Arbitration · Sale and purchase
Latent defects: $500K released for the seller
The buyer claimed $500K for defects said to exist at the time of sale. The defence established that the asset was delivered in the agreed condition and that the defects appeared later, through use and maintenance.
The dispute
Years after the sale, the buyer alleged latent defects and claimed repair costs plus loss of profit from the unavailability of the asset.
What was at stake
The difference between a latent defect and wear through use. If the tribunal accepted the buyer case, any sale would remain exposed to claims years later.
The strategy
Three fronts were developed: the condition of the asset at delivery, documented in contemporaneous records and reports; subsequent maintenance, with operating logs; and the moment the failures appeared, through expert evidence.
The outcome
The seller was released from the $500K claimed.
In a sale, the delivery record and the maintenance history are worth more than any argument about what was said while negotiating.