Chambers and working as a judicial assistant in the Commercial Court, where he assisted, among others, Mrs Justice Cockerill and Mr Justice Butcher.

To find out more about Jakob, or to discuss this article further, please contact his clerk David Fielder on [email protected] or call him on 020 7583 8055.