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Tuesday, 10 July 2012

Acceptance certificate defeats claim

Acceptance of goods will often mean that the buyer has lost the right to reject, whether the goods concerned are a tin of beans, a truck, or a Boeing 737. In consumer contracts other factors come into play, but in the general law of contract once you have accepted something you are stuck with it.

In ACG Acquisition XX LLC v Olympic Airlines [2012] EWHC 1070 (Comm) (30 April 2012) the airline leased a new plane and signed an acceptance certificate. Later it turned out to have defects, and the airline served termination and redelivery notices. The lessor argued that the aircraft was airworthy when it was delivered, but  in any case the airline was estopped from asserting that it did not comply with the certificate of airworthiness because of the acceptance. The Commercial Court, unsurprisingly, held that this was indeed the position. The airline had a chance before delivery to inspect the aircraft and have any defects remedied, and it would be inequitable to allow them to argue later that the plane did not comply at the time of delivery.

The case does not make new law, but it does serve to show that you should not sign an acceptance certificate (or anything to the same effect, whatever it's called) unless you are absolutely sure the goods are OK. If you have a chance to inspect the goods, you must take it before you accept the goods and sign to say that you have done so.

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