Supply of Goods and Services Act Does Not Cover Professional Negligence

When chocolate giant Cadbury sought to use the Supply of Goods and Services Act 1982 (SOGA) to make the firm that designed, built and installed a fire detection and control system that failed to prevent a major fire fully liable for its losses, the Court of Appeal rejected the attempt.



Cadbury had sued ADT Fire and Security plc for £100 million following the devastating fire in 2005. While holding ADT to have been negligent, the High Court judged that Cadbury was mainly responsible for the losses and reduced ADT’s share of the liability for the loss to 25 per cent.



Cadbury appealed on two grounds. The first was that the system supplied constituted ‘goods’, which made the SOGA applicable. The goods, argued Cadbury, were not ‘fit for purpose’. This would make ADT responsible for any consequential losses suffered by Cadbury.



The Court could not see how legislation designed to protect the buyers of ordinary goods could be construed to apply to something as specialised as the system supplied by ADT. It therefore rejected that argument and also a further contention that the specification of the project contained an implied warranty that it would be effective. The contract between Cadbury and ADT could not be construed to create such a burden on the supplier.



The whole issue of warranties and liability to perform duties is fraught with complexity and careful wording of any contract is critical.