Excluding A Contract Condition Is A Precise Art

• The recent case of KG Bominflot Bunkergesellschaft fur Mineralole mbH & Co Kg v Petroplus Marketing AG [2009] EWHC 1088 (Comm) has addressed the exclusion of implied conditions in a commercial contract. The case highlights that for an implied term to be excluded it must be properly defined.
• The use of ICC INCOTERMS needs to be clearly defined.
• Certain implied terms are conditions and others are warranties. It is important to exclude both conditions and warranties in order to avoid liability.

In this case a buyer purchased oil under a contract where delivery was under the ICC INCOTERMS FOB such that the quality of the oil should be both satisfactory and fit for purpose not only on delivery to the ship but also subsequent to delivery.