Industry standards, statutory regulations and their implications for fitness for purpose

The standard of fitness for purpose may be measured against any relevant regulations or by-laws, and a failure to meet them will generally be regarded as a breach of such warranty.

Industry standards, such as Australian Standards, are not quite so determinative. A breach of an industry standard does not, in and of itself, constitute a breach of an implied fitness for purpose term. A court will look to the intended purpose of any obligations between the parties when determining the existence of an implied fitness for purpose warranty.

An example of this is Taylor Construction Group Pty Ltd v Strata Plan 92888 (t/as Owners Strata Plan 92888) [2021] NSWSC 1315. The court’s decision that the statutory duty was breached was based upon the fact that the flammable cladding was not compliant with the Building Code. It was said to set the ‘minimum standard by which fitness for purpose is to be measured’ by the Senior Member in the earlier hearing of the case.