Safeguarding your position when acquiring farm machinery

11th April 2023

What steps can farmers take when acquiring expensive machinery outright or under a finance agreement where liability for defects and consequential losses is limited or excluded?

Invariably, when buying from a dealer or entering a finance agreement, you will be doing so on one sided terms and conditions of business. Typically, a dealer will seek to limit their liability by capping the amount payable in compensation or restricting the types of loss recoverable  – say loss of profits, sales, or business –  or the remedies available. They might also impose a short time limit for making a claim for a defect. A finance company will go further and exclude liability altogether on the basis they did not manufacture the machinery.

Whereas the principle of freedom of contract is balanced against public policy concerns that a dealer or finance company should not be free to absolve themselves from liability, in a business to business dealing, the customer will experience an uphill struggle in proving that a limitation or exclusion is unreasonable. This is more so the case when the machine in question cannot be used and a crop has been lost.

So, what can a farmer do to safeguard his position before signing the dotted line? Here are some practical steps:

  • See what you are letting yourself in for
  • Obtain the terms and conditions of business and check for any limitations or exclusions

It is highly unlikely that a dealer or finance company would agree to a relaxation of a limitation or exclusion, so:

  • Ask the dealer whether there are any known manufacturing defects
  • Ask to see the manufacturer’s warranty to see what is covered
  • Search the internet to see if there are any reported issues
  • Ask to speak to an existing customer to learn about their experience.

If these measures are taken, whilst they cannot guarantee a positive outcome, at least what is an expensive commitment will not been entered blindly.

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