Latent Defect CASES
In English law, a latent defect refers to a hidden fault or flaw in a product, property, or construction that is not discoverable upon reasonable inspection at the time of purchase or acceptance.
Definition and Principles
A latent defect is an existing but concealed issue which later emerges, affecting usability, safety, or value. Liability often depends on whether the seller or builder knew, or should have known, about the defect at the time of contract formation.
Common Examples
- Structural weaknesses in a newly built property.
- Hidden defects in machinery or vehicles.
- Undetected damp or subsidence in buildings.
Legal Implications
- Sellers or builders may be liable if the defect was concealed or undisclosed.
- May trigger claims for damages, rescission, or rectification.
Practical Importance
Understanding latent defects assists buyers, sellers, and builders in managing risk, ensuring thorough inspections, and establishing clear contractual protections against undisclosed issues.
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Dr Grant suffered severe dermatitis from a chemical irritant in woollen underpants, a latent manufacturing defect. He successfully sued the retailer in contract and the manufacturer in negligence, significantly widening the 'neighbour principle' from Donoghue v Stevenson to include general consumer products. Facts The appellant, Dr Grant, purchased two pairs of woollen underpants manufactured by the first respondent, Australian Knitting Mills Ltd (AKM), from a retailer, the second respondent, John Martin & Co Ltd. After wearing the underpants for a week without washing them first, he developed an acute and severe case of dermatitis. Medical evidence established that the dermatitis
Contaminated groundnuts were sold through a chain of contracts for use in animal feed, ultimately killing a farmer's pheasants. The House of Lords held that goods with a latent toxic defect are not of 'merchantable quality', establishing liability up the supply chain. Facts The case concerned a series of ‘chain’ contracts originating from Brazilian groundnut meal which was unknowingly contaminated with a fungus producing a poison, Aflatoxin. The meal was sold by importers (Gagniere & Co. and others) to merchants (Henry Kendall & Sons), who sold it to compound feed manufacturers (Grimsdale & Sons). Grimsdale used the meal to create
