A fitness for purpose warranty operates as a catch-all provision attempting to remove the risk that a counterparty can deliver something that is technically compliant with specifications but which fails to meet underlying needs.
For the Supplier though, this creates significant risk as it requires a proper understanding of the needs of the Purchaser, the intended uses of items being sold, and the suitability of products for those uses. This is particular the case, as in the version below, where the potential scope expands beyond the Supplier’s knowledge. As such a Supplier may seek to limit the scope to those purposes expressly disclosed to the Supplier in writing.
Example:
The Supplier must ensure the Goods and Services are fit for the purpose for which Goods of the same kind are commonly supplied, or for which those types of Services are commonly provided, and for any other purpose which the Purchaser makes known to the Supplier.
Statutory Application
Concepts of fitness for purpose are incorporated into the Australian Consumer Law concept of “acceptable quality” – see our separate page here.
Similarly, warranties that goods are fit for the particular purpose of the buyer may be incorporated into a contract if the Sale of Goods legislation applies – see our separate page here.