Business to Business Contracting for farming plant, machinery and vehicles

September 9, 2015

Many local farmers have heard or read about the Consumer Rights Act 2015, the majority of which will become operative in Northern Ireland on 1st October 2015. Unfortunately, that Act will not protect farmers purchasing machinery, vehicles or equipment for use in their farming business.

The Consumer Rights Act 2015 defines a consumer as an individual acting for purposes which are wholly or mainly outside that individual’s trade, business, craft or profession. The simplification of the rights and remedies available to consumers by the Consumer Rights Act 2015 will therefore not assist local farmers.

It is not uncommon for the farming community to invest heavily in vehicles, plant and machinery. This may at times be assisted by loan facilities such as hire purchase agreements or by other commercial facilities. I have recently been involved in acting in Court proceedings in quite a substantial number of claims involving allegedly defective vehicles, plant and machinery. The implications of which can have a catastrophic effect on the farmer’s productivity and the ability to turn a profit in any financial year. The most disturbing trend that has however been unearthed by acting in such proceedings is the fact that farmers continue to believe that they are afforded all of the protection of consumer legislation when purchasing vehicles, plant and machinery. As a result, there is an ignorance of the fact that they will be treated as a business and as such may not enjoy the full statutory protections available to an individual. All too often, the written terms and conditions of the contract between the farmer and supplier of the goods or the finance house are ignored, to the detriment of the farmer.

The enactment of the Consumer Rights Act 2015 helps me to demonstrate the above more clearly. As previously stated, a farmer will be treated as a business by the 2015 Act. A farmer’s statutory rights therefore remain those which are provided for by Sale of Goods Act, as amended to date. As such, whilst there is a degree of protection concerning the fitness for purpose and satisfactory quality of goods, very often standard terms and conditions entered into with a supplier or finance house can mean that those rights are heavily limited and that maximum caps may be placed on the farmer’s ability to claim damages.

In one matter that I recently completed, the farmer’s ability to claim for loss and profit was limited by standard terms and conditions entered into with both the supplier and the finance house. As such the claim was limited to damages to repair the machinery. No account was taken of the destruction of the farmer’s profitability for the particular financial years involved. In another matter, I witnessed a farmer having to invoke international arbitration at a cost greater than the value of the original machinery in an attempt to enforce his rights under the contracts that he had entered into.

It is a fact of working life that vehicles, plant and machinery may fail. If you want to be left with adequate protection do not presume that you have the same under the necessary legislation. Seek advice on the terms and conditions that you are about to enter into and renegotiate these if necessary. It is much cheaper to do this at the outset than to be left with the financial consequences if you are not adequately protected.

Cleaver Fulton Rankin have a team of specialist commercial lawyers who will happily advise on these terms and conditions and ensure that you are best protected when entering into agreements with suppliers and funding houses. Equally, should you experience difficulties with vehicles, plant and machinery please contact our Product Liability Unit by speaking to Aaron Moore on 02890271344. Aaron has a specialist practice in prosecuting and defending claims relating to the fitness for purpose or otherwise of vehicles, plant and machinery and has previously acted for leading manufacturers as well as individuals.

*Please note that the content of this article is for information purposes only and further advice should be sought from a professional advisor.